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

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China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>NetEase’s 4Q22 revenue was in-line with cons., while its non-GAAP net income missed cons. by (8%) because of a one-off, non-renewal contract with Blizzard.</li>
<li>We still see NetEase as a BUY because of &lt;Eggy Party&gt;’s overseas publishing and &lt;Justice Mobile&gt;, which we estimate will contribute about 1-2bn/3-4bn RMB for annual gross billing, respectively. </li>
<li>We maintain BUY and TP US$ 87, which implies 16.0X PE in 2023.</li>
</ul>


NetEase’s 4Q22 revenue was in-line with cons., while its non-GAAP net income missed cons. by (8%) because of a one-off, non-renewal contract with Blizzard.
We still see NetEase as a BUY because of &lt;Eggy Party&gt;’s overseas publishing and &lt;Justice Mobile&gt;, which we estimate will contribute about 1-2bn/3-4bn RMB for annual gross billing, respectively. 
We maintain BUY and TP US$ 87, which implies 16.0X PE in 2023.


[NetEase (NTES US) Earnings Review]: Eggy Party and Justice Mobile Are Two Catalysts