In less than three months, the gaming sector witnessed a rise of over 50%, reigniting the capital markets' interest in the gaming industry. This phenomenon not only reflects the market's optimistic expectations for the future development of the gaming industry but also indicates that investor confidence in related companies is gradually increasing.

Recently, Gelonghui held the "9th Gelonghui Global Investment Carnival 2025." Among them, baioo was awarded the "Outstanding IR Team of the Year (Market Cap Under 10 Billion)" award, undoubtedly affirming baioo's efforts in investor relations activities and business operations over the past year.

As the market matures and regulations become stricter, investor relations work is also evolving towards digitalization, refinement, and systematization. Investors' understanding and recognition of baioo will also be a strong guarantee for the company's sustainable development, motivating it to continuously improve governance levels and optimize industrial layout to achieve long-term stable development.

1. User-centered, "Innovation + AI" employs multiple measures to solidify IP brand influence.

Behind the significant achievements in IR, there is strong evidence of baioo's steady progress in the gaming field.

Looking back at 2024, baioo focused on women's content, pet collecting, and nurturing in advantageous gaming niches, continuously innovating and updating game content and mechanics, actively integrating cutting-edge technology to meet the growing demands and expectations of players. This not only enhances the attractiveness of the games under the company but also reinforces its moat amid fierce competition in the gaming market.

On one hand, the company continuously pursues innovation through diversified strategies such as optimizing gameplay, enhancing user experience, cross-industry collaboration, and inheriting Chinese traditional culture, consistently launching high-quality game content and expanding the influence of its IP brands.

Taking the Aoqi Legend IP as an example, the operation of the mobile game "Aoqi Legend" for over three years has successively launched the updates "Descent: The Saint Dragon of End" and the three-year anniversary version "Flame Returns Home", as well as the National Day version "Sun and Moon Coronation", which greatly enriches the depth and fun of the game, winning wide acclaim from players. At the same time, the web version of "Aoqi Legend" which has been operating for over 12 years is continuously collecting player feedback to innovate gameplay mechanisms and update game content. A series of innovations has not only improved community activity but also driven year-on-year growth in web and mobile games in the first half of the year.

In terms of cross-industry collaboration, Aobi Island, a hit IP with over 15 years of operation, has seen its mobile game "Aobi Island: Dream Kingdom" collaborate with over 20 IPs and brands, including "Balala the Fairies", CCTV Animation, "Pleasant Goat and Big Big Wolf", trendy IP ShinWoo Ghost Bear, EMMA, and Chabaidao since its launch. It has frequently collaborated with trendy IPs to bring beloved characters into the game, significantly enhancing user engagement. These collaborations not only broaden the audience base of the game but also bring new vitality to the brand.

Furthermore, as the gaming industry gradually becomes an important carrier for the inheritance and development of Chinese traditional culture, during this year's Spring Festival, the mobile game "Aobi Island: Dream Kingdom" collaborated with the Palace Museum cultural IP "The World Inside the Palace", launching a Spring Festival version that not only recreated the large scene of the "Forbidden City" but also restored real landscapes like the Taihemen Square, Taihe Hall area, Imperial Garden, East Six Palaces, and West Six Palaces, and introduced a hidden scene "Along the River During the Qingming Festival: Illusion", while also referencing the colors and patterns of cultural relics in outfit design.

This respect and inheritance of traditional culture along with detailed handling further enhances the cultural depth of the game, increases player immersion, and allows "Aobi Island: Dream Kingdom" to maintain a place among many games.

On the other hand, the company has also demonstrated foresight and proactivity in technological innovation by integrating AI technology into its game products, enhancing research and operation efficiency, and bringing a whole new experience to players.

Indeed, the steady growth of baioo is not only reflected in its good reputation within the industry but is also clearly demonstrated in the data from its daily operations, further confirming the market's high recognition of the company's game products.

According to the latest unaudited key operational indicators for the third quarter, the company's quarterly active accounts reached 7.4 million, a 32.1% increase quarter-on-quarter, showcasing the company's ability to attract new users and maintain the activity level of existing users.

At the same time, the company's quarterly number of paying accounts and average revenue per paying account both achieved quarter-on-quarter growth. A key reason for the steady growth in users lies in the successful launch of the 'Food Stories Companion Edition' and the company's improved game operation model, which effectively enhanced user engagement and willingness to pay.

2. Catch both domestic and overseas markets, value realization under a global vision.

Looking ahead to future development, baioo is in line with domestic development trends and grasps overseas market demands, likely to continue realizing value release globally.

