Core Viewpoint - NetEase (NTES.US) stock is experiencing strong performance driven by the success of evergreen games like "Naraka: Bladepoint" and anticipated acceleration in sales growth for Q3 [1] Group 1: Stock Performance - NetEase shares rose nearly 1% pre-market, reaching $156.25, and hit a new high after opening [1] - Goldman Sachs raised NetEase's target price from $145 to $161, maintaining a "Buy" rating [1] Group 2: Game Performance and Future Outlook - The strong stock performance is attributed to the exceeding expectations of evergreen games and the robust performance of traditional games [1] - Looking ahead to 2026, two upcoming major titles, "Sea of Remnants" and "Ananta," along with new successes in overseas markets, are expected to create a favorable product cycle [1]

Investment Rating - The report maintains a "Buy" rating for several companies in the media sector, including Giant Network, Kaiying Network, and others [4][9][6]. Core Insights - The media industry has shown strong performance with a weekly increase of 4.27%, ranking 4th among industries, while the Shanghai Composite Index rose by 1.52% [12][20]. - The gaming market remains robust, with significant revenue growth from major players like Tencent and Point Interactive, and the upcoming National Day film releases are anticipated to boost box office performance [3][4][41]. Market Performance - The media industry (Shenwan) increased by 4.27% from September 6 to September 12, 2025, outperforming the Shanghai Composite Index, which rose by 1.52% [12]. - The gaming II sector saw a rise of 6.61%, while the film industry also experienced a notable increase of 6.58% during the same period [15][12]. Key Data and Dynamics AI Applications - In August, the top five AI products by web traffic included ChatGPT and New Bing, with Deepseek leading domestic traffic at 316 million visits, despite a month-over-month decline of 8.52% [24][25]. - The domestic AI search engine Nano AI ranked second with 307 million visits, also showing a decline of 7.52% [24][25]. Gaming Data - In August, Tencent, Point Interactive, and NetEase were the top three mobile game publishers globally, with total revenues of $2.04 billion, accounting for 35.1% of the top 100 publishers' income [29][30]. - Giant Network's revenue surged by 72% due to the success of "Supernatural Action Group," which entered the top ten for global mobile game revenue [29][30]. Film Data - The total box office for the week of September 6-12 was 358 million yuan, with "Chasing the Wind" leading at 120 million yuan [41]. - Nine films have been scheduled for release during the National Day holiday, indicating a strong upcoming box office potential [41][42]. Investment Recommendations - The report highlights a positive outlook on themes such as AI applications and cultural exports, with a focus on sub-sectors like gaming, IP, short dramas, and publishing [4]. - Specific companies recommended for investment include Giant Network, Kaiying Network, and Perfect World, among others [4][9].

Group 1 - NetEase issued a statement addressing recent rumors regarding its former COO's new venture and related disputes, clarifying that the individual left the company in 2011 and that any subsequent activities are unrelated to NetEase [2] - The statement emphasized that the controversies surrounding the individual do not represent NetEase's position [2] Group 2 - Information shows that the former COO, Zhan Zhonghui, joined NetEase in 1999 and served as COO until his departure in 2011, after which he founded Guangzhou Jianyue [5] - In September 2017, after Guangzhou Jianyue was integrated into Alibaba's entertainment division, Zhan Zhonghui took charge of Alibaba's interactive entertainment division [5]

Group 1 - The core viewpoint of the report is that AI, macroeconomic recovery, competitive landscape, regulatory environment, shareholder return execution, and Sino-US tensions will be the six key factors affecting the financial performance and valuation of Chinese internet-listed companies in the next 6 to 12 months [1] - The ranking of sub-industries within the mainland internet sector is as follows: cloud computing > online music, online gaming, and online advertising (tied) > e-commerce > others [1] - The long-term preferred stocks identified are Tencent, Alibaba, NetEase, and Tencent Music, while Bilibili and Baidu are favored for the short term [1]

