3Q22 Media Industry Review: Revenue remains flat, profitability affected by weak macro. Publishing and broadcasting sectors grow yoy, while gaming, ads, and digital media decline. Total industry profit down 31% yoy, mainly due to gaming sector profit decline of 46%. Gaming industry revenue down 7% yoy, GPM down 2.4ppt yoy, NPM down 9.1ppt yoy. We expect a new product cycle to come and gaming industry revenue to recover with normalization of domestic "Banhao" issuance. Innovative and high-quality games expected to perform well with total "Banhao" number control. Overseas revenue of mobile games expected to return to high growth rate with increased overseas layout by domestic gaming companies. We recommend 37 Interactive Entertainment Network, G-bit, Perfect World.
