Shanxi Securities Company Limited has released a research report expressing an optimistic outlook for the media industry towards 2026. The emergence of high-quality AI applications, both domestically and internationally, is anticipated to continuously enhance the sector's growth potential and valuation. Concurrently, the gaming and film industries are poised to benefit from the initiation of new game release cycles, improvements in the supply of quality content, and industry-wide innovation driven by Intellectual Property and AI technologies. The report highlights several key companies for recommendation: Kunlun Tech (300418.SZ), which is focusing on large language models and fully committing to AI to open new growth trajectories; Shanghai Film Co., Ltd. (601595.SH), which is steadily advancing its IP business layout; and Dianhun Network (603258.SH), which is embarking on a new cycle of game releases. The main viewpoints from Shanxi Securities are outlined below.
Media sector performance is accelerating upwards, with AI and gaming acting as primary drivers for index gains. Throughout 2025, the media index accumulated an increase of 27.17%, ranking 9th among the 31 primary Shenwan industry sectors. Within media sub-sectors, gaming and television broadcasting led the gains with increases of 60.50% and 20.80%, respectively. For the first three quarters of 2025, the media industry achieved total revenue of 387.278 billion yuan, a year-on-year increase of 5.75%. Net profit attributable to shareholders reached 32.109 billion yuan, surging 37.88% year-on-year. Among sub-sectors, film and television and gaming exhibited particularly strong profit performance, with growth rates of +108.5% and +88.6%, respectively. Looking across the entire year, AI remained the key catalyst for the media sector's rise in 2025.
With continuous iteration and upgrades of large language models, AI applications are expected to accelerate their implementation. Significant advancements in the multimodal capabilities of generative artificial intelligence now allow for direct processing of text, images, audio, and video data by AI models, thereby substantially expanding the technology's application scenarios. According to data forecasts from Grandview Research, the global AI market is projected to exceed $1.8 trillion by 2030, with a Compound Annual Growth Rate of 37.3%. Generative Engine Optimization represents a forward-looking digital marketing strategy aimed at optimizing brand content to improve its readability, credibility, and usability within AI search platforms. Projections from the Miaozhen Marketing Science Institute suggest the global GEO market size could surpass $100 billion by 2030, with the Chinese market reaching 24 billion yuan.
The film industry pursued steady progress in 2025, with attention turning to the 2026 Spring Festival holiday period and the application of AI in filmmaking. Annual box office performance in 2025 was stable with slight growth, primarily driven by the emergence of major blockbuster films during several key holiday periods, whose box office performances exceeded expectations and collectively contributed to lifting the annual total. Looking ahead to 2026, the film market is expected to benefit from an increase in content supply and structural improvements within the industry. "Anime-series," an emerging content format, is seeing significant production efficiency gains and clear growth pathways aided by AI, alongside platform incentive policies fostering industry development. The domestic anime-series market is anticipated to enter a phase of rapid growth starting from 2026.
The domestic gaming market continued its growth trajectory in 2025, with the start of a new product cycle driving performance. China's game market revenue reached 350.789 billion yuan for the year, a 7.68% year-on-year increase. Mobile game revenue grew by 7.92%, while client game revenue saw a more substantial increase of 14.97%. Revenue from overseas markets reached $20.455 billion, growing 10.23% year-on-year. From a medium to long-term perspective, AI empowerment is expected to bring innovation in gameplay and enhance production efficiency within the gaming industry. The gaming market in 2026 is likely to benefit from the steady commencement of new game product cycles, coupled with the continuously improving competitiveness of games launched overseas, which should contribute to steady revenue growth for the sector.
The report concludes with risk warnings, including policy risks, risks associated with macroeconomic downturn, potential underperformance of product launches, and intensifying market competition.