Group 1: ZIM Integrated Shipping Services - ZIM Integrated Shipping Services is a global container liner shipping company providing container shipping and related services in Israel and internationally [1] - The Zacks Consensus Estimate for ZIM's current year earnings has increased by 35.7% over the last 60 days [1] - The company has a dividend yield of 5.8%, which is higher than the industry average of 3.6% [2] Group 2: NetEase - NetEase is an Internet technology company engaged in the development of applications, services, and other technologies for the Internet in China [2] - The Zacks Consensus Estimate for NetEase's current year earnings has increased by nearly 4.1% over the last 60 days [2] - The company has a dividend yield of 1.8%, compared to the industry average of 0.0% [3] Group 3: West Bancorporation - West Bancorporation focuses on providing community-oriented personal and commercial banking services to small and medium-sized businesses, individuals, schools, organizations, and local government [3] - The Zacks Consensus Estimate for West Bancorporation's current year earnings has increased by nearly 7.7% over the last 60 days [3] - The company has a dividend yield of 4.3%, which is higher than the industry average of 2.9% [4]

Investment Rating - The report maintains a "Buy" rating for NetEase-S (9999 HK) with a target price of HKD 180 0 [1][2] Core Views - NetEase's product cycle has bottomed out with key new games such as *Marvel Rivals* and *Yanyun Sixteen Sounds* set to launch in December 2024 and *Infinity* expected in 2025 [1] - The company's game pipeline is robust with a focus on international IPs and innovative gameplay which could drive future growth [1][18] - Despite short-term revenue pressure due to high base effects in Q3 2024 NetEase's毛利率 exceeded expectations at 62 9% [1] Product Line Summary Key New Games - *Marvel Rivals* a 6v6 hero tactical shooter based on the Marvel IP is set to launch on December 6 2024 with strong pre-registration data indicating potential for significant overseas player acquisition and long-term monetization [1][18] - *Yanyun Sixteen Sounds* an open-world martial arts game is expected to launch on PC by the end of December 2024 with mobile optimization ongoing The game has undergone significant tuning to address earlier concerns and could exceed market expectations [1][25] - *Infinity* an innovative open-world二次元 game is set to begin testing in December 2024 with unique art and gameplay mechanics that could expand NetEase's presence in the二次元 genre [1][31] Classic Games - Flagship games like *Fantasy Westward Journey* and *Justice* showed some year-over-year pressure in Q3 2024 but are expected to stabilize quarter-over-quarter *Fantasy Westward Journey*手游 continues to attract younger users with lighter gameplay [1][39] - *Justice*手游 saw a decline in Q3 2024 due to high base effects but its high user stickiness and回流率 are expected to support its lifecycle [1][51] Other Notable Games - *Eggy Party* saw a decline in third-party rankings partly due to the shift to官网付费 but is expected to maintain its lead over competitors like *DreamStar* [1][52][54] Financial Performance - NetEase's Q3 2024 revenue was RMB 26 21 billion down 3 9% YoY below Bloomberg consensus due to high base effects from games like *Justice* [1][61] - Game and related value-added services revenue declined 4 2% YoY to RMB 20 86 billion while毛利率 improved to 62 9% exceeding expectations [1][62] - Adjusted net profit attributable to母公司 was RMB 7 5 billion down 13 3% YoY [1][62] Valuation and Forecast - The report下调s NetEase's adjusted net profit forecasts for 2024-2026 to RMB 31 29 billion RMB 33 47 billion and RMB 35 51 billion respectively reflecting the impact of high base effects in Q3 2024 [1][88] - The SOTP valuation assigns an 18x PE to the online游戏业务 for 2025 with target price下调 to HKD 180 0 [1][88]

