Core Insights - The "revenue share dispute" between Apple and Tencent has reached a resolution, with Apple agreeing to a 15% revenue share for in-app purchases in Tencent's mini-games, significantly lower than the standard 30% [2] - This new agreement signals a positive shift for game developers, who have long struggled with high revenue share percentages imposed by both iOS and Android platforms [2][8] - The change in revenue share is expected to lead to a more optimized and restructured industry ecosystem, providing game companies with greater autonomy in revenue distribution [2][8] Group 1: Apple and Tencent Agreement - Apple will implement a 15% revenue share for Tencent's in-app purchases starting in 2024, down from the usual 30% [2] - This agreement is seen as a significant concession by Apple and may influence Android channels to follow suit in reducing their revenue share percentages [8] - The new revenue share model is anticipated to enhance the competitive environment for game developers, allowing for fairer competition [8] Group 2: Industry Context and Reactions - The high revenue share model has historically placed a heavy burden on game developers, with Android channels often charging up to 50% [2][5] - Companies like NetEase have begun to push back against these high fees, with CEO Ding Lei expressing dissatisfaction with the 50% share in the Chinese Android ecosystem [5][6] - The emergence of alternative distribution methods, such as direct downloads and partnerships with third-party platforms, is becoming more common among leading game developers [6][9] Group 3: Future Implications for Channels - The traditional high revenue share model is becoming increasingly outdated, as game developers gain more negotiating power [9][11] - Mobile channel providers must reassess their strategies, moving from a reliance on traffic to offering unique services to maintain partnerships with game developers [11][13] - The industry is witnessing a shift towards a new channel era focused on user experience and ecosystem services, driven by innovations like cloud gaming and AI [13]

Core Viewpoint - NetEase (NTES.US) reported a 2.2% pre-market decline to $131, with third-quarter total revenue growing 8% year-over-year, and online gaming revenue increasing 13%, both below market expectations [1] Group 1: Financial Performance - Adjusted net profit reached 9.5 billion yuan, meeting expectations, with historical peak sales expenses offset by investment income [1] - Cash collections grew 14% year-over-year, aligning with optimistic forecasts from the bank [1] Group 2: Strategic Focus - The company aims to enhance resource allocation efficiency in game development and operations, focusing on fewer but higher-potential new games and key evergreen titles [1] - Anticipation surrounds the initial success of the overseas version of "Yan Yun Shi Liu Sheng," which is expected to attract market attention [1] Group 3: Analyst Ratings - The bank maintains a "Buy" rating for NetEase, adjusting the target price for U.S. stocks from $172 to $170 [1]

Market Performance - The Hong Kong stock market experienced significant declines, with the Hang Seng Index dropping by 2.38%, the Hang Seng China Enterprises Index falling by 2.45%, and the Hang Seng Tech Index decreasing by 3.21%. This week marked a cumulative decline of 7.18%, resulting in four consecutive weeks of losses [1][3]. - The market turnover increased to 285.70 billion HKD, up from 245.14 billion HKD in the previous trading day [1]. Sector Performance - The technology and semiconductor sectors faced the largest declines, with JD Health falling over 8%, SMIC and Hua Hong Semiconductor dropping more than 6%, and Tencent Music and Baidu Group decreasing over 5%. Other notable declines included NIO, Alibaba, and Alibaba Health, which fell over 4%, while NetEase and BYD Electronics dropped over 3% [3]. - In contrast, Xiaomi Group saw an increase of over 1%, and Kingsoft experienced a slight rise [3]. Global Market Trends - Major European stock indices opened lower, with the Euro Stoxx 50 Index down by 1.57%, the UK FTSE 100 Index down by 1.04%, the French CAC 40 Index down by 1.29%, the German DAX 30 Index down by 1.48%, and the Italian FTSE MIB Index down by 1.48% [3]. Cryptocurrency Market - The cryptocurrency market faced a sharp decline, with Bitcoin dropping over 9% to below 82,000 USD per coin, Ethereum falling nearly 11%, BNB decreasing over 8%, and Solana dropping over 12%. The total market capitalization of cryptocurrencies fell below 3 trillion USD, with Bitcoin prices dropping below the average purchase price of the US Bitcoin ETF [3].

