reports
- Jin Yoon
NTES 3Q24 Results: PC to Drive Near-Term Gaming Growth
What’s new: NetEase’s reported 3Q24 revs that were largely in-line with consensus estimates. Mobile games could continue to see tougher YoY comps in 4Q, while PC games could remain resilient partly driven by new game launches and contribution from Blizzard games. We maintain our PT at USD90. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
NetEase (9999 HK): 3Q24: Earnings miss; eyeing encouraging game pipeli...
NetEase’s 3Q24 results were below expectations. Revenue dropped 4% yoy to Rmb26.2b, lower than our and consensus forecasts. Gross profit dipped 3% yoy to Rmb16.5b, with gross margin rising 1ppt yoy to 63%. Non-GAAP operating profit fell 3% yoy to Rmb8.1b, with operating margin of 29%. Non-GAAP net profit tumbled 13.3% yoy to Rmb7.5b, missing consensus estimate. Net margin shrank 3ppt yoy to 29% in 3Q24. Maintain BUY with a lower target price of HK$144.00 (US$92.00).
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Greater China Research Team
- Julia Pan Mengyao
- Ken Lee
- Ming San Soong
- Sunny Chen
Greater China Daily: Friday, November 15, 2024
KEY HIGHLIGHTS Sector Automobile China’s PV insurance registrations grew 27% yoy but fell 17% mom and 11% wow during 4-10 Nov 24. Major carmakers saw a dip in insurance registrations in China last week. PEVs’ market share rose 1.8ppt wow to 54.1%. We conducted a detailed assessment of the impact of US tariffs on the companies under our coverage, as shown in the last page. We believe auto part manufacturers are more vulnerable than OEMs. Maintain MARKET WEIGHT. Top BUYs: Geely, CATL, Fuyao, and...
- Julia Pan Mengyao
- Ming San Soong
China Internet: Key takeaways from marketing trip.
The key concerns of investors include the sustainability of the recent rally and potential fundamental changes upon policy rollout. We think a valuation repair is underway with the upcoming 11.11 campaign and 3Q/4Q24 results release as a critical juncture. Investors are also becoming increasingly optimistic on mega-cap names such as Tencent, Meituan, Alibaba and JD in view of a favourable regulatory backdrop and stabilised competitive environment. Maintain MARKET WEIGHT.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
002230 IFLYTEK CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
2013 WEIMOB INC
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
09888 BAIDU INC
02423 KE HOLDINGS INC.
09961 CTRIP.COM INTERNATIONAL
- Pelham Smithers
PSA Media & Entertainment: Video Games Round-Up
It has been a busy week for bean counters in the video games industry, with the release of global console sales data for September, US software and hardware markets for September, and weekly software sales for UK, Japan and Steam. These figures seem to paint a similar picture: hardware sales are bad, though not as bad as over the summer, while software sales are okay. Pelham Smithers elaborates.
- Julia Pan Mengyao
- Ming San Soong
China Internet: Government policy rollout to boost consumption and dri...
In view of a stronger-than-expected government policy rollout, we reckon that the improved consumption sentiment will benefit e-commerce, local life services and OTA companies. In 2H24, we expect the undemanding valuations of internet companies to be repaired by shareholder returns, cross-border expansion and easing competition. Meanwhile, we believe monetisation momentum will be fuelled by AIGC development and adtech upgrades. Maintain MARKET WEIGHT.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
002230 IFLYTEK CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
2013 WEIMOB INC
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
09888 PINDUODUO PDD US
02423 BAIDU INC
09961 KE HOLDINGS INC.
CTRIP.COM INTERNATIONAL
- Julia Pan Mengyao
- Ming San Soong
China Internet: 2Q24 results wrap-up: Overall earnings beat; 2H24 outl...
2Q24 revenue growth was lukewarm, hampered by a subdued macro backdrop, but most earnings beats were delivered by internet companies. We expect consumers to continue switching to service- and experience-oriented, which will benefit OTA, local life services and online games amid the summer holiday period. Key catalysts in 2H24 that will drive internet companies’ valuation repair include shareholder returns, cross-border expansion, easing competition and more, in our view. Maintain MARKET WEIGHT.
JD JD.COM INC. SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
002230 IFLYTEK CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
2013 WEIMOB INC
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
02423 KE HOLDINGS INC.
09961 CTRIP.COM INTERNATIONAL
- Jin Yoon
NTES 2Q24 Results: 2H Gaming Revs Dependent on Performance of Key Titl...