Core Insights - True value in investments is derived from growth rather than short-term gains, emphasizing a long-term perspective on evaluation [1] - Great businesses provide significant societal value and exhibit durability, deserving of substantial growth [1] - Key characteristics sought in investments include selection, convenience, value, and durability, with a preference for non-cyclical businesses [1] Business Characteristics - Businesses that can consistently outperform competitors through superior products and services are favored [1] - The ability to create multiple revenue streams and maintain complex operations is seen as advantageous [1] - A strong test of a business's resilience is its ability to recover from adversity, both macro and micro [1] Value Drivers - Uniqueness is identified as the primary driver of value [1] - Low costs associated with maintaining existing business operations provide leverage for reinvestment and growth [1] - Trust and network effects are important indicators of a business's durability [1] Management Importance - Effective management is crucial, with a preference for executives whose interests align with the business and who maintain a strong focus [1] - Companies led by seasoned CEOs, founders, or family businesses are particularly valued [1] - Good management fosters a culture that empowers employees and attracts talent, with continuous learning being a key trait [1] Investment Strategy - The success of companies like Amazon illustrates the benefits of a customer-centric approach, leading to extraordinary returns [1] - Favorable investment conditions arise when negative news is already priced in, revealing true value [1] - A strategy of buying back shares is recommended for businesses with durable prospects [1]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong expectation of performance exceeding the market by over 20% [7][10]. Core Insights - The company's performance and valuation are at a low point, with expectations for a turning point approaching. The Q3 pipeline was weak, but Q4 is anticipated to show improvement with new game releases contributing positively [7]. - The company is expected to see revenue growth in 2025, driven by new game launches and a recovering gaming market. The adjusted revenue forecasts for 2024-2026 are 105.6 billion, 116.7 billion, and 122.6 billion respectively [7][9]. - Shareholder returns are expected to be attractive, with significant cash dividends and share buybacks accelerating. The total shareholder return for the year is projected to reach 2.61 billion USD, resulting in a return rate of 4.7% [8]. Summary by Sections Market Data - Closing price is 133.60 HKD, with a market capitalization of 428.96 billion HKD. The stock has a 52-week high of 180.50 HKD and a low of 116.00 HKD [3]. Financial Performance - For Q3 2024, the company reported revenue of 26.21 billion, a year-over-year decrease of 4%. The adjusted net profit was 7.50 billion, down 13% year-over-year [10]. - The company’s revenue and net profit forecasts for 2024-2026 are adjusted to reflect a more conservative outlook, with net profits expected to be 32.08 billion, 35.56 billion, and 37.91 billion respectively [9][10]. Game Segment Performance - The online gaming segment saw a slight decline, while the PC gaming segment experienced significant growth, with a 29% year-over-year increase in Q3 [12]. - The company is launching several new games, including "Fragpunk" and "Marvel: Secret Wars," which are expected to drive growth in 2025 [7]. Shareholder Returns - The company has accelerated its share buyback program, with Q3 buybacks totaling 500 million USD, contributing to a total of 9.6 billion USD in buybacks for the first three quarters of 2024 [8].

