We expect a lukewarm 2Q24 and 3Q24, with mobile grossing growth expected to reaccelerate gradually in 4Q24, primarily due to soft grossing momentum during the summer holiday ahead amid mounting competition. We opine that the growth of the online games sector in 2024 will be fuelled by: a) normalised industry development with regular issuance of game licences, b) consolidation of top game producers, and c) a promising pipeline of blockbuster games. Maintain MARKET WEIGHT.
We believe efforts in user-focused and overseas expansion strategies will continue to help e-commerce companies regain GMV growth momentum and potentially improve take rates. We expect consumption behaviour to become service- and experienceoriented, which will benefit OTA players. With increasing shareholder returns and the recent ADR convertible issuance, the market will continue to focus on stock yields, companies’ cash positions and domestic regulations. Maintain MARKET WEIGHT.
GREATER CHINA Sector Automobile Weekly: EV sales pull back last week. Maintain MARKET WEIGHT. Top BUYs: Geely, CATL, Tuopu and Joyson Electronics. Top SELLs: XPeng. Internet Strategic revamp to foster re-accelerating growth and shareholders’ return. INDONESIA Update Bank Tabungan Negara (BBTN IJ/BUY/Rp1,240/Target: Rp1,700) ...
GREATER CHINA Strategy Alpha Picks: June Conviction Call: Adding KE Holdings and Wharf REIC to our BUY list; hedging with SELL call on BYD. INDONESIA Strategy Alpha Picks: First Month Of Underperformance In 2024: Our picks are EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Choices For A “Summer Lull”: Our Alpha Picks trounce the KLCI again. May 24 picks: BAUTO, BURSA, Gamuda, GENM, Lagenda, Mah Sing, MYEG, PMETAL, RGB, and VSI. SINGAPORE Strategy Alpha Picks...
What’s new: NetEase’s reported 1Q24 revs that were largely in-line with consensus but below our expectations. Part of the gaming rev growth could be pushed out to 2H24 and FY25 due to launch delays of key titles and adjustments in FWJ that may impact PC rev growth in the near-term. We maintain our PT at USD100. Analysts: Jin Yoon
NetEase’s 1Q24 results are largely within consensus expectation. Revenue grew 7.2% yoy to Rmb26.9b, in line with our and consensus forecasts. Net profit rose 12.5% yoy to Rmb8.5b, 2% above consensus estimates. We believe Netease’s online games revenue growth will be reignited in 2H24 due to the incremental grossing from upcoming game launches and agreement renewal with Blizzard. Maintain BUY with a lower target price of HK$180.00 (US$115.00).
KEY HIGHLIGHTS Results KE Holdings Inc (2423 HK/BUY/HK$49.45/Target: HK$55.00) Beike’s 1Q24 results were largely in line. 1Q24 revenue dropped 19% yoy to Rmb16.4b, in line with consensus estimate. Non-GAAP net profit slumped 61% yoy to Rmb1.4b due to increased investment for new initiatives, 35% above consensus estimates. Non-GAAP net margin contracted 9ppt yoy to 8.5% in 1Q24. Beike guided for 2Q24 revenue to remain under pressure at Rmb21b-21.5b, up 10% yoy, 5% higher than consensus estima...
GREATER CHINA Results KE Holdings Inc (2423 HK/BUY/HK$49.45/Target: HK$55.00) 1Q24: Earnings beat; poised to capture solid recovery in 2Q24. Lenovo Group (992 HK/BUY/HK$11.32/Target: HK$13.50) 4QFY24: Solid results; AI PCs are just around the corner. NetEase (9999 HK/BUY/HK$141.50/Target: HK$180.00) 1Q24: Results in line; 2Q24 game growth could be better than feared. Xiaomi Corp (1810 HK/BUY/HK$18.94/Target: HK$23.80) ...
We expect lukewarm mobile grossing growth in 1Q24, with an expected reacceleration in 2Q24, primarily boosted by the release of several highly-anticipated blockbuster titles. We are optimistic on the growth of the online games sector in 2024 as it will be driven by a further acceleration in Banhao approvals, consolidation towards top game producers and the emerging popularity of mini-games. Maintain MARKET WEIGHT.
