Ge Long Hui·2025-11-21 02:38Core Viewpoint - NetEase's Q3 performance fell short of expectations, with total revenue and adjusted EBITDA growing by 8.2% and 9.8% year-on-year to 28.4 billion and 8.9 billion respectively, missing estimates by 3.6% and 11.5% [1] Group 1: Financial Performance - Total revenue for Q3 reached 28.4 billion, reflecting an 8.2% year-on-year increase [1] - Adjusted EBITDA amounted to 8.9 billion, showing a 9.8% year-on-year growth [1] - Both revenue and EBITDA figures were below the estimates provided by the bank [1] Group 2: Gaming Revenue Insights - The recovery in online gaming revenue was slower than anticipated, with a year-on-year growth rate of 12.7% [1] - Key games such as "Fantasy Westward Journey," "Party Animals," and "Yun Yun Sixteen Sounds" contributed to the underperformance [1] - The personal computer gaming segment may be affected by a high base, as Blizzard games are set to return in Q3 2024, while new mobile games have not generated strong momentum [1] Group 3: Future Outlook - The company is focusing on fewer but higher-quality game developments, which may lead to increased volatility in gaming revenue [1] - There is an expectation for improved gaming revenue growth by 2026 with the release of major games [1] - The bank has raised its adjusted net profit forecasts for the next two years by 1% to 2%, while maintaining a target price of $140 for U.S. stocks and an "outperform" rating [1]