Core Viewpoint - The report from CICC maintains the 2027 Non-GAAP net profit forecast for NetEase-S (09999), with target prices set at HKD 265 and USD 171, indicating an upside potential of 36% and 38% for Hong Kong and US stocks respectively [1] Group 1: Revenue and Growth - Quarterly deferred revenue shows high growth, with a net increase of CNY 1.04 billion in Q4 2025, better than market expectations, indicating potential revenue release in the future [2] - Revenue from games and related value-added services increased by 3% year-on-year in Q4 2025, driven by stable operations of long-standing IPs like "Fantasy Westward Journey" and contributions from new titles [2] - Youdao's revenue grew by 17%, reflecting the effective implementation of its AI-driven strategy, while Cloud Music's revenue increased steadily by 5% [2] Group 2: Profitability and Cost Management - The gross margin improved to 64.2% in Q4 2025, demonstrating the company's cost control capabilities [3] - The absolute amount of operating expenses met expectations, with the sales expense ratio rising to 14%, aligning with the overall marketing investment strategy [3] Group 3: Shareholder Returns - The dividend for Q4 2025 was USD 1.16 per ADS, with a dividend payout ratio of 83%, maintaining an annual dividend ratio of around 40% [4] - The company has extended its share repurchase program (up to USD 5 billion) until January 2029, having repurchased approximately USD 2 billion by the end of 2025 [4]

尽管网易四季度业绩疲软，低于市场预期，但摩根大通认为公司实际经营表现远好于账面数据所呈现的水平。 网易公布2025年第四季度财报，营收同比增长仅3%，净利润更是同比下降27%，双双低于彭博一致预期约4%和23%，这直接导致港股股价盘前 承压， 开盘下挫4%。 但摩根大通发表研报指出，《燕云十六声》等新游戏的强劲现金流水已反映在合同负债中，而非经常性损失掩盖了核心营业利润的出色表现。 此外随着《遗忘之海》和《无限大》等重磅新游上线，预计将推动2026-2027年游戏收入实现13%的年复合增长率。摩根大通维持对网易的"增 持"评级，目标价295港元（190美元），基于2026年预测市盈率13倍的估值具有吸引力。 真实现金流水远超账面收入 研报指出，市场对网易收入的失望主要源于Q4网游收入仅同比增长4%，且环比下降了7%。这很容易被解读为增长乏力。 例如《蛋仔派对》和《第五人格》的排名和流水均出现下滑，但这部分归因于暑假季节性因素消退。 净利润同比下降27%，比起彭博一致预期低了23%，这个数字确实吓人。但这并非网易的业务出了问题，而是因为投资账面浮亏。 摩根大通指出，Q4网易确认了高达22亿元人民币的权益投资及汇 ...

