The Gaming Sector Performs Strongly: Game ETF Sees Significant Gains

On September 27, the A-share online game sector experienced a notable surge, with the game ETF (159869) closing up 6.87%. The transaction volume reached a record high of 988 million, indicating a significant increase in market activity. Furthermore, the gaming ETF (159869) has received net inflows of funds for two consecutive days, with the cumulative net inflow reaching 106 million yuan.

Huatai Securities believes that the game sector has gradually emerged from its bottoming stage, driven by several key factors. These include new product expectations, which are expected to support EPS upward space, and stable policies, which have been positively publicized by official media, supporting the continued repair of valuations. The new product launches of leading game companies in 2024H2 and 2025 are expected to contribute considerable performance flexibility. The current PE of the core target valuation in 2024 is in the 10-15x range, and the valuation switch in 2025 will be more cost-effective.

A research report released by GF Securities highlights the growth of the game market in August, driven by the success of “Black Myth: Wukong”. The industry revenue scale increased, demonstrating the strong resilience of the demand side. The emergence of key industry products has driven significant growth in industry revenue, and the supply of high-quality products continues to fulfill its ability to create demand. The number of editions issued in August has increased, and the quantity side of industry supply is expected to improve. More excellent products are expected to appear in the future, which will increase the scale and influence of the game market.

The game sector has multiple catalytic factors for changes in AI, content, and commercialization models. The game ETF (159869) tracks the CSI Animation and Game Index, reflecting the overall performance of A-share listed companies in the animation and game industry. This presents a valuable opportunity for investors to explore the layout opportunities of the game ETF (159869).

The gaming sector is seeing allocation opportunities, with industry valuations at low levels and a new product cycle expected to arrive. As the sector continues to grow and evolve, it is likely to present attractive investment opportunities for those looking to capitalize on its potential.