NTES(09999) 申万宏源·2024-09-19 00:38Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong expectation of performance exceeding the market by over 20% [3][4]. Core Insights - The company's Q2 mobile game revenue grew by 16% year-on-year, outperforming the industry average decline of 5.7%, with significant contributions from titles like "Dreamland Mobile" and "Identity V" [3]. - The outlook for the second half of the year is positive, with expectations for growth driven by new PC game releases and the stabilization of existing titles [3][4]. - Online music revenue increased by 27% year-on-year, indicating strong growth potential in this segment despite some offset from a strategic reduction in live streaming [3][4]. Financial Data and Earnings Forecast - Revenue projections for 2024E, 2025E, and 2026E are estimated at 107,588 million RMB, 119,644 million RMB, and 127,182 million RMB respectively, with growth rates of 4%, 11%, and 6% [2][6]. - Adjusted net profit for 2024E, 2025E, and 2026E is forecasted to be 32,822 million RMB, 36,374 million RMB, and 39,738 million RMB, reflecting growth rates of 0%, 11%, and 9% [2][6]. - The company’s price-to-earnings (PE) ratio is projected to decrease from 11x in 2024 to 9x in 2026, indicating a potentially undervalued stock [4].