Core Insights - NetEase Youdao reported a net revenue of 5.91 billion RMB (845 million USD) for the fiscal year 2025, representing a year-on-year growth of 5.0% [1] - The company achieved an operating profit of 220 million RMB, a significant increase of 48.7% year-on-year, and recorded its first annual operating cash inflow of 55.2 million RMB [1] - Despite the overall revenue growth, the company faced a net loss of 47.1 million RMB (6.7 million USD), primarily due to a 25.7 million RMB (3.7 million USD) impairment loss from long-term investments [1] Revenue Breakdown - For the fiscal year 2025, Youdao's learning services net revenue was 2.6 billion RMB (376.2 million USD), down 4.2% year-on-year, mainly due to a decrease in tutoring service revenue [2] - The net revenue from smart devices was 739.6 million RMB (105.8 million USD), reflecting an 18.2% decline year-on-year, attributed to decreased demand [2] - Online marketing services net revenue increased by 28.5% year-on-year to 2.5 billion RMB (363 million USD), driven by increased demand from NetEase Group and overseas markets [2] Profitability Metrics - Youdao's gross profit for 2025 was 2.6 billion RMB (374.2 million USD), a decrease of 4.8% year-on-year, with a gross margin of 44.3% [2] - The gross margin for online marketing services dropped from 36.0% in 2024 to 27.1% in 2025, while the gross margin for learning services slightly decreased to 60.2% [2] - The gross margin for smart devices improved to 46.4% from 38.7% in 2024 [2] Strategic Outlook - CEO Zhou Feng emphasized the importance of AI upgrades, noting that the renewal rate for Youdao's services exceeded 75% [2] - The company plans to transition from an "EdTech" company to a "Learning and Advertising AI Application Service Provider" by 2026, focusing on both learning and advertising sectors [3] - Youdao aims to enhance user experience and drive sustainable long-term growth through the development of vertical large language models and AI-driven applications [3] Financial Position - As of December 31, 2025, Youdao's total cash, cash equivalents, and short-term investments amounted to 743.2 million RMB (106.3 million USD), an increase of 80.6 million RMB from the end of 2024 [3] - The company's contract liabilities, primarily from deferred revenue in learning services, totaled 847.7 million RMB (112 million USD) [3] - Youdao has secured financial support, including a short-term loan of 878 million RMB and a long-term loan of 132.1 million USD maturing on March 31, 2027, to support future business [3]

Core Insights - NetEase reported steady performance for the year 2025, with total revenue reaching 112.6 billion yuan and Q4 revenue at 27.5 billion yuan [1] - The innovation and other business segment generated annual revenue of 6.8 billion yuan, with Q4 revenue of 2 billion yuan, reflecting a quarter-on-quarter growth of 42.4% [1] Group 1: Business Performance - NetEase's innovative business, particularly NetEase Yanxuan, solidified its positioning in lifestyle consumer brands, launching 11 billion-level product series in pet food, home cleaning, and home goods [1] - The pet business achieved recognition as one of the "Top 3 Online Pet Brands in China," with dog food sales experiencing double-digit growth [2][3] - The home cleaning category received certification as a leading brand in odor removal, with three products ranking first in national sales [1] Group 2: Product Innovation - In 2025, NetEase Yanxuan applied for and obtained 52 patents, focusing on systematic R&D capabilities to enhance product quality [3][4] - The introduction of the "3D Fresh Steamed Emulsification Process" for pet food significantly improved nutrient absorption efficiency, addressing market pain points [4] - The fresh steamed pet food series became the fastest-growing product in the past six months, receiving media coverage and industry recognition [4] Group 3: Brand Strategy - NetEase Yanxuan implemented a successful youth-oriented strategy, collaborating with celebrities and popular IPs to engage younger consumers [6] - Sales surged to 32.4 million yuan within 24 hours of signing a new spokesperson, with limited edition products selling out in seconds [6] - The brand's visibility increased significantly, achieving over 580 million total exposures and ranking high on social media platforms [6] Group 4: Marketing Initiatives - During the Spring Festival, NetEase Yanxuan launched a campaign focused on pet care, collaborating with various partners to provide comprehensive solutions for pet owners [7] - The company introduced a New Year gift box for pets, which included various products and received positive feedback from young consumers [7]

