HK Stock Market Move | Today, gaming stocks saw a general surge. Domestic games are less affected by tariffs and the policy signals for the gaming industry continue to be favorable.

The game stocks rose across the board today. As of the time of writing, IGG (00799) rose by 7.69% to 3.36 Hong Kong dollars; XD INC (02400) rose by 4.19% to 31.1 Hong Kong dollars; NTES-S (09999) rose by 4.16% to 157.7 Hong Kong dollars; CMGE (00302) rose by 2.94% to 0.35 Hong Kong dollars. Central China pointed out that it is recommended to focus on the gaming sector. From recent changes, the impact of Sino-US tariff on the domestic gaming industry is relatively small, and there is hope for valuation recovery in the future. The bank pointed out that based on the current performance of the domestic gaming market, player demand is strong, and by 2024, the scale of the domestic gaming market, user base, and ARPU value have all reached new highs. On the policy front, the number of game approvals continues to be relaxed, with a total of 362 domestic game approvals issued in Q1 2025, an increase of about 8.7% year-on-year. Both national and local governments have repeatedly mentioned the important value of the game and esports industry in cultural communication and promotion, as well as in technological innovation empowerment in important policy documents. China Aviation Securities pointed out that on March 16, the Central Committee of the Communist Party of China and the State Council jointly issued the "Special Action Plan to Boost Consumption", which clearly stated its support for encouraging consumption of anime, games, esports, and their related derivative products, supporting the development of original IP, and integrating excellent Chinese traditional culture into digital product design. This shows that the regulatory authorities have shifted their strategic intentions from "prudent regulation" to "positive guidance" in the cultural content industry. Combined with the trend of normalized issuance of game approvals since 2024, the trend of opening up the supply side from the policy side has been further confirmed. We believe that the improvement in the policy environment will not only increase product supply but also enhance industry capital expenditure willingness, opening up the "policy bottom" stage of the industry prosperity cycle.