The gaming sector rebounded sharply, leading the market higher. Institutions recommend focusing on undervalued, high-growth gaming stocks that can be approached from the left side.

Why did the stability of AI licensing approval trigger a rebound in the gaming sector?

On April 1st, the previously weak gaming sector (Shenwan Secondary) rebounded sharply, leading the market, with an increase of over 4%, and most stocks rising. Among them, Shunwang Technology rose nearly 10%, with Perfect World, Giant Network, Century Huatong, Kaiying Network, Glacier Network, and others also gaining.

Previously, the National Press and Publication Administration announced the approval information for domestic online games in March 2026, with a total of 130 games approved.

Wanlian Securities pointed out that the issuance of game licenses in March slightly declined, remaining flat compared to the same period last year, covering multiple types of products and well-known manufacturers. Overall, 133 game licenses were approved in March, down 13% from February (152 licenses), and roughly flat compared to March last year (134 licenses). Among them, 130 domestic game licenses were approved in March 2026, including Kaiying Network’s “Legendary Heroes,” Blue Fly Interactive’s “Goose Farm,” Tencent’s “Little People’s World,” Xinghui Games’ “Joy of Peace: Nancheng Tycoon,” China Youth Games’ “My Hero: Ender City,” 37 Interactive’s “Little Helmet Adventure,” and Youka Network’s “Zhenhun Street: Return of the King”; three imported game licenses were approved, including Kuanyu Network’s “Duel Knights,” Qingyu You’s “Post-Disaster Company,” and Chenqu Technology’s “God Cry: Dispute.”

Wanlian Securities stated that the issuance of game licenses in March 2026 declined slightly but remained stable compared to the same period last year, covering various themes. Overall, leading companies’ product reserves continue to be approved, maintaining supply-side release momentum, and industry prosperity remains. It is recommended to focus on leading companies with rich product reserves, strong R&D capabilities, and diversified themes.

CITIC Securities is optimistic about the continued easing of game license issuance and expects that the new product cycle driven by AI and IP commercialization trends will boost the sector’s performance. It suggests screening targets from three dimensions: 1) High-quality and high-dividend stocks: focus on solid fundamentals and dividend-paying ability of excellent gaming companies; 2) New technologies and new consumption trends: AI empowering game development and operation efficiency, exploring new interactive modes in 2C applications, and focusing on companies with technological accumulation and product innovation capabilities; 3) High-quality content reserves under a relaxed regulatory environment: stable game license supply helps promote the launch of new products, recommending companies with content reserves and product cycle advantages.

Guosheng Securities indicated that it recommends positioning in the gaming sector with low valuation and high prosperity, especially on the left side. They also mentioned that the current position continues to warrant attention, with the core logic being low valuation plus high prosperity. They are optimistic about 1) high growth in Q1 and the full year: Giant Network, Century Huatong, and Xindong Company; 2) new product launches and key reserves: 37 Interactive, Perfect World. On the industry side, Tencent’s old IP pet game “Rock Kingdom” launched 13 hours after opening, with over 15 million new users, topping the bestseller list, confirming their previous logic of “high cost-performance game prosperity exceeding expectations.” Looking ahead, in April, new titles such as “Honor of Kings World” and “Yihuan” are expected to launch, maintaining ample supply.