Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>NetEase reported C4Q23 top line, GAAP operating profit and GAAP net income (4.8%), (16%) and (9.0%) vs. our estimates, and (3.6%), (12%) and (6.8%) vs. consensus， mainly due to..</li>
<li>The positive, however, is the acceleration of launch of &lt;Naraka Mobile&gt; by 1-2 quarters. Our estimate of the gross billing remains the same;</li>
<li>We remain optimistic about the upcoming pipeline, and we raise our TP to US$122. Our new TP implies 15.4X PE, which is 12% above current price.</li>
</ul>


NetEase reported C4Q23 top line, GAAP operating profit and GAAP net income (4.8%), (16%) and (9.0%) vs. our estimates, and (3.6%), (12%) and (6.8%) vs. consensus， mainly due to..
The positive, however, is the acceleration of launch of &lt;Naraka Mobile&gt; by 1-2 quarters. Our estimate of the gross billing remains the same;
We remain optimistic about the upcoming pipeline, and we raise our TP to US$122. Our new TP implies 15.4X PE, which is 12% above current price.


[NetEase, Inc. (NTES US, BUY, TP US$122) TP Change]: Strong Games Pipelines Offering More Potentials

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>NetEase reported 4Q23 financial results on 29 Feb: total revenue grew by 7% YoY to RMB27.1bn, below our/consensus estimate of RMB28.8/28.2bn.</li><li>NonGAAP net income was up by 53% YoY to RMB7.4bn, but 7% shy of consensus estimate, mainly due to the higher-than-expected marketing expenses (+24% YoY).</li><li>Full-year total revenue/non-GAAP net income grew by 7%/43% YoY in FY23 respectively. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NetEase reported 4Q23 financial results on 29 Feb: total revenue grew by 7% YoY to RMB27.1bn, below our/consensus estimate of RMB28.8/28.2bn.NonGAAP net income was up by 53% YoY to RMB7.4bn, but 7% shy of consensus estimate, mainly due to the higher-than-expected marketing expenses (+24% YoY).Full-year total revenue/non-GAAP net income grew by 7%/43% YoY in FY23 respectively. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Netease (NTES US) - Solid Pipeline to Fuel FY24 Revenue Growth

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to be accelerating, to the same level as pre-tightening.</li>
<li>Netease gets one game approved but we don't see that the acceleration of game approval benefits big names proportionally.</li>
</ul>


China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
Netease gets one game approved but we don't see that the acceleration of game approval benefits big names proportionally.


Tencent/Netease: Approval Rotation to Netease in Feb

<ul>
<li>We expect NetEase to report C4Q23 revenue, GAAP op. profit and GAAP net income 4.9%, 5.7% and 8.5% vs. consensus.</li>
<li>The robust topline growth was mainly contributed by revenue recognition of &lt;Justice Mobile&gt; in the peak summer season. </li>
<li>The grossing of legacy titles like &lt;FWWJ&gt; is also growing steadily due to the low-price strategy. We raise our TP to US$118 to reflect the rich and diversified pipeline...</li>
</ul>


We expect NetEase to report C4Q23 revenue, GAAP op. profit and GAAP net income 4.9%, 5.7% and 8.5% vs. consensus.
The robust topline growth was mainly contributed by revenue recognition of &lt;Justice Mobile&gt; in the peak summer season. 
The grossing of legacy titles like &lt;FWWJ&gt; is also growing steadily due to the low-price strategy. We raise our TP to US$118 to reflect the rich and diversified pipeline...


[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.</li>
<li>In this insight, we take a look at our updated flow expectations.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
In this insight, we take a look at our updated flow expectations.


Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

[NetEase, Inc. (NTES US, BUY, TP US$122) TP Change]: Strong Games Pipelines Offering More Potentials

NetEase reports mixed Q4 results, but positive outlook with accelerated launch of Naraka Mobile and raised price target to US$122.

Blue Lotus Research Institute

Netease (NTES US) - Solid Pipeline to Fuel FY24 Revenue Growth

NetEase reported 4Q23 financial results on 29 Feb: total revenue grew by 7% YoY to RMB27.1bn, below our/consensus estimate of RMB28.8/28.2bn.

CMB International

Tencent/Netease: Approval Rotation to Netease in Feb

China's game approval process is picking up pace, with more games approved in February compared to monthly average last year, we also observed...

Ke Yan, CFA, FRM

[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins

NetEase's strong revenue growth in C4Q23 driven by <em>Justice Mobile</em> and low-price strategy for legacy titles, leading to increased target...

Blue Lotus Research Institute

Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected

We currently estimate total one-way flow to be US$1.2bn during the December 2024 index rebal event. The final caps will be decided based on 3rd...

Janaghan Jeyakumar, CFA

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[NetEase, Inc. (NTES US, BUY, TP US$122) TP Change]: Strong Games Pipelines Offering More Potentials

​NetEase reports mixed Q4 results, but positive outlook with accelerated launch of Naraka Mobile and raised price target to US$122.

Blue Lotus Research Institute

Netease (NTES US) - Solid Pipeline to Fuel FY24 Revenue Growth

NetEase reported 4Q23 financial results on 29 Feb: total revenue grew by 7% YoY to RMB27.1bn, below our/consensus estimate of RMB28.8/28.2bn.

CMB International

Tencent/Netease: Approval Rotation to Netease in Feb

​China's game approval process is picking up pace, with more games approved in February compared to monthly average last year, we also observed...

Ke Yan, CFA, FRM

[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins

​NetEase's strong revenue growth in C4Q23 driven by <em>Justice Mobile</em> and low-price strategy for legacy titles, leading to increased target...

Blue Lotus Research Institute

Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected

We currently estimate total one-way flow to be US$1.2bn during the December 2024 index rebal event. The final caps will be decided based on 3rd...

Janaghan Jeyakumar, CFA

NetEase reports mixed Q4 results, but positive outlook with accelerated launch of Naraka Mobile and raised price target to US$122.

China's game approval process is picking up pace, with more games approved in February compared to monthly average last year, we also observed...

NetEase's strong revenue growth in C4Q23 driven by <em>Justice Mobile</em> and low-price strategy for legacy titles, leading to increased target...