高盛：终端价值不变; PC游戏收入在2024年第二季度同比维持相似率; 维持买入评级

Investment Rating - The report maintains a "Buy" rating for NetEase Inc. (NTES) with a 12-month price target of US$125 and HK$196 [2][6][19]. Core Insights - The report expresses a constructive outlook on NetEase, highlighting manageable impacts on PC game revenue due to adjustments in the in-game economy of FWJ, which is expected to lead to a negative teens year-over-year decline in PC game revenue for 2Q24E [2][4][6]. - Despite the near-term stock price weakness, the report suggests that the fundamentals for 2Q24E remain stable, and the market has already priced in the anticipated weak performance [2][6]. - The report emphasizes that the terminal value of the core IP (FWJ) remains intact, and the current valuation is approaching a near 10-year low, indicating that upside risks outweigh downside risks at the current level [2][6][18]. Summary by Sections Key Debates - The depreciation of in-game currency in FWJ is attributed to the introduction of a 'time lock' on high-value items, which has reduced item circulation and demand for in-game currency, leading to an average drop of approximately 10% in value during 1H24 [3][7]. - FWJ monetizes through three main revenue streams: subscription fees, value-added services, and commissions from third-party in-game item sales [7][8]. - The report notes that the in-game currency exchange rate does not directly indicate worsening economic conditions but has mixed impacts on different stakeholders, with real players experiencing less impact compared to gold farming studios [8][9]. Revenue Expectations - The report anticipates a similar pace of year-over-year decline in PC game revenue for 2Q24, with a projected 15% decline in 1Q24 attributed to FWJ PC adjustments and a lingering base effect from Blizzard games [9][10]. - A mild sequential recovery in FWJ PC revenue is expected in 4Q24, driven by the launch of an annual expansion pack, although substantial improvements are not anticipated due to ongoing revenue drag from economic system adjustments [9][10]. Market Environment - The regulatory environment for gaming is viewed as benign, with regular issuance of approvals and improving clarity on minor protection regulations [10]. - Positive initial feedback has been observed for Naraka Bladepoint Mobile, which is expected to launch in July and August, with the company aiming to avoid overlapping with Tencent's releases [10][18]. - The report highlights that NetEase is well-positioned for market share gains in a macro-defensive industry, supported by a strong game pipeline and ongoing earnings upward revisions for 2024E [18].