Core Insights - NetEase reported Q4 revenue of RMB 27.5 billion and annual revenue of RMB 112.6 billion, highlighting its strategic focus on AI technology, overseas market expansion, and long-term game operations during the earnings call [1] AI Technology Application - NetEase aims to become the "most knowledgeable AI expert in gaming," with AI-native gameplay already implemented in several flagship products. The management noted that while AI lowers the entry barrier for game development, it raises the success threshold for top-tier products, shifting the core barrier from mere production capacity to integration capability [2][3] - The company plans to maintain high investment in vertical models, AI-native gameplay, and talent development, emphasizing that high-quality private data is more critical than computing power in vertical fields [2] Overseas Market Expansion - The success of "Yan Yun Shi Liu Sheng" in overseas markets validates NetEase's ability to express Chinese stories internationally. The game reached the second position on Steam's global sales chart and topped the iOS download charts in over 60 markets, with global users exceeding 80 million [4] - The management expressed confidence in cultivating high-quality creative talent in China, which has the largest pool of game development professionals globally [4] Long-term Game Operations - NetEase demonstrated strong long-term operational capabilities, with "Dream of Dreams" PC version achieving record quarterly revenue in its 23rd year. The successful launch of the "Chuang Wan" server provided new insights for long-term game operations [5] - The management outlined three key strategies for revitalizing long-standing games: restoring classic gameplay, restructuring the economic system while maintaining free trade, and optimizing the overall experience [5] Upcoming Products - Anticipated releases include "Forgotten Sea," expected to launch in Q3, and "Infinite," which has met testing expectations. Both products aim for global simultaneous release across multiple platforms [6] - The management highlighted the potential in the auto-chess genre, planning to create a unique game based on Chinese mythology, emphasizing strong narrative and aesthetic elements [7]

Core Insights - The company reported a total net revenue of 5.91 billion yuan for the year, reflecting a year-on-year growth of 5.0% [1] - Operating profit reached 220 million yuan, showing a significant increase of 48.7% year-on-year [1] - For the first time, the company achieved a full-year operating cash net inflow of 55.2 million yuan [1] Quarterly Summary - In Q4 2025, the net revenue was 1.56 billion yuan, representing a year-on-year growth of 16.8% [1] - The company has achieved profitability for six consecutive quarters [1] - The operating profit for Q4 was 60.2 million yuan, with an operating cash net inflow of 180 million yuan, marking a year-on-year increase of 16.4% [1]

证券研究报告 网易 (NTES US) 4Q 收入低于预期，游戏递延周期增长 2026 年 2 月 12 日│美国 互联网 网易 4Q25 总营收同比+3%至 275 亿元，低于 VA 一致预期（下同）5%， 主因游戏收入递延周期增加。递延收入超预期 21%，环比提升 10 亿元。经 调整归母净利润同比下降 27%至 71 亿元，低于预期 23%，主因投资损益影 响，拼多多等股票投资减值金额较大。我们预计网易 1H 流水有望边际改善： ①《燕云》全球累计用户达 8000 万，26 年海外全端流水有望达到 20-30 亿元；②《遗忘之海》管理层表示 3Q 有望上线，2 月测试反馈优秀，题材 和美术风格具备差异化优势，我们预计 12 个月流水有望达 25-50 亿元；③ 其他重点储备：《无限大》1 月封闭测试符合预期，中式妖鬼题材自走棋《妖 妖棋》1 月获版号，ARPG 端游《归唐》关注度较高。当前网易估值尚处低 位，我们看好 26 年收入和利润释放，重申"买入"评级。 《燕云》海外放量在即，《遗忘之海》打开 26 年增量空间 4Q 游戏和增值服务收入同增 3%至 220 亿元，其中游戏收入同增 4%至 213 ...

Market Overview - A-shares experienced fluctuations with the ChiNext index rising over 1%, driven by significant gains in computing power hardware stocks such as CPO and optical chips, with Tianfu Communication increasing by over 10% [1] - The Hong Kong market opened lower, with the Hang Seng Index dropping over 1% and tech stocks declining, including NetEase which fell by 5% [1][3] Stock Performance - The Shanghai Composite Index decreased by 0.10% to 4127.79, while the Shenzhen Component rose by 0.48% to 14228.82, and the ChiNext Index increased by 1.16% to 3322.67 [2] - The Hang Seng Index was reported at 27046.41, down by 0.81%, and the Hang Seng Tech Index fell by 1.51% to 5416.91 [4][3] Commodity Market - Domestic commodity futures mostly rose, with lithium carbonate increasing by over 3%, while platinum and palladium saw declines [2][5] - The lithium carbonate price rose by 3.83% to 149,660, and nickel increased by 2.75% to 140,930 [6] AI and Technology Sector - The AI application concept stocks continued to adjust collectively, while AI model stocks like Zhipu and MiniMax-WP saw gains [1] - Zhipu announced a price increase of 30% for its AI coding subscription plan, and it is set to launch a new AI model, GLM-5, aimed at complex programming tasks [7][9] CPO Sector - The CPO sector showed strong performance with stocks like Tianfu Communication, Juguang Technology, and Zhishang Technology rising over 10%, reaching historical highs [10][11] - Lumentum reported receiving several hundred million dollars in CPO-related orders, with expected revenue of approximately $50 million by Q4 2026 [11] Tungsten Sector - The tungsten sector remained strong, with stocks like Zhangyuan Tungsten hitting the daily limit, and prices for black tungsten concentrate and ammonium paratungstate rising significantly [12][13] Currency Market - The offshore RMB against the US dollar broke the 6.90 mark for the first time since April 2023 [14]

