Summary of NetEase, Inc. Conference Call Company Overview - **Company**: NetEase, Inc (NTES.O) - **Industry**: Internet Entertainment - **Market Cap**: US$87.283 billion - **Current Share Price**: US$136.12 - **Price Target**: Raised from US$145.00 to US$151.00, indicating an 11% upside potential [5][21] Key Financial Metrics - **2Q25 Revenue Growth**: Expected to be 12% YoY for game revenue and 20% for non-GAAP profit [2][8] - **Adjusted Net Profit**: Projected to grow 20% YoY to RMB 9.4 billion [8] - **EPS Estimates**: Slight increases of 1-2% for 2025-2027 [3][20] - **Revenue Projections**: - 2025: RMB 114,060 million - 2026: RMB 118,798 million - 2027: RMB 123,673 million [5][24] Business Developments - **Game Titles Performance**: - **Marvel Rival S3**: Popularity rebound, ranked 2 on Steam in July [7] - **Once Human**: Strong PC gross ranking post mobile launch, estimated annual revenue contribution of RMB 800 million to 1 billion [7] - **New Titles**: Five new games scheduled for summer 2025, expected to contribute marginally in 3Q [7] Market Positioning - **Competitive Landscape**: NetEase is well-positioned amid fund inflows from the food delivery segment, with positive business developments justifying its outperformance [1] - **Marketing Strategy**: Focus on long-term marketing expense ratio rather than short-term savings [2] Valuation and Risk Assessment - **Valuation Method**: Sum of the parts (SOTP) with a target P/E of 15x for the games business [30] - **Risk Factors**: - Shorter-than-expected life cycle of games - Weaker-than-expected margins due to loss-making businesses [41] Investment Thesis - **Overweight Rating**: Reiterated with a focus on market share gains through development capabilities and global expansion [31] - **Margin Improvement**: Expected from a favorable revenue mix and better cost control, leading to operating profit margin expansion towards 34% [31] Additional Insights - **Revenue Growth Drivers**: Anticipated acceleration in game revenue driven by localized content and new titles [32] - **Consensus Rating Distribution**: 90% Overweight, 10% Equal-weight [34] Conclusion - **Outlook**: Positive growth trajectory with a focus on game revenue and margin expansion, supported by a strong pipeline of new titles and strategic market positioning [43]

Group 1 - The South Fund's South Hong Kong Digital Economy Mixed Fund (QDII) A has a net asset of 0.49 billion yuan as of June 30, 2025, reflecting a 2.24% increase from the previous period [1] - The fund manager, Xiong Xiaoya, has a master's degree in finance from the University of Illinois Urbana-Champaign and has been with South Fund since July 2015, holding various positions [1] - The fund's recent performance shows a 3-month return of 18.16%, a 1-year return of 49.93%, and a cumulative return of 68.16% since inception [2] Group 2 - The fund's top ten stock holdings include Tencent Holdings, Pop Mart, and Alibaba-W, with a combined holding percentage of 51.53% [2] - The South Fund Management Co., Ltd. was established in March 1998 and is based in Shenzhen, with a registered capital of 361.72 million yuan [2]

Core Insights - Shanghai's Xuhui District is launching a "Metaverse Street" to promote new "ACG (Anime, Comic, Game) consumption" through collaboration with local gaming companies [1][2] - The gaming industry in Xuhui is significant, with over 70 large-scale gaming enterprises and projected total revenue exceeding 70 billion RMB in 2024, accounting for over 40% of Shanghai's gaming revenue [1] - The "Neo World" Metaverse Street spans 1.9 kilometers, featuring commercial entities alongside major gaming company headquarters, aiming to enhance the value of gaming IPs by integrating online and offline channels [1] Industry Developments - The "Metaverse Summer Carnival" event from July 18 to August 17 will feature five major IP theme days, special performances, and pop-up stores, combining cultural experiences with commercial consumption [2] - The initiative aims to create a cross-industry celebration that fosters community interaction and enhances consumer engagement [2] - Major gaming IPs are actively participating in the Metaverse initiative, indicating a trend of direct involvement from top gaming companies in the physical space [3]