Investment Rating - Buy rating with a target price of $108.00 USD / HK$168.05, implying a 26.05% / 24.39% upside potential for the US and HK markets respectively [2] Core Views - Blizzard games' return drives PC gaming revenue growth, with new product cycle expected in 2025 [2] - Q3 2024 revenue of RMB 26.21 billion, down 3.9% YoY, below Bloomberg consensus of RMB 26.59 billion [2] - GAAP net profit of RMB 6.54 billion, down 16.6% YoY, while Non-GAAP net profit of RMB 7.50 billion, down 13.3% YoY [2] - Mobile gaming revenue under pressure due to lack of new titles, while PC gaming revenue grows 29.0% YoY [2] - Youdao achieves record operating profit in Q3, driven by smart hardware and advertising business growth [2] - Cloud Music enters Hong Kong Stock Connect, with Q3 revenue of RMB 2.0 billion, up 1.3% YoY [2] Financial Performance Revenue - Q3 2024 total revenue: RMB 26.21 billion, down 3.9% YoY [2] - Gaming and value-added services revenue: RMB 20.86 billion, down 4.2% YoY [2] - Mobile gaming revenue: RMB 14.3 billion, down 9.7% YoY [2] - PC gaming revenue: RMB 4.55 billion, up 29.0% YoY [2] - Youdao revenue: RMB 1.57 billion, up 2.2% YoY [2] - Cloud Music revenue: RMB 2.0 billion, up 1.3% YoY [2] Profitability - Operating profit margin: 27.3%, down 40bps YoY [2] - GAAP net profit: RMB 6.54 billion, down 16.6% YoY [2] - Non-GAAP net profit: RMB 7.50 billion, down 13.3% YoY [2] - Youdao operating profit: RMB 110 million, up 186% YoY [2] Future Projections - 2024-2026 revenue CAGR: 10.5% [2] - 2024-2026 Non-GAAP net profit CAGR: 8.5% [2] - 2025 PC gaming revenue expected to decline 12% to RMB 21.6 billion [2] - 2025 mobile gaming revenue expected to grow 5.4% to RMB 60.0 billion [2] Business Segments Gaming - Blizzard games' return drives PC gaming growth, with World of Warcraft and Hearthstone contributing to revenue increase [2] - New titles expected in 2025, including Marvel Rivals and Yan Yun Shi Liu Sheng [2] - Pipeline includes Code: Infinity, Marvel Rampage, and Destiny: Rise [2] Youdao - Smart hardware revenue grows 25.2% YoY to RMB 320 million, driven by X7Pro dictionary pen sales [2] - Online marketing revenue grows 45.6% YoY to RMB 490 million, supported by AI optimization [2] Cloud Music - DAU/MAU ratio remains above 30%, with 24.4% paying user ratio [2] - ARPU reaches RMB 6.2 per month, with 730,000 independent musicians on the platform [2] Valuation - Target price of $108.00 USD / HK$168.05, based on 14.9x 2025 PE [2] - Gaming business valued at 1.2x PEG, with 12x PE for Non-GAAP net profit [2] - Youdao and Cloud Music valued based on NetEase's shareholding, with 5% discount applied to group valuation [2]

Investment Rating - The report maintains a "Buy" rating for the company [6][34]. Core Insights - The company reported Q3 2024 revenue of 26.21 billion yuan, a year-over-year decrease of 4% but a quarter-over-quarter increase of 3%. The gross margin for Q3 was 62.9%, down by 0.09 percentage points [2][13]. - Blizzard's return has driven growth in PC games, while mobile games have declined primarily due to a high base from the previous year. Q3 gaming and related services revenue was 20.864 billion yuan, down 4.2% year-over-year [3][21]. - The company has a strong pipeline of new games, including "Marvel: Contest of Champions" and "Yanyun Sixteen Sounds," expected to launch within the year, indicating robust game development capabilities [4][26]. Financial Summary - Q3 2024 GAAP net profit was 6.538 billion yuan, a decrease of 16.57% year-over-year, while Non-GAAP net profit was 7.499 billion yuan, down 13.26% year-over-year [2][13]. - The company forecasts total revenues of 107.2 billion yuan, 120.3 billion yuan, and 125.6 billion yuan for 2024, 2025, and 2026, respectively, with Non-GAAP net profits of 32.8 billion yuan, 35.6 billion yuan, and 37.4 billion yuan for the same years [4][26]. - The estimated fair value per share is 114.61 USD for ADS and 178.44 HKD for H-shares [6][30]. Business Segment Performance - The gaming and related services segment generated 20.864 billion yuan in Q3 2024, with online game revenue at 20.196 billion yuan, a slight decrease of 1.04% year-over-year. Mobile