Core Viewpoint - Citigroup maintains a "Buy" rating for NetEase, raising its price target from $161 to $165, indicating positive investor sentiment towards the company's future performance [1][5]. Financial Performance - NetEase recently held its Q4 2025 earnings call, which provided insights into revenue growth, profit margins, and strategic developments, although the full transcript is not available [2][5]. - The current stock price of NetEase is $118.49, reflecting a decrease of 4.07% or $5.03 from the previous trading session [3][5]. - Over the past year, the stock reached a high of $159.55 and a low of $88.54, indicating significant volatility [3]. Market Position - NetEase has a market capitalization of approximately $75.63 billion, showcasing its significant presence in the tech industry [4][5]. - The trading volume for the day is 2,474,197 shares on the NASDAQ exchange, indicating active investor interest [4][5].

Core Insights - NetEase reported a total revenue of 112.6 billion yuan for the year 2025, representing a year-on-year growth of approximately 7% [1] - The Non-GAAP net profit attributable to shareholders for 2025 was 37.3 billion yuan, an increase of 11.3% year-on-year [1] - In Q4 2025, the company achieved a revenue of 27.5 billion yuan, a 3% increase year-on-year, but the net profit attributable to shareholders decreased to 6.2 billion yuan from 8.8 billion yuan in the same period last year [1] Gaming Business - The gaming and related value-added services generated a net income of 92.1 billion yuan for the year, accounting for 81.8% of total revenue [1] - Online gaming net income reached 89.6 billion yuan, marking an 11% year-on-year growth, driven by classic titles like "Fantasy Westward Journey" and new releases such as "The Legend of Yan Yun" and "Marvel Contest of Champions" [1] - "The Legend of Yan Yun" has surpassed 80 million global users, and Blizzard's games returning to the Chinese market have set new annual revenue records [1] Other Business Segments - NetEase Youdao achieved a revenue of 5.9 billion yuan for the year, marking its first year of positive operating profit and cash flow [1] - NetEase Cloud Music reported a revenue of 7.8 billion yuan, slightly down from 8 billion yuan in 2024 [1] - The innovation and other business segment generated a revenue of 6.8 billion yuan [1] - The company's R&D investment reached 17.7 billion yuan, exceeding 10 billion yuan for six consecutive years [1] Financial Performance - For the year 2025, NetEase's operating profit was 35.8 billion yuan, reflecting a year-on-year increase of 21%, with a gross margin of 64.29% [2] - As of the end of 2025, the company had a net cash balance of 163.5 billion yuan and a net cash inflow from operating activities of 50.7 billion yuan [2] - The board announced an extension of the $5 billion stock repurchase plan until 2029, with approximately $2 billion repurchased by the end of 2025 [2] Market Challenges - NetEase is currently facing valuation pressure, with concerns regarding slowing growth in gaming revenue and high base profit margins for Q4 2025 and Q1 2026 [2] - The CEO emphasized that AI has become a core capability in their R&D and operations, systematically applied in game development and gameplay innovation [2]