Core Viewpoint - The report highlights the performance and investment strategy of the ICBC Credit Suisse China Opportunity Global Allocation Equity Fund for the second quarter of 2025, emphasizing its focus on benefiting from China's economic growth through diversified global investments. Fund Overview - Fund Name: ICBC Global Equity (QDII) - Fund Code: 486001 - Fund Type: Contractual open-end fund - Total Fund Shares at Period End: 309,974,669.75 shares - Investment Objective: To provide domestic Chinese investors with opportunities to invest in companies benefiting from China's economic growth globally, while controlling portfolio risk and pursuing long-term asset appreciation [2][3]. Financial Performance and Net Value - Net Value Growth Rate for the past three months: 5.42% - Benchmark Return Rate for the past three months: 7.48% - Net Value Growth Rate for the past six months: 11.31% - Benchmark Return Rate for the past six months: 12.56% - Net Value Growth Rate for the past year: 23.44% - Benchmark Return Rate for the past year: 24.49% [5][16]. Investment Strategy - The fund primarily invests in Chinese companies listed on overseas markets such as Hong Kong, as well as global companies benefiting from China's economic growth. - Key themes for stock selection include domestic consumption, import demand, and export advantages related to China's economy [2][12]. Portfolio Composition - Total Assets: 421,616,987.40 RMB - Major Holdings: - Ordinary Shares: 375,494,458.82 RMB (81.46%) - Depositary Receipts: 46,122,528.58 RMB (10.01%) - Geographic Allocation: - United States: 193,532,734.96 RMB (42.25%) - Hong Kong: 138,554,459.58 RMB (30.25%) [17][18]. Sector Allocation - The fund's sector allocation includes: - Consumer Staples: 4.83% - Financials: 20.81% - Health Care: 6.56% - Industrials: 5.63% - Communication Services: 92.04% of total assets [18][21]. Management and Advisory - Fund Manager: ICBC Credit Suisse Fund Management Co., Ltd. - Custodian: Bank of China Co., Ltd. - Overseas Investment Advisor: Wellington Management Company, LLP [2][9].

Group 1 - Nvidia's CEO Jensen Huang emphasized the importance of the gaming industry in the context of AI applications, highlighting 11 Chinese companies involved in game development during his visit to China [1][2] - The gaming industry is transitioning from mere entertainment to a leading force in AI applications, as exemplified by the game "Black Myth: Wukong," which utilizes significant AI technology [2][4] - The Chinese gaming industry is experiencing a spiral growth, with market revenue projected to reach 325.8 billion yuan in 2024, while user growth is slowing down amid increasing global competition [4][7] Group 2 - The integration of AI in gaming is supported by recent policies from major cities like Beijing and Shanghai, which aim to enhance the gaming sector's embrace of AI as a new productive force [7][10] - Major gaming companies are investing heavily in AI technology, with Tencent integrating AI into its popular game "Peacekeeper Elite" and NetEase introducing AI-driven NPCs in "Nirvana in Fire" [7][10] - The gaming industry recognizes AI as a foundational infrastructure for future competitiveness, with companies that effectively integrate AI likely to gain a competitive edge [8][10] Group 3 - The Chinese gaming industry has undergone several transformations, from importing games to developing them independently and expanding globally, with significant milestones like the release of "Black Myth: Wukong" [9][10] - Companies like Tencent are focusing on enhancing production efficiency through AI, with initiatives like the "VISVISE" solution aimed at improving game development processes [10][12] - AI is being utilized to automate repetitive tasks in game development, allowing creative teams to focus on core design and business model refinement [12][13] Group 4 - The emergence of AI-native games, such as "Whispers from the Star," showcases how AI can fundamentally reshape game creation and player experience through dynamic storytelling [13][15] - The gaming industry is on a dual path of enhancing production efficiency and innovating player experiences, both of which are crucial for the industry's evolution [16][17] - The gaming sector is positioned as a testing ground for AI technologies, with companies like Anuttacon aiming to leverage gaming as a medium for technological exploration [17][20] Group 5 - The ongoing AI revolution in gaming reflects a broader shift in the tech industry, with major companies increasing their AI investments to reshape market dynamics [20][21] - The journey of Nvidia from a low-value tech company to a leader in the AI space serves as a model for Chinese tech firms aiming to redefine their competitive edge in the AI era [21]

Group 1 - The top 50 Chinese technology and internet companies by market capitalization as of July 21, 2025, are listed, with TSMC leading at $124.684 billion [3][4]. - Tencent Holdings ranks second with a market cap of $60.3704 billion, followed by Alibaba at $28.679 billion [3][4]. - Xiaomi Group and Pinduoduo hold the fourth and fifth positions, with market caps of $18.9457 billion and $15.4741 billion, respectively [3][4]. Group 2 - Meituan and NetEase are ranked sixth and seventh, with market caps of $10.3371 billion and $8.6191 billion [4]. - JD.com, SMIC, and Kuaishou follow, with market caps of $4.8896 billion, $4.8429 billion, and $3.948 billion, respectively [4][5]. - Li Auto and Tencent Music are also in the top 15, with market caps of $3.404 billion and $3.3193 billion [5]. Group 3 - Baidu, Beike, and Tonghuashun are ranked 13th, 14th, and 15th, with market caps of $3.0187 billion, $2.2374 billion, and $2.0827 billion, respectively [5][6]. - The list includes various companies from different sectors, indicating a diverse representation within the technology and internet industry [6]. - The market capitalization figures are calculated based on the current exchange rate of USD to HKD [6].