Focusing on the domestic market, various factors such as policy support, technological advancement, and increasing issuance of game licenses have together driven an upward trend in the development of china's gaming industry. While enhancing the activity of the domestic gaming market and the resilience of user consumption, this also injects endless vitality into the entire industry.

For instance, this year, the 'State Council's Opinions on Promoting High-Quality Development of Service Consumption' has, for the first time, included online games and esports in national policy documents, along with a series of policy measures encouraging game companies to increase R&D investment and promote the internationalization of the gaming industry, creating a favorable development environment for the gaming industry. Also, with the increasingly widespread application of AI technology in game production, many companies have begun to deeply integrate it into their business, continuously unlocking the potential of game products, further driving innovation and competitiveness within the industry.

Public data shows that before the third quarter of 2024, the cumulative issuance of domestic online game licenses reached 959. Adding the 113 licenses issued in October, the total number of issued licenses for the year has reached 1,072, significantly exceeding the same period last year. This kind of growth provides a solid foundation for newly launched products and greatly boosts market activity.

Additionally, it is worth noting that a new force called "Millet Economy" is rapidly rising in the capital markets, becoming a focus of attention for investors, which reflects the importance of IP in today's economy.

At the 2024 Game Ecosystem IP Conference, Ao Ran, Executive Vice Chairman and Secretary-General of the China Audio-Video and Digital Publishing Association, stated, "Games, as a perfect combination of audiovisual art and interactive experience, represent a diverse and complex system of IP ecology. Currently, China's game IP ecology demonstrates extraordinary vitality, mainly reflected in the continuous emergence of high-quality content, the heated momentum of cross-border integration, the ongoing enhancement of user stickiness, the reshaping of commercial value, and the empowering development of technological innovation."

These factors combined showcase the significant economic value of IP in the gaming industry and its driving role in the overall industry development.

Gamma Data's "2024 China Game Industry IP Development Report" further confirms this. In the first three quarters of 2024, China's game IP market achieved actual sales revenue of 196 billion yuan, of which 82% was contributed by IP products.

In this larger environment, baioo holds several long-term IPs such as Ao Bi Island and Ao Qi Legend, having accumulated rich experience in successful operation and continuous innovation. This experience provides a solid foundation for the company to deepen the development and application of IP in the future and explore breakthroughs in other categories, and it is expected to help the company gradually build a richer product matrix, efficiently meeting high-quality and diversified user needs, and further enhancing its competitive advantage in niche tracks.

Looking at the global market, active capital activities and stable growth in diversified demand point to a common trend: the global game market continues to grow.

The signs of recovery in game merger and acquisition activity are particularly evident. An investment bank report from Drake Star indicates that there were a total of 56 publicly disclosed acquisition and merger deals in the global gaming industry in the third quarter of this year, with a total funding amount of 2.5 billion dollars, a year-on-year increase of 70%, demonstrating confidence in the capital market regarding the gaming industry and signaling that the pace of industry consolidation and expansion is accelerating.

Newzoo's latest report on market analysis further confirms the growth momentum of the global gaming market. The report forecasts that the global gaming market size will reach 187.7 billion dollars in 2024, a year-on-year growth of 2.1%. At the same time, the number of global gamers is expected to increase to 3.42 billion, a year-on-year growth of 4.5%. Especially in the Asia-Pacific region, Newzoo predicts that the number of players will grow by 4%, reaching 1.8 billion, accounting for 53% of the global total, and will play an increasingly important role in the global gaming market.

Currently, the company is leveraging its advantages in specialized sub-sectors, relying on years of accumulated experience to launch differentiated products both domestically and internationally. At present, the company has six products in preparation, aimed at achieving multi-category development and building a diverse product line.

By strengthening international market promotion and utilizing the internationalization strategy of core self-developed IP, baioo will be able to enhance its competitiveness in the global market and explore new growth opportunities. This diversification and globalization market layout strategy will enable the company to achieve sustainable growth in the ever-changing global gaming market.

Summary.

From a series of recently published research reports, the gaming industry has become one of the sectors that many securities companies are generally bullish on. Since October, several brokerages, including Southwest Securities, china international capital corporation, and Open Source Securities, have released positive research reports on the gaming industry, reminding investors to pay attention to investment opportunities in game asset valuation recovery.

In this larger context, baioo, as a participant in the sector, is expected to grow based on its own advantages and strategic layout.