Tian Hou
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NTES: Newly Released Games Make Contributions To NTES In 2Q21 And 3Q21; Downward Adjustment Of DAO’s Revenue Outlook

NTES will release 2Q21 results in mid-August. We are positive on NTES for 2Q21. While 2Q21 was a relatively quiet quarter for games and other forms of entertainment, NTES managed to release new games, including Revelation, Yu-Gi-Oh! Duel Links, Dream and Lethe Record, and Pokémon Quest. Among these, Revelation Mobile has become popular. The new games are making contributions to both 2Q21 and 3Q21. In addition to domestic game market, NTES is aggressively expanding internationally. At NTES’s annual product launch event in May, the company released approximately 19 titles that can eventually be distributed overseas. NTES is also negotiating with distribution partners on the fees as it has more advantages in content development, which we believe will lead to better economics for NTES from some new games. Based on our data, NTES’s 2Q21E revenue is likely to be in line with the Street consensus at RMB20,489M (12.7% Y/Y growth).

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T.H. Capital
T.H. Capital

​T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.

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