Market Overview - The Hong Kong stock market experienced a significant decline, with the Hang Seng Index dropping by 2.38%, the Hang Seng China Enterprises Index falling by 2.45%, and the Hang Seng Tech Index decreasing by 3.21% [1][2]. Sector Performance - The pharmaceutical sector faced the largest declines, with notable drops in internet healthcare, AI healthcare, biopharmaceuticals, pharmaceutical outsourcing, and innovative drug concepts. Key stocks included: - 3SBio (01530.HK) down 9.44% - WuXi Biologics (01873.HK) down 6.09% - Kingsoft Cloud (01548.HK) down 6.05% - Innovent Biologics (02696.HK) down 5.62% - CanSino Biologics (09926.HK) down 5.39% - JD Health (06618.HK) down 8.6% - Ping An Good Doctor (01833.HK) down 4.28% - Alibaba Health (00241.HK) down 4.46% - Crystal International (02228.HK) down 4.82% - MicroPort Scientific (02252.HK) down 3.55% [3]. Impact of Economic Data - The recent U.S. non-farm payroll data exceeded expectations, leading to a decrease in the likelihood of a Federal Reserve rate cut in December. This has implications for the valuation and financing of innovative drugs, as the cooling expectations for rate cuts may impact investment sentiment [3]. Commodity and Energy Sector - The weakening expectations for a December rate cut have also affected the U.S. dollar index, which surpassed the 100-point mark, putting pressure on the commodities sector. Key declines included: - Ganfeng Lithium (01772.HK) down 12.47% - Tianqi Lithium (09696.HK) down 11.93% - Jinchuan Group (06680.HK) down 6.63% - Lingbao Gold (03330.HK) down 5.47% - China Aluminum (02600.HK) down 4.85% - Chalco International (02068.HK) down 4.74% [4]. Renewable Energy Sector - The power equipment, photovoltaic, and wind power sectors also performed poorly, with significant declines in: - Northeast Electric (00042.HK) down 7.02% - Xinyi Solar (00968.HK) down 7.51% - GCL-Poly Energy (03800.HK) down 5.83% - Yihua Energy (02402.HK) down 6.27% - Flat Glass Group (06865.HK) down 6.02% [4]. Semiconductor Sector - The semiconductor sector saw notable declines, with: - SMIC (00981.HK) down 6.39% - Hua Hong Semiconductor (01347.HK) down 6.09% - Shanghai Fudan (01385.HK) down 3.78% - Beike Micro (02149.HK) down 5.2% [5]. Technology Sector - Other technology-related sectors, including cloud computing and AI, also faced downward pressure, with significant drops in: - Tencent Music (01698.HK) down 5.98% - Baidu (09888.HK) down 5.79% - Alibaba Group (09988.HK) down 4.65% - NetEase (09999.HK) down 3.76% [5].

Core Viewpoint - The report from CICC indicates that NetEase's revenue for the third quarter increased by 8% year-on-year to 28.4 billion yuan, while Non-GAAP net profit rose by 27% year-on-year to 9.5 billion yuan, slightly below expectations [1] Financial Performance - NetEase's revenue for Q3 reached 28.4 billion yuan, reflecting an 8% year-on-year growth [1] - Non-GAAP net profit for the same period was 9.5 billion yuan, marking a 27% year-on-year increase, but slightly lower than CICC's forecast [1] Factors Influencing Performance - The revenue growth was impacted by some products not fully recognizing revenue during the quarter and higher-than-expected marketing expenses [1] Shareholder Returns - NetEase announced a dividend of $0.114 per share [1] - The company extended its ongoing share repurchase program, which is capped at $5 billion, until January 2029, with $2 billion already repurchased by the end of Q3 [1] Analyst Ratings - CICC maintains its profit forecast for NetEase and continues to rate the company as "outperforming the industry" with a target price of 275 HKD [1]

Core Viewpoint - NetEase's Q3 total revenue grew by 8% year-on-year, with online gaming revenue increasing by 13%, both below market expectations [1] - Adjusted net profit reached 9.5 billion yuan, in line with expectations, as record-high sales expenses offset investment income [1] - Cash collections grew by 14% year-on-year, matching optimistic forecasts [1] Financial Performance - Total revenue growth of 8% year-on-year [1] - Online gaming revenue growth of 13% year-on-year [1] - Adjusted net profit of 9.5 billion yuan, meeting expectations [1] - Cash collections increased by 14% year-on-year [1] Strategic Focus - The company aims to enhance resource allocation efficiency in game development and operations [1] - Focus will be on a smaller number of new games with higher potential and the operation of key evergreen titles [1] - Anticipation of continued market attention on the overseas version of "Yan Yun Sixteen Sounds" following its initial success [1] Ratings and Price Targets - The company maintains a "Buy" rating [1] - Target price for Hong Kong stocks adjusted from 270 HKD to 265 HKD [1] - Target price for US stocks adjusted from 172 USD to 170 USD [1]