game revenue accounted for 70.8% of online game revenue, totaling 14.299 billion yuan, down 9.71% year-over-year [3][25]. - The education segment, Youdao, achieved revenue of 1.573 billion yuan in Q3 2024, reflecting a year-over-year growth of 2.19% [24]. - Cloud music revenue was 1.999 billion yuan in Q3 2024, with a gross margin of 33%, up 5.58 percentage points year-over-year [24][25]. Future Outlook - The company is expected to benefit from the return of Blizzard games, which has positively impacted PC game revenue. The mobile segment is anticipated to recover with new game launches [4][26]. - The report highlights the company's strong R&D capabilities and the potential for continued success in game development, with a focus on high-quality game output [4][26].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 149.00 / CNY 134.69 [4][3] Core Insights - The company reported Q3 revenue of CNY 26.2 billion, a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8%, primarily driven by increased mobile game net revenue [2] - Q3 gross margin was 62.9%, reflecting a year-over-year increase of 0.7 percentage points, mainly due to the growth in gross margin from cloud music [2] - The company anticipates a recovery in game revenue in Q4, driven by the return of Blizzard games, with expected revenue of CNY 21.7 billion, representing a year-over-year increase of 4% and a quarter-over-quarter increase of 4% [2][3] Financial Summary - Q3 net profit attributable to shareholders was CNY 6.54 billion, down 16.6% year-over-year and 3.3% quarter-over-quarter [2] - The company expects net profit for 2024 to be CNY 28.7 billion, with projections of CNY 32.5 billion and CNY 34.9 billion for 2025 and 2026, respectively [3] - The report highlights a total revenue forecast of CNY 106.3 billion for 2024, with a year-over-year growth of 2.77% [3] Revenue Breakdown - Total revenue from games and related value-added services in Q3 was CNY 20.86 billion, a year-over-year decrease of 4.2% but a quarter-over-quarter increase of 4.0% [2] - Mobile game revenue was CNY 14.3 billion, down 9.7% year-over-year and 2.9% quarter-over-quarter, while PC game revenue increased significantly by 29.0% year-over-year and 30.0% quarter-over-quarter to CNY 5.9 billion [2] - Cloud music revenue in Q3 was CNY 2.0 billion, reflecting a year-over-year increase of 1.3% [2] Future Growth Drivers - Upcoming mobile games such as "Seven Days World" and "Yanyun Sixteen Sounds" are expected to drive future growth [3] - The return of Blizzard's "Hearthstone" is anticipated to significantly boost mobile game revenue, with expected daily active users (DAU) increasing by 150% compared to before the game's closure [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 149.00 / CNY 134.69 [4][3] Core Views - The company's revenue for Q3 2024 was CNY 26.2 billion, showing a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8%, primarily driven by increased mobile game net income [2] - The gross margin for Q3 was 62.9%, reflecting a year-over-year increase of 0.7 percentage points, mainly due to the growth in gross margin from cloud music [2] - The company expects significant revenue growth in Q4 2024, driven by the return of Blizzard games, with projected revenue reaching CNY 21.7 billion, a year-over-year increase of 4% and a quarter-over-quarter increase of 4% [2][3] Financial Summary - Q3 2024 total revenue from games and related value-added services was CNY 20.86 billion, down 4.2% year-over-year but up 4.0% quarter-over-quarter [2] - Mobile game revenue was CNY 14.3 billion, down 9.7% year-over-year and down 2.9% quarter-over-quarter, while PC game revenue was CNY 5.9 billion, up 29.0% year-over-year and up 30.0% quarter-over-quarter [2] - The company forecasts net profit attributable to shareholders for 2024-2026 to be CNY 28.7 billion, CNY 32.5 billion, and CNY 34.9 billion respectively [3] Revenue Breakdown - Q3 2024 cloud music revenue was CNY 2.0 billion, up 1.3% year-over-year, primarily due to increased subscription revenue [2] - Q3 2024 Youdao revenue was CNY 1.57 billion, up 2.3% year-over-year and up 19.0% quarter-over-quarter, driven by growth in online marketing services and smart devices [2]