Industry Overview - The gaming industry is defined as an ecosystem economy centered around "content + technology + users," encompassing activities such as development, marketing, sales, and after-sales of video games [1] - Key participants include game developers, operators, distributors, and players, operating across various platforms like PC, mobile devices, and consoles [1] Industry Chain Analysis - The upstream of the gaming industry includes IP owners and game developers, while the midstream consists of comprehensive game publishers, and the downstream involves terminal distribution and marketing channels [2] Industry Development History - The development of China's gaming industry can be divided into several key stages: 1. **Emergence and Initial Phase (1980s-2000s)**: Introduction of arcade games and home consoles [5] 2. **Exploration and Growth Phase (2003-2015)**: Rise of domestic online games supported by national policies [5] 3. **Full Explosion and Mobile Transformation (2015-2020)**: Transition to mobile gaming with the growth of 4G users [6] 4. **High-Quality Development and Adjustment Phase (2021-Present)**: Shift towards regulated growth and overseas markets [6][7] Current Industry Status - The gaming market in China is rebounding, with a projected market size of 325.78 billion yuan in 2024, reflecting a year-on-year growth of 7.53% [9] - After a brief decline from 2020 to 2022, the market is expected to grow at over 7% annually, reaching 168 billion yuan by mid-2025 [9] - Overseas revenue for Chinese gaming is projected to reach 18.557 billion USD in 2024, marking a historical high with a year-on-year increase of 13.39% [10] Market Segmentation - **Mobile Gaming**: Expected revenue of 238.217 billion yuan in 2024, with a growth rate of 5.01% [14] - **Web Games**: Revenue is declining, with a projected 2.203 billion yuan in 2025, down 5.87% [19] - **Client Games**: Stable growth with a projected revenue of 35.403 billion yuan in 2025, up 4.86% [20] - **Console Games**: Rapid growth with a projected revenue of 1.034 billion yuan in 2025, up 29.78% [23] Competitive Landscape - The majority of listed gaming companies are concentrated in developed regions like Guangdong and Beijing, with Guangdong having the highest number at 27 [24] - The market is fragmented, but major players like Tencent and NetEase dominate, accounting for 60% of the market capitalization of listed gaming companies [27] Future Development Trends - The gaming industry in China is expected to continue growing, with a market size projected to exceed 360 billion yuan by 2025 and potentially reach 500 billion yuan by 2030 [33] - There is a trend towards deeper integration of traditional culture into gaming products, supported by favorable policies [34]

2025中国大企业创新100强排名前10位的企业分别是：华为投资控股有限公司、中兴通讯股份有限公 司、携程集团有限公司、网易股份有限公司、蚂蚁科技集团股份有限公司、国家电网有限公司、正大天 晴药业集团股份有限公司、中国信息通信科技集团有限公司、美的集团股份有限公司、京东方科技集团 股份有限公司。华为投资控股有限公司连续五年蝉联榜首。 2025中国大企业创新100强是在2025中国企业500强、2025中国制造业企业500强、2025中国服务业企业 500强的基础上，按照入围门槛为发明专利数100件以上、研发强度0.6%以上、营业收入200亿元以上的 标准进行筛选，同时依据企业申报的研发费用、研发投入强度、拥有发明专利数、拥有专利数、收入利 润率等数据，利用功效系数法计算得到各指标评价值，加权得到各企业综合评价得分值，最后按分值高 低排序产生。 研发费用保持万亿水平，创新质量继续提升。2025创新100强共投入研发费用1.03万亿元，与上年基本 持平；平均研发强度由5.27%上升为5.61%，增加了0.34个百分点；拥有有效专利数、有效发明专利数分 别为172.42万件、89.75万件，发明专利占全部专利的52 ...

Core Viewpoint - Goldman Sachs has raised its earnings per share forecast for NetEase-S (09999) by 2-3% for 2025-2027, citing stronger game revenue growth and higher profit margins from the "Fantasy Westward Journey" series [1] Group 1: Financial Performance - The target price for NetEase has been increased to HKD 252 [1] - NetEase's stock price has risen by 74% year-to-date and increased by 19% following the release of its Q2 earnings, outperforming the Chinese internet sector [1] Group 2: Future Outlook - Goldman Sachs anticipates that NetEase will deliver solid performance in the second half of 2025, driven by strong results from classic games [1] - For 2026, the company is expected to benefit from two upcoming potential blockbuster games and success in overseas markets, which may lead to a revaluation of its stock price [1]

Core Viewpoint - Goldman Sachs has raised its earnings per share forecast for NetEase-S (09999) by 2-3% for the years 2025-2027, citing stronger game revenue growth and higher profit margins from the "Fantasy Westward Journey" series [1] Group 1: Financial Performance - The target price for NetEase has been increased to HKD 252 [1] - NetEase's stock price has risen by 74% year-to-date and increased by 19% following the release of its Q2 earnings, outperforming the Chinese internet sector [1] Group 2: Future Outlook - Goldman Sachs anticipates that NetEase will deliver solid performance in the second half of 2025, driven by strong results from its classic games [1] - For 2026, the company is expected to benefit from two upcoming potential blockbuster games and success in overseas markets, which may lead to a revaluation of its stock price [1]