Core Insights - NetEase reported a net revenue of 28.4 billion yuan for Q3 2025, an increase of 8.2% year-on-year, with the gaming and related value-added services segment contributing 23.3 billion yuan, up 11.8% year-on-year, accounting for 82% of total revenue [2] - The net profit attributable to shareholders for the period was 8.6 billion yuan, indicating a recovery in the gaming business compared to the same period last year [2] Gaming Performance - The growth in NetEase's gaming business is attributed to the success of its "evergreen" titles, with "Fantasy Westward Journey" achieving a peak concurrent user count (PCU) of 3.58 million in Q3 [3] - The game has implemented a "no time fee" reform, simplifying systems and gameplay to lower entry barriers, successfully recalling lost users and attracting new players [3] - Another title, "Party Animals," has maintained a stable position in the iOS top 20 bestsellers, even reaching the top 10 during the summer season [3] Cost and Revenue Dynamics - In Q3 2025, NetEase's operating costs rose to 10.2 billion yuan, slightly up from 9.8 billion yuan in the previous quarter and 9.7 billion yuan year-on-year, primarily due to increases in personnel costs, revenue sharing, and game licensing costs [4] Future Strategy - NetEase aims to focus on "premium" and "well-assured" products while enhancing its core competitiveness in self-developed games and expanding its international presence [5] - The company has seen significant success in overseas markets, with "Marvel Duel" surpassing 40 million global users and "Nirvana in Fire" mobile version topping app store charts in several countries [5] - Management emphasized a strategic approach to game development, avoiding blind expansion and instead focusing on targeted investments in promising projects [5][6] Organizational Focus - CEO Ding Lei stated that recent personnel adjustments are normal and do not affect daily operations, aiming to enhance organizational focus and efficiency [6] - The company is committed to refining its evergreen projects while being cautious about new ventures, ensuring that each product launched possesses core competitiveness [6]

Core Viewpoint - The Hong Kong stock market experienced a significant decline, with the Hang Seng Index dropping by 2.07% and the Hang Seng Tech Index falling by 3.11% on November 21 [1] Group 1: Market Performance - The semiconductor sector led the declines, with notable drops in stocks such as Hua Hong Semiconductor and SMIC, both falling over 5% [1] - Shanghai Fudan also saw a decline of nearly 3% [1] Group 2: Technology Sector - Technology stocks faced widespread losses, with Baidu dropping over 6% and Alibaba declining by 4% [1] - Other major players like NetEase and JD.com experienced declines of nearly 3% [1]

格隆汇11月21日｜花旗发表研报指，网易第三季总净收入为284亿元，按年增长8.2%，按季增长1.7%， 较花旗及市场预测分别低出1.9%及3%，主要因为游戏收入低于预期。期内non-GAAP纯利95亿元，利润 率33.5%，较花旗预期轻微低出0.5%，但大致符合市场预期。该行指，网易从未发布官方业绩指引，因 此认为营收小幅未达预期及游戏收入略逊预期，并不构成颠覆性影响。正面来看，递延收入按年增长 25%，可能意味着今年第三季实现的相当部分收入将被推迟到后续季度确认，这也解释了尽管游戏组合 整体表现看似强劲，但营收仍略低于预期的现象。花旗予网易美股的目标价158美元，评级"买入"。 ...

Group 1: Company Updates - He Tongxue mentioned that his company might incur a loss of 1 to 2 million this year, attributing it to a controversial Weibo post that affected the brand image significantly [1] - Meizu responded to rumors about selling its headquarters, clarifying that it will not relocate as the lease is still long [2] - New Oriental's chairman, Yu Minhong, announced plans to take 20 outstanding employees and members to Antarctica next year, emphasizing the company's culture of allowing employee feedback [3] - Lenovo's CEO, Yang Yuanqing, revealed plans to launch a personal superintelligence system globally on January 6, which will integrate various devices and learn user habits [3] Group 2: Industry Developments - Guangdong province aims to strengthen the computing power industry and establish a significant semiconductor and integrated circuit hub by 2027 [4] - A report indicated that China's chip design industry sales are expected to reach 835.73 billion by 2025, growing by 29.4% year-on-year, driven by AI, electric vehicles, and rising memory prices [4] - Nvidia's CFO stated that the company is on track to achieve a revenue target of $500 billion from core AI chips over the next two years, with expectations for further growth [5] - NetEase reported Q3 revenue of 28.4 billion, with a net profit of 9.5 billion, driven by strong performance in gaming and AI services [5] - Lenovo's Q2 revenue reached 146.4 billion, marking a 15% year-on-year increase, with significant growth in its smart devices and infrastructure solutions [6] - Douyu reported Q3 revenue of 899.1 million, with a net profit increase of 232.8%, indicating improved profitability [7] Group 3: Financing and Market Activities - Newborn Intelligence completed over 100 million RMB in Series A financing, aimed at expanding sales and enhancing service systems [8] - Lingyi Technology submitted a listing application to the Hong Kong Stock Exchange [9] - WeRide's Robotaxi received a pure unmanned license in Switzerland, allowing it to operate on public roads, expanding its operational footprint internationally [10]