NetEase (NTES); HK 9999

[winston]

not vested

<Research>M Stanley Chops NetEase, Inc. (NTES.US) TP to US$135, 2024 Game Rev. Growth Forecast to 10%

NTES-S (09999.HK) After "Condor Heroes" was officially launched last Thursday (28 March), with the opening of an open test on all platforms, Morgan Stanley released a research report saying. However, its performance after the launch seems to be weaker than expected.

Overall, Morgan Stanley lowered its 2024 to 2025 diluted EPS forecasts by 4-9% for NTES-S, and chopped its target price on NetEase, Inc. (NTES.US) from US$150 to US$135.

Related News: JPM Notes Weaker-than-expected Debut of NTES-S (09999.HK)'s 'She Diao' Game

Morgan Stanley predicted that game revenues in 1Q24 and 2Q24 will fall by 5% and 12% YoY each, and the annual growth forecast for game revenues will be lowered to 10%.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

NTES, Blizzard Promise to Keep Past Player Data; 220K+ Pax Make Reservations for World of Warcraft

The Chinese servers of Blizzard will return this summer.

The joint game publishing team of NTES-S (09999.HK) and Blizzard released a letter to players of the Chinese servers, mentioning that it will still take a short period of time to make technical preparations for the servers to reopen, including building new server rooms and restoring all kinds of data.

The team promised that past account data would be kept intact when the servers reopened.

Gaming community NetEase Dashen has also opened reservations for World of Warcraft, with more than 220,000 people having made reservations.

Related News: HSBC Global Research Prefers Meituan/ Tencent/ NetEase/ PDD Among CN New Econ Stocks

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

vested

<Research>BOCOMI: Renewed Collaboration of NTES-S & Blizzard Has Limited Impact on ST Results, but Raises LT Room for Overseas Cooperation

BOCOMI highlighted in a report that on 10 April (yesterday), Blizzard China and NTES-S (09999.HK) jointly announced a renewal of their agreement, and Blizzard games will gradually return to the China market starting this summer.

The broker said Blizzard's resumption of cooperation will have a limited impact on NetEase's short-term results, while the agreement between NetEase and Microsoft, will help to increase the room for long-term overseas cooperation between the two parties.

According to BOCOMI, NetEase's agreement with Microsoft to promote the launch of the former's new games on XBOX and other platforms will be beneficial to NetEase's multi-terminal deployment of games overseas.

The agency service contract between the two parties in Mainland China was terminated in January 2023, which resulted in a 17% YoY decline in NetEase's 2023 online game revenue.

Related News: CICC: Blizzard's National Service Returns, Concern on NTES-S Self-developed New Product Development

Assuming that the performances of legacy games are stable, the broker estimated that the revenue from operating Blizzard's games in 2022 was about RMB3.9 billion, accounting for less than 5% of NetEase's total revenue.

Considering that the profit margin of licensed games is lower than that of self-developed games, it is expected that the contribution of Blizzard's games to profit will be even more limited.

Assuming that Blizzard's Chinese servers will return in 2H24, the broker expected NetEase's online game revenue in 2024 and 2025 will be adjusted upward by 11% and 19% respectively compared with the previous forecasts and online games will resume a growth rate of more than 20% in 2H.

It is expected to contribute an upward adjustment of 2-3% to the company's annual total revenue, and the impact on profit will be limited.

Based on the recent revenue fluctuations, BOCOMI lowered its 2024 revenue and profit expectations on NetEase by 2% and 4%, and lowered its H-share target price from $206 to $194.

The broker expected the launch of heavyweight handheld games "Naraka Bladepoint Mobile" and "Where Winds Meet" this year, to boost the company's game revenue growth, and maintained its Buy rating.

Related News: HSBC Global Research Prefers Meituan/ Tencent/ NetEase/ PDD Among CN New Econ Stocks

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

‘World Of Warcraft’, other top games to return to China

By JING XUAN TENG and LUDOVIC EHRET

Sequential return of World Of Warcraft (WoW) alongside first-person shooter Overwatch and spin-offs such as WoW card game Hearthstone.

Source: AFP

https://www.thestar.com.my/tech/tech-ne ... n-to-china

[winston]

vested

NTES-S' World of Warcraft Records 2M+ Pre-orders for CN National Service

World of Warcraft (WoW) announced that over 2 million pre-orders have been recorded as of 11:59 pm on 10 April, after the official announcement on its return of the national service, according to Chinese media.

Players can recover or repair their accounts at NTES-S (09999.HK) 's Dashen, and more services will be launched in the future, WoW said.