Summary of NetEase Inc. (NTES) Conference Call Company Overview - **Company**: NetEase Inc. (NTES) - **Market Cap**: $97.0 billion - **Enterprise Value**: $77.6 billion - **Industry**: Gaming, Entertainment & Healthcare Tech in China Key Points and Arguments 1. **Stock Performance**: NetEase's share price has increased by 74% year-to-date and 19% following the 2Q25 results, outperforming the broader Chinese Internet sector [1][12] 2. **Evergreen Titles**: The success of legacy games, particularly the Fantasy Westward Journey (FWJ), has driven better-than-expected sales growth, with FWJ's PC version reaching a record 3.15 million concurrent players, a 15% increase from three months ago [2][16] 3. **Market Strategy**: The removal of prepaid game cards and the introduction of a simplified gameplay version have lowered entry barriers, attracting new and returning players, especially among younger demographics [2][16] 4. **Future Growth**: Anticipated strong results in 2H25 from legacy titles and a favorable product cycle in 2026 with potential blockbusters like Sea of Remnants and Ananta [1][18] 5. **Revenue Forecasts**: Revenue projections for 2025E have been raised to RMB 115,857.2 million, reflecting a 10% year-over-year growth [4][30] 6. **Earnings Per Share (EPS)**: EPS estimates for 2025E have been increased by 2-3% due to stronger game revenue growth and improved gross profit margins from higher-margin titles [18][30] 7. **Valuation Metrics**: Current valuation stands at 16-17X 12-month forward P/E, with target prices raised to $161 for NTES and HK$252 for 9999.HK [1][18] 8. **Marketing Efforts**: Proactive marketing strategies have contributed to the resurgence of Eggy Party, which is expected to show solid year-over-year growth [3][16] Additional Important Insights 1. **User Engagement**: The introduction of KOLs (Key Opinion Leaders) livestreaming FWJ has expanded its audience, particularly among younger players [2][16] 2. **Deferred Revenue**: Deferred revenue (excluding Youdao) is expected to maintain a 20% year-over-year growth level for 2H25 [24] 3. **Competitive Position**: NetEase's defensive business model has allowed it to extend the Evergreen game franchise effectively, positioning it well for future growth despite a lack of new titles [16][18] 4. **Upcoming Events**: Key upcoming events include Ananta's update at the Tokyo Game Show and the first round of testing for Sea of Remnants, which is expected to launch in 2026 [17][18] Financial Highlights - **EBITDA Growth**: Projected EBITDA growth of 23.1% for 2025E [11][30] - **Dividend Payout**: Dividend payout ratio is expected to remain around 36.6% for 2025E [14][30] - **Cash Flow**: Anticipated free cash flow of RMB 41,926.7 million for 2025E [15][30] This summary encapsulates the key insights and projections regarding NetEase Inc. as discussed in the conference call, highlighting its strong market position, growth potential, and strategic initiatives.

Core Insights - The article highlights the top short-selling stocks in the market, indicating significant investor sentiment and potential market movements [1][2][3] Short Selling Ratios - The top three stocks with the highest short-selling ratios are New World Development-R (80016) and Li Ning-R (82331) at 100.00%, followed by AIA Group-R (81299) at 92.90% [1][2] - Other notable stocks include BYD Company-R (81211) at 91.45% and China National Offshore Oil Corporation-R (80883) at 71.40% [2] Short Selling Amounts - Alibaba-SW (09988) leads in short-selling amount with 5.602 billion, followed by Tencent Holdings (00700) at 2.725 billion and Baidu Group-SW (09888) at 2.062 billion [3] - Other significant amounts include Meituan-W (03690) at 1.088 billion and Pop Mart International (09992) at 879 million [3] Deviation Values - Li Ning-R (82331) has the highest deviation value at 35.57%, followed by AIA Group-R (81299) at 28.24% and China National Offshore Oil Corporation-R (80883) at 27.47% [1][3] - Other notable deviation values include BYD Company-R (81211) at 25.22% and New World Development-R (80016) at 24.06% [3]