Ge Long Hui·2025-11-24 02:54Core Viewpoint - NetEase's Q3 performance slightly missed expectations, with total revenue falling short by 3% and game revenue by 2% [1] Group 1: Financial Performance - Operating profit margin decreased by 3 percentage points due to increased sales and marketing expenses [1] - Non-GAAP net profit met expectations, primarily driven by better-than-expected investment income [1] Group 2: Profitability Trends - Overall profit margin trend for NetEase remains healthy [1] - The game "Yan Yun Shi Liu Sheng" has a relatively low profit margin in overseas markets, which may drag down overall game gross margin [1] - Music business gross margin is on the rise, while Youdao's gross margin has declined due to changes in revenue structure [1] Group 3: Future Projections - The company anticipates a seasonal decline in marketing expenses in Q4 [1] - Forecasted adjusted net profits for Q4 FY2025, FY2025, and FY2026 are 9.6 billion, 39.9 billion, and 41.6 billion respectively, with year-on-year growth of 0%, 19%, and 4% [1] - Target price for NetEase's US stock has been raised from $160 to $168, maintaining an "outperform" rating [1]