Huaxin Securities: Continuous support from new technologies in the experience economy can be seen from Citywalk. Urban experiences are expected to lead the future development of the cultural and tourism industry in new directions.

According to the information obtained from the Zhongtong Finance APP, Huaxin Securities has released a research report stating that the media industry is mainly focused on the supply and demand aspects. It encompasses new demands brought about by intergenerational changes in users, as well as new experiences and applications brought about by technological advancements (such as content, media, and digital marketing). The new demands of each generation of users are expected to bring about new supplies. From the perspective of experience economy, new technologies are continuously enhancing the experience at Citywalk. Through digital means such as VR and AI, the cultural and tourism experiences are being recreated. Urban experience is the key core of cultural tourism, and the creation of immersive experiences that combine reality and fiction through narrative plots and techniques is becoming an important step in expanding the development of the cultural tourism industry. It is expected to lead the industry in future development. By combining XR content, 3D interactive content, AI content creation (AIGC), and popular IP collaborations with technology and operations, and leveraging the unique characteristics of cultural tourism projects, new experiences can be brought to C-end users, thereby generating new business growth.

From an investment perspective, there are two dimensions to consider. The first dimension is to focus on companies with the ability to sustainably create original content. The second dimension is to focus on companies that excel in applying new technologies. Each cultural trend reflects new supply-demand contradictions and contains new business potential, which in turn provides recommendations for the media industry's rating. It is advisable to actively pay attention to companies in the media industry that focus on content as the core, use media as a means, empower urban renewal, empower C-end experience economy, and actively explore the application of new technologies. Examples of such companies include Mango Super Media (300413.SZ), BlueFocus (300058.SZ), Fengyu Zhu (603466.SH), Zhejiang Wenhu (600986.SH), Hengdian Film and Television (603103.SH), CITIC Publishing (300788.SZ), New Classics (603096.SH), and Huace Film & TV (300133.SZ).

The main points of Huaxin Securities' report are as follows:

New Considerations for the Citywalk Experience Economy Prevalent in 2023

Citywalk, originating from London, refers to walking or cycling to explore the city, experiencing the alternation of old and new in urban renewal and urban culture at a slow pace. After the advent of mobile internet and influenced by intergenerational changes in consumer groups and the impact of the pandemic, consumers are consciously rebuilding their connection with physical civilization and seeking new experiences in the virtual and real world. The prevalence of Citywalk in 2023 also highlights new user demands and is expected to bring about new paradigms and consumption patterns in urban experiences. Consumer activities within the circle of life include watching movies, visiting exhibitions, and experiencing cultural new business cards related to urban renewal (such as Datang Ever Night City, Guizhou Village BA, Zibo Barbecue, Hangzhou during the Asian Games, etc.). The core of cultural tourism is the integration of people's livelihood, culture, and tourism. Under new demands, it is also driving new supplies from companies and local governments.

New Supplies in the Business Exploration of the Experience Economy: VR+IP+Exhibitions

In 2023, offline experience economy is also rebounding, and VR+IP exhibitions are gaining popularity. For example, the Shanghai VR exhibition "Immersive Exploration of the Disappeared Pharaoh's Pyramid" is the world's first commercially operated large-scale immersive exploration project. The VR full-sensory theater project "Fengqi Luoyang" in the national trend-setting metaverse theme park "X-META" has received high attention. "Fengqi Luoyang" VR full-sensory theater has created a new sample of cultural tourism metaverse. The metaverse has grown into a new blue ocean for the digital cultural and creative industry. Shanghai is accelerating the development of technological breakthroughs, immersive interactive content, and new scenes for urban cultural tourism. VR theaters and VR+IP are helping to promote and enrich the content of cultural tourism products, becoming a new model for digital cultural creativity and driving the growth of content and technology companies in the media industry.

Urban Renewal: A New Exploration of the Experience Economy

Looking from top to bottom, in 2017, the "Beijing Urban Master Plan (2016-2035)" was approved, which emphasized the protection of Beijing's historical and cultural heritage, the sustainable use of historical and cultural resources and natural ecology, and the harmonious coexistence with modernization. In 2023, the "Shanghai Urban Renewal Action Plan (2023-2025)" was released, which stated the goal of creating more than 15 demonstration projects for the protection and restoration of historical buildings by 2025, inheriting and showcasing the Shanghai-style culture. Currently, China's urbanization has entered the middle and late stages, and urban construction has shifted from large-scale incremental construction to the improvement of existing stock and structural adjustment. Cities have proposed to prioritize urban examination, play a coordinating role in urban renewal planning, and innovate sustainable implementation models for urban renewal. The urban renewal business has also driven the growth of commercial projects in the G-side and B-side. For example, Fengyuzhu won the bid for the Shanghai Urban Space Art Season (2023 Shanghai Urban Space Art Season theme activity plan and execution management) project. With urban renewal becoming a national strategy, Fengyuzhu has been continuously exploring the development of empowering urban architectural spaces through public art. With a core content matrix of "international perspective + historical revitalization + digital empowerment + cultural IP + integration of culture and tourism," it has shaped the development direction of urban renewal business with the characteristics of "activating existing assets + continuing historical context + revitalizing historical culture."

Investment Rating

A recommended rating is given to the media industry. The media industry mainly focuses on the supply and demand sides, from the new demands brought by intergenerational changes in users to new experiences and applications brought by technological advancements (such as content, media, digital marketing, etc.). The new demands of each generation of users are expected to bring new supplies. From the perspective of the experience economy, new technologies are continuously being applied, and the reproduction of cultural and tourism experiences through digital means such as VR and AI is being realized. Urban experience is the key core of cultural tourism, and the creation of immersive experiences combining virtual and reality through narrative plots and methods is becoming an important step in expanding the development of the cultural tourism industry, which is expected to lead the industry in the future. Through technologies and operations such as XR content, 3D interactive content, AI content creation (AIGC), and popular IP collaborations, combined with the inherent characteristics of cultural tourism projects, new experiences can be brought to C-end users, thereby generating commercial growth. From an investment perspective, the first dimension to focus on is companies with sustainable capabilities in creating original content. The second dimension is companies with strong application-oriented new technologies. Each cultural trend reflects new supply-demand contradictions and contains new business potential, which warrants a recommended rating for the media industry. It is advisable to pay attention to companies in the media industry that focus on content as the core, use media as a means, empower urban renewal, empower the C-end experience economy, and actively explore new technological applications, such as Mango Super Media, BlueFocus, Fengyuzhu, Zhejiang Wen, Hengdian Film and Television, CITIC Publishing, New Classics, Huace Film and Television, etc. Risk Warning

Risks include changes in industry policies, underperformance of recommended company performance, industry competition risks, underperformance in the progress of new business developments, underperformance in the application of new technologies, risks of sudden public health events, and risks of macroeconomic fluctuations, etc.