数据显示，该基金近3个月收益率13.98%，近一年收益率52.72%，成立以来收益率为53.53%。其股票持 仓前十分别为：腾讯控股、美团-W、小米集团-W、中芯国际、德康农牧、赤子城科技、理想汽车-W、 阿里巴巴-W、快手-W、网易-S，前十持仓占比合计52.65%。 截至2025年6月30日，中欧基金旗下中欧港股数字经济混合发起(QDII)C（015885）期末净资产1.30亿 元，比上期减少12.45%，该基金经理为FANG SHENSHEN。 简历显示，FANG SHENSHEN女士:澳大利亚国籍,本科、学士。历任高盛私人财富管理部税务分析 师,Cooper Investors助理基金会计师、交易员、新兴市场组研究员,曾任中欧基金管理有限公司研究员、 高级研究员,现任中欧基金管理有限公司的基金经理。2024年05月31日起担任中欧港股数字经济混合型 发起式证券投资基金(QDII)基金经理。2024年7月1日起任中欧中证港股通央企红利指数发起式证券投资 基金(QDII)的基金经理。2025年01月14日起任中欧恒生科技指数发起式证券投资基金(QDII)基金经理。 近期份额规模变动情况： 日期期间申购（亿 ...

Group 1 - The Nasdaq China Golden Dragon Index increased by 0.6% [1] - Popular Chinese concept stocks mostly rose, with JD.com up over 3% [1] - Alibaba, Bilibili, and NetEase each rose over 2%, while Li Auto increased by over 1% [1]

Core Viewpoint - The approval of domestic and imported games in China has reached a record high in June 2025, indicating a recovery in the gaming industry with a total of 158 new games approved, surpassing previous months' records [3][5]. Group 1: Game Approval Statistics - In June 2025, a total of 158 games received approval, including 147 domestic and 11 imported games [1][3]. - For the first half of 2025, 812 games were approved, the highest in five years, with 757 domestic and 55 imported games [5]. - The average monthly approval rate for games in the first half of 2025 was 135, an increase from 115 in the same period last year [5]. Group 2: Major Game Releases and Issues - Tencent received 7 game approvals in the first half of 2025, including 4 imported and 3 domestic games [5][8]. - Notable games include "Honor of Kings World," which has high expectations with over 860,000 reservations and a score of 8.1 on Taptap [6]. - "Star Resonance," another Tencent game, faced significant issues at launch, including server instability and negative reviews, leading to a score drop to 4.0 on Taptap [6]. Group 3: Competitor Activities - NetEase secured 6 game approvals, including 3 imported and 3 domestic titles, with "The Last Home of Ice and Fire" receiving mixed reviews [10][12]. - Kyeing Network emerged as a significant player, holding over 10 game approvals and signing licensing agreements for popular IPs [12][14]. - Other companies like Perfect World and 37 Interactive Entertainment are also in the process of developing multiple games, with "Eternal Ring" generating high anticipation [15]. Group 4: Market Performance - The gaming industry in China is showing signs of recovery, with sales revenue exceeding 1.4 trillion yuan in the first five months of 2025, a year-on-year increase of 16.99% [17]. - Stock prices of gaming companies have generally risen, with 21 out of 26 companies seeing increases, and some experiencing significant gains of over 80% [17][18].

| 42 | | 三七互娱 | 51.18 | | | --- | --- | --- | --- | --- | | 43 | | 新大陆 | 46.33 | | | 44 | | 岩山科技 | 44.76 | | | 45 | | 中国民航信息网络 | 44.44 | | | 46 | INESA | 云赛智联 | 42.99 | | | 47 | | 阅文集团 | 42.47 | 3 1 | | 48 | | 东华软件 | 42.26 | -1 | | 49 | | 金山云 | 41.49 | -1 | | 50 | | 银之杰 | 41.44 | -1 + | | 8 | | 中芯国际 | 474.12 | 11 | | --- | --- | --- | --- | --- | | 9 | | 京东 | 471.23 | 1 t | | 10 | | 快手-W | 383.82 | 1 t | | II | | 腾讯音乐 | 346.34 | 1 t | | 12 | | 理想汽车 | 335.69 | 1 t | | 13 | Bal & En | 百度 | 300.83 | 11 | | 14 ...