GREATER CHINA Strategy Alpha Picks: May Conviction Call: Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
Given the stabilising revenue growth and abundant cash on hand, mega-cap internet companies have been focusing on offering generous shareholder returns. For 2024, we expect consumption behaviour to switch to service and experience, which will continue to benefit OTA players. We believe other China internet names will outperform with overseas expansion and SFV players will continue to gain market shares with potential for take rate increases. Maintain MARKET WEIGHT.
GREATER CHINA Strategy Alpha Picks: April Conviction Calls: Adding AIA, Midea, Hansoh Pharmaceutical, Shenzhen Inovance and Trip.com to our BUY list, with SELL calls on BYD, EVE Energy, and Li Auto. INDONESIA Strategy Alpha Picks: Outperformance In Mar 24 and 1Q24: Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. MALAYSIA Strategy Alpha Picks: Expanding The Variety Of Events Bets: Our Alpha Picks trounced the KLCI in Mar 24. Apr 24 picks: GENM, Inari, Mah Sing, MrDIY, MY...
A director at NetEase Inc sold 10,000 shares at 108.200USD and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly s...
GREATER CHINA Strategy Alpha Picks: March Conviction Call: Adding CMB, COLI, CR Beer, Kuaishou and TUL to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Significant Outperformance In Feb 24: Our picks are BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Focusing On Earnings Momentum: Our Alpha Picks underperformed the KLCI in Feb 24 (-0.9% vs 2.5%). Mar 24 picks significantly feature companies with good earnings momentum. SINGAPORE...
What's new: NetEase’s reported 4Q23 results were below consensus and our expectations. Gaming could remain resilient in 2024 partly driven by new title launches such as Condor Heroes, Where Winds Meet, and Naraka Bladepoint mobile. We maintain our PT at USD125. Analysts: Jin Yoon
NetEase’s 4Q23 results fell below consensus estimates. Revenue grew 7% yoy to Rmb27.1b, 4% below our and consensus forecasts. Net profit surged 53.4% yoy to Rmb7.4b, 7% below consensus estimates. We believe 2024’s performance will be driven by: a) incremental grossing from upcoming game launches, b) encouraging progress of Banhao approval in 2024, and c) strong gross margin anchored by payment channel migration. Maintain BUY. Target price: HK$202.00 (US$129.00).
GREATER CHINA Sector Automobile: Weekly: PEV market share rebounds; price war heats up. Maintain UNDERWEIGHT. Top SELLs: XPeng. Top BUY: CATL, Tuopu and Desay SV. Results Budweiser APAC (1876 HK/BUY/HK$12.68/Target: HK$19.50): 2023: Results miss; mixed signals from the results. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$242.80/Target: HK$262.00): 4Q23: Passable results. Maintain HOLD. NetEase (9999 HK/BUY/HK$176.20/Target: HK$202.00): 4Q23: Earnings miss; upcoming blockbusters in 2024. New...
KEY HIGHLIGHTS Sector Automobile Weekly: PEV market share rebounds; price war heats up. Maintain UNDERWEIGHT. Top SELLs: XPeng. Top BUY: CATL, Tuopu and Desay SV. Results Budweiser APAC (1876 HK/BUY/HK$12.68/Target: HK$19.50) 2023: Results miss; mixed signals from the results. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$242.80/Target: HK$262.00) 4Q23: Passable results. Maintain HOLD. NetEase (9999 HK/BUY/HK$176.20/Target: HK$202.00) 4Q23: Earnings miss; upcoming blockbusters in 2024...
NTES will report 4Q23 results on February 29th before the markets open with a 7am ET conference call. We are positive on NTES’s 4Q23 performance. The positive performance, we believe, is driven by the better performance from both domestic and international markets. Internationally, over the last two years, NTES has developed 22 overseas game studios. We expect NTES to have more overseas studios set up in 2024. Domestically, we believe existing PC games contributed more to the bottom line in 4Q23...
The HSI and the MSCI China fell 9.2% and 10.5% mom respectively in Jan 24, dragged down by IT and consumer discretionary stocks amid low market confidence and negative geopolitical news flow. The policy easing in late-Jan 24 may have established a bottom, but the timing of a new upcycle remains uncertain, contingent on favourable macro news flow in the near term. Hence, we remain hedged, adding COSCO Shipping Holdings and FII to our BUY list, with additional SELL calls on Li Auto and Xpeng.
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