Hualong Securities: AI empowers media content production to focus on domestic big models and IP going overseas

The Zhitong Finance App learned that Hualong Securities released a research report saying that the growth momentum of the media sector continues to strengthen under multiple drivers such as deepening AI applications, speeding up commercialization of large domestic models, and upgrading IP overseas. On the AI application side, AI has penetrated all aspects of film and television production, game development and advertising marketing to promote content productivity improvement and creative expansion; on the domestic large model side, the sharp drop in API prices has led to rapid growth in enterprise-level calls, intensive iteration by mainstream manufacturers, and large-scale model applications are shifting from the experience stage to actual use; on the IP offshore side, emotional consumption drives Chinese IP to upgrade from content distribution to global operation, and trendy games and game IP use offline stores and global events to break the cross-cultural circle. Maintain the media industry's “Recommended” rating.

The main views of Hualong Securities are as follows:

Market review

From January 5 to July 29, 2026, the media (Shenwan) sector showed a fluctuating downward pattern, falling 23.78%, outperforming the Shanghai and Shenzhen 300 Index by 21.29pct. Early January to mid-February benefited from Spring Festival content expectations, with the biggest increase in the range of 19.72%; market sentiment rapidly cooled down from after the Spring Festival to late March, with the biggest decline of 19.52%, with the gaming sub-sector leading the decline; the rebound from April to June was weak, maintaining low volatility. In terms of valuation, as of July 29, the PE of the media sector was 23.40 times, lower than the historical center but higher than the cycle low. The sub-sector was significantly divided, with the gaming sector 18.00 times, the advertising and marketing sector 41.49 times, the film and television cinema sector 105.27 times, and the publishing sector 15.66 times.

AI applications

AI technology is penetrating into all aspects of film, television, games, advertising and marketing. In film and television, AI is gradually being applied in script creation, conceptual design, visual effects, digital actors, etc. Platforms such as SkyReels promote the low-cost and efficient production of AI skits, and the short drama industry has reached 718 million monthly activity; in terms of games, AI native development, intelligent NPCs, and programmatic content generation have become new trends. Tencent's mixed elements drive long-term character memory and emotional interaction, and AI teammate gameplay has accumulated over 110 million users.

Large domestic model

The application shifts from the experience stage to the actual use stage, and users and capital are concentrated on the head. Policies continue to be improved; API prices have dropped sharply, driving the average daily call volume of 2025H2 enterprise-level to 37.0 trillion tokens; the market size is expected to increase from 4306 billion yuan to 1253.4 billion yuan in 2026, an increase of 32.2% year-on-year in 2026; since 2026, mainstream vendors have been intensively releasing new versions of the MoE architecture, and model capabilities have continued to improve.

IP out to sea

Emotional consumption drives China's IP overseas to upgrade from content distribution to a global operating system of “content dissemination — product monetization — offline experience — community operation”. On the demand side, Gen Z consumption is shifting to experience and identity expression, and IP carries emotional value to increase willingness to pay; on the supply side, leading IP extends to trendy games, games, derivatives and offline stores, and the monetization path moves from copyright to product sales and member repurchases; on the communication side, short video platforms and AIGC work together to reduce global expansion costs. Cases such as Bubble Mart's 630 stores around the world verify IP's global operation capabilities.

Risk warning: New technology development falls short of expectations; industry competition intensifies; IP content innovation and market acceptance fall short of expectations; risk of not being able to renew copyright licenses when they expire; stricter policies and regulatory environments; macroeconomic fluctuations.