Investment Rating - The report maintains an "Outperform" rating for NetEase-S (09999 HK) [2][5][28] Core Views - NetEase's PC gaming revenue showed strong growth, while mobile gaming revenue declined due to a high base effect [3][19] - The company's gaming business is stabilizing, with key focus on the upcoming game "Yanyun Sixteen Sounds" [3][21] - NetEase's old games like "Fantasy Westward Journey" remain stable, while "Identity V" and "Naraka: Bladepoint" continue to perform well [3][21] - The company's game development capabilities and pipeline are strong, with multiple new games set to launch [5][21] Financial Performance - In Q3 2024, NetEase reported revenue of RMB 26 2 billion, down 4% YoY, with Non-GAAP net profit of RMB 7 5 billion, down 13% YoY [2][10] - The company's gaming revenue was RMB 20 2 billion, down 1% YoY, with PC gaming revenue up 29% YoY to RMB 5 9 billion [3][19] - NetEase's deferred revenue grew 10% YoY to RMB 15 5 billion [3][20] - Youdao's revenue increased 2% YoY to RMB 1 6 billion, with advertising revenue up 46% YoY [4][22] - NetEase Cloud Music's revenue grew 1% YoY to RMB 2 billion, with gross margin improving 5 6 percentage points to 32 8% [4][26] Business Segments Gaming - PC gaming revenue growth was driven by the return of "World of Warcraft" and the strong performance of "Naraka: Bladepoint" [3][19] - "World of Warcraft" saw a 50% increase in daily active users compared to pre-shutdown levels, while "Hearthstone" saw a 150% increase in active users [3][21] - New games like "Marvel Rivals" and "Yanyun Sixteen Sounds" are set to launch in December 2024 [3][21] Youdao - Youdao's learning services revenue declined 19% YoY to RMB 770 million due to business restructuring and optimization [4][22] - Smart device revenue grew 25% YoY to RMB 320 million, driven by new product launches [4][22] - Advertising revenue increased 46% YoY to RMB 490 million, supported by the application of AI technology [4][22] NetEase Cloud Music - NetEase Cloud Music's gross margin improved significantly, reaching 32 8% in Q3 2024, up 5 6 percentage points YoY [4][26] - The improvement was attributed to increased music subscription revenue and better cost control [4][26] Valuation and Forecast - The report revised down NetEase's profit forecasts for 2024-2026, with adjusted net profit estimates of RMB 32 billion, RMB 36 1 billion, and RMB 38 billion, respectively [5][28] - The target price was adjusted to HKD 157-181, representing a 22% reduction [5][28] - The valuation is based on a 13-15x PE ratio for 2025 [5][28]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The gaming business has exceeded expectations, with a focus on new game launches at the end of the year [2] - The company achieved revenue of 26.21 billion yuan in Q3 2024, a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8% [2] - The gaming and related value-added services outperformed expectations with 20.9 billion yuan compared to the 20.7 billion yuan consensus [2] - The company’s long-term games continue to perform well, with significant contributions from titles like "Identity V" and "Naraka: Bladepoint" [2] - New games expected to launch in December, including Marvel IP licensed titles, are anticipated to drive revenue growth [2] Financial Performance Summary - Q3 2024 gross profit was 16.48 billion yuan, with a gross margin of 62.9%, showing a year-over-year decrease of 2.9% [2] - Adjusted net profit for Q3 2024 was 7.5 billion yuan, a year-over-year decrease of 13.3% [2] - The company forecasts adjusted net profits for CY 2024/25/26 to be 31.82 billion, 34.94 billion, and 38.32 billion yuan respectively [2][4] - The company’s revenue growth rates are projected at 2.2% for 2024, 7.1% for 2025, and 6.0% for 2026 [4][8] Key Financial Indicators - The company’s operating income for 2023 is projected at 103.47 billion yuan, with a year-over-year growth of 7.2% [4] - The return on equity (ROE) is expected to decline from 25% in 2023 to 21% by 2026 [4] - The price-to-earnings (P/E) ratio is projected to decrease from 16.1 in 2023 to 10.5 by 2026 [4][8]