Related News: JPM: Blizzard's Comeback Supports NTES-S (09999.HK)'s ST/ LT Game Outlook

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>BOCI Foresees NTES-S (09999.HK) 1Q Total & Core Online Game Revenues to Rise 7%; Rating Buy

BOCI forecast NTES-S (09999.HK) to report a 7% YoY hike for both the total and core online game revenues in 1Q24, according to a research report by BOCI.

Among which, mobile game revenue will remain stable, up 15% YoY; GPM and OPM will hit 62.2% and 29.6% respectively, both in line with street consensus.

The broker expected Blizzard to resume operations in China from this summer, and the deepening partnership with Microsoft will not only help elevate users and revenue, but also unlock medium- to long-term potential.

Related News - CICC: Blizzard's National Service Returns, Concern on NTES-S Self-developed New Product Development

In view of the potential game GPM dilution and the rise in operating expenses due to the return of Blizzard, the broker expected the group's adjusted net profit to rise by 2% YoY to RMB33.4 billion in FY2024.

The broker maintained its Buy rating with a TP of $204.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

vested

<Research>BOCOMI Trims NTES-S (09999.HK) TP to $194; Cooperation Resumption with Blizzard Has Limited Impact on ST Results

NTES-S (09999.HK) announced on 10 April that it renewed the agreement with Blizzard Entertainment, therefore, Blizzard Entertainment's games will return to the Chinese market successively from summer, BOCOMI issued a research report saying.

In addition, Microsoft and NTES-S reached an agreement, including publishing new NTES-S' games on other platforms like XBOX.

Related News - CICC: Blizzard's National Service Returns, Concern on NTES-S Self-developed New Product Development

BOCOMI believed that Blizzard Entertainment's resumption of cooperation will have a limited impact on NTES-S' short-term results, and that the agreement with Microsoft will help to increase the room for long-term overseas cooperation between the two companies.

BOCOMI lowered its revenue/ profit estimations for NTES-S by 2%/ 4% each, and trimmed its target price from $206 to $194, with rating kept at Buy.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

not vested

<Research>Macquarie Forecasts NTES-S (09999.HK) 1H24 Earnings to Grow Moderately, Lowers TP to $215

Macquarie wrote in a report that NTES-S (09999.HK) has lost 10% of its value from its highs this year, while the MSCI China Index has risen 9% over the year.

The valuation gap between NetEase and its gaming peers has widened significantly, which the broker attributed to weaker-than-expected new game releases and weak performance from older, legacy games.

Nevertheless, the broker believed these negatives have been reflected in the stock price, and predicted that NetEase's 1H24 earnings will see modest growth.

The group continued to demonstrate strong game development capabilities, and a solid product pipeline is expected to drive accelerated growth in 2H24.

Taking into account weaker-than-expected game launches and the weak performance of legacy games, Macquarie lowered its 2024 and 2025 EPS forecasts on NetEase by 9% and 5% respectively.

The broker also dropped its target price on NetEase H-shares from $249 to $215 and gave the stock an Outperform rating.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

[winston]

not vested

<Research>CICC Cuts NTES-S (09999.HK) TP to HK$206, Predicts 1Q24 Non-GAAP NP to Lift 9%

CICC forecasted in a report that NTES-S (09999.HK) would report a 6% YoY growth in 1Q24 revenue to RMB26.4 billion, compared to the consensus prediction of RMB26.8 billion.

Specifically, the broker expects the group's mobile games revenue to rise 11% YoY to RMB15 billion, compared with the market forecast of RMB15.5 billion, while non-GAAP net profit is expected to elevate 9% to RMB8.2 billion.

CICC noted that the release date of NetEase's handheld game "Where Winds Meet" has not yet been scheduled, and it is relatively cautious about the revenue of the group's existing games.

The broker therefore lowered its non-GAAP net profit forecasts on the group by 2% in 2024 and 2025, which are now expected to reach RMB33.4 billion and RMB37.2 billion respectively.

Related News: Macquarie Forecasts NTES-S (09999.HK) 1H24 Earnings to Grow Moderately, Lowers TP to $215

CICC maintained its Outperform rating on NetEase. The broker lowered its H-share target price by 2% to HK$206, while its US-share target price was cut by 4% to US$133.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

NTES-S Slips 3%+, Downgraded by M Stanley

NetEase (NTES.US)was downgraded to Equalweight from Overweight and its TP was lowered to US$100 from US$120 in a report by Morgan Stanley.

According to the broker, the risks posed by a feeble macro-economy, more intense competition and potential regulation continued to emerge, undermining the potential for return on capital invested in NetEase's existing and future games.

The company is set to announce its first quarterly results after the market closes today (23rd).

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news