Founder Securities: CHINA RUYI is expected to fully benefit from the reshaping of content production, distribution, and other aspects by AI, initiating a "Buy" rating

According to the Zhitong Finance APP, Founder Securities has released a research report stating that it is initiating coverage and giving China Ruyi (00136) a "Recommended" rating. It is expected that the company's adjusted net profits for 2025-2027 will be 2.157 billion, 2.447 billion, and 2.850 billion yuan, corresponding to PE ratios of 19, 16, and 14 times, respectively. Considering China Ruyi's growth momentum, the clear development path behind the growth, and investment support; as a new leader in the film and television industry, it is expected to fully benefit from the AI wave reshaping content production, distribution, and other aspects. In 2025, against the backdrop of a complete industry cleanup and AI reshaping various sectors, the firm predicts that the film and television sector, as a classic content industry, will establish a new pattern and create new leaders during its development process. In terms of film content, the company has strong capabilities in deep content exploration and high-quality production; it has a substantial reserve in production and distribution, as well as diversified thematic layouts; in the television drama sector, the company excels in full-process production capabilities, focusing on high-quality IP development and high-quality content production, while actively collaborating with major domestic video platforms and expanding into overseas markets. Pumpkin Film, as a long video platform, consistently adheres to "empowering content distribution with technology"; the company emphasizes the penetration of AI technology in content creation, user services, and channel operations, driving differentiated competitiveness in the streaming media business through technological innovation, aiming to consolidate and enhance its industry position more smoothly. The company's gaming business maintains a high-level growth strategy, including: 1) boutique research and operation; 2) deepening film-game linkage; 3) IP commercialization operations. Actively laying out in sports, MMORPG, music and dance, and other fields; 4) AI-enabled improvement of R&D efficiency. In the process of becoming a new industry leader, investment and mergers and acquisitions have become important supports for the company; the company's investments and acquisitions focus on core tracks: 1) investing in and acquiring Wanda Film, with prominent strategic synergy effects. After the investment is completed, the company has achieved a full-process connection from content creation and production to terminal screening; 2) strategic investment in 52TOYS, laying out IP derivative businesses. 52TOYS has rich proprietary IP resources and has established cooperative authorization relationships with many internationally renowned IPs; 3) initiating the acquisition of 30% equity in Kuaiqian, deepening the "culture + technology + finance" strategic layout