What’s new: NetEase’s reported 2Q24 revs that were below consensus but largely in-line with our expectations. Naraka Bladepoint mobile user trend remains healthy, while revs from FWJ PC version could start to stabilize heading into the 2H. We lower our PT from USD100 to USD90 on lowered outlook. Our updated PT of USD90 implies a 12.2x FY25E P/E. We maintain our NEUTRAL rating. Analysts: Jin Yoon
- Julia Pan Mengyao
- Ming San Soong
NetEase (9999 HK): 2Q24: Marginal revenue and earnings miss; continuou...
NetEase’s 2Q24 results slightly missed consensus expectation. Revenue grew 6.1% yoy to Rmb25.5b, slightly below our and consensus forecasts. Net profit dropped 13.3% yoy to Rmb7.8b, slightly missing consensus estimate. We believe the unfolding return of Blizzard’s game portfolio will contribute to NetEase’s online games revenue growth but dampen gross margin in 2H24. Maintain BUY with an unchanged target price of HK$180.00 (US$115.00).
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ken Lee
- Kenny Yong Hui Lim
- Ming San Soong
- Sunny Chen
Greater China Daily: Friday, August 23, 2024
KEY HIGHLIGHTS Results AAC Technologies (2018 HK/BUY/HK$31.25/Target: HK$38.10) AAC’s 1H24 earnings grew 257% yoy to Rmb537m, significantly exceeding our and consensus estimates. The strong growth was mainly driven by an all-around beat in gross margins across all business segments amid better end-demand, specs upgrades and a competitive landscape. Going forward, the product mix improvements, AI smartphone upgrades, and automotive business will continue to drive earnings recovery from 2H24-2...
K3SD BAIDU INC SPONSORED ADR CLASS A
01299 AIA GROUP LIMITED
A2XN AAC TECHNOLOGIES HOLDINGS INC.
M3I MINTH GROUP LIMITED
06098 COUNTRY GARDEN SERVICES HOLDINGS CO. LTD.
09999 NETEASE INC
2269 WUXI BIOLOGICS (CAYMAN) INC.
09888 BAIDU INC
600699 NINGBO JOYSON ELECTRONIC CORP
JOYSON ELECTRONICS CORP
- Pelham Smithers
- Julia Pan Mengyao
- Ming San Soong
China Internet: Online Gaming -- Pipeline of high-quality games as key...
We expect mobile grossing to be moderate in 1H24 but improve in 2H24, bolstered by incremental grossing contributions from new game releases during the summer holiday. The intensified industry competition amid strong seasonality is expected to boost grossing momentum but also hamper earnings visibility. We expect Tencent and NetEase to benefit from the stable issuance of game licences and the consolidation of top-notch game producers. Maintain MARKET WEIGHT.
- Julia Pan Mengyao
- Ming San Soong
China Internet: Online Gaming -- Shelter against mounting competition ...
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.
- Julia Pan Mengyao
- Ming San Soong
China Internet: Strategic revamp to foster re-accelerating growth and ...
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.
JD JD.COM INC. SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
02423 PINDUODUO PDD US
09961 KE HOLDINGS INC.
CTRIP.COM INTERNATIONAL
- Jin Yoon
NTES 1Q24 Results: Part of Gaming Rev Growth Could Be Pushed out to 2H...
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
- Julia Pan Mengyao
- Ming San Soong
NetEase (9999 HK): 1Q24: Results in line; 2Q24 game growth could be be...
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).
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ming San Soong
Greater China Daily: Friday, May 24, 2024
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...
- Julia Pan Mengyao
- Ming San Soong
China Internet: Expect growth momentum to reaccelerate in 2Q24 with re...
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.
- Julia Pan Mengyao
- Ming San Soong
China Internet: Rewarding shareholders in 2023; emerging strategic gro...
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.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3K1 KINGSOFT CORP. LTD.
00700 TENCENT HOLDINGS LTD.
PDD PINDUODUO INC. SPONSORED ADR CLASS A
03690 MEITUAN CLASS B
00780 TONGCHENG-ELONG HOLDINGS LIMITED
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
BEKE KE HOLDINGS INC. SPONSORED ADR CLASS A
09988 ALIBABA GROUP HOLDING LTD.
09999 NETEASE INC
09618 JD.COM INC. CLASS A
01024 KUAISHOU TECHNOLOGY CLASS B
09888 PINDUODUO PDD US
02423 BAIDU INC
09961 KE HOLDINGS INC.
CTRIP.COM INTERNATIONAL
NetEase Inc: 1 director
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...
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