NTES(09999) 国海证券·2024-11-17 12:06Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company reported a revenue of 26.21 billion yuan for Q3 2024, showing a year-over-year decline of 3.9% but a quarter-over-quarter increase of 2.8%. The net profit attributable to shareholders was 6.538 billion yuan, down 16.6% year-over-year and down 3.3% quarter-over-quarter [1][3] - The gaming segment showed strong growth, with revenue from PC games increasing by 29% year-over-year, while mobile games experienced a decline of 10% due to base effects. The company is set to release several new titles, which are expected to drive future growth [3][7] - The company’s subsidiary, Youdao, achieved a revenue of 1.57 billion yuan in Q3 2024, marking a year-over-year growth of 2.2% and a quarter-over-quarter growth of 19.0%, with significant improvements in profitability [3][8] - NetEase Cloud Music reported a revenue of 2 billion yuan in Q3 2024, reflecting a year-over-year increase of 1.3% and a quarter-over-quarter decrease of 2.0%, with a notable improvement in gross margin [7] Financial Performance Summary - For Q3 2024, the company achieved a gross margin of 62.9%, with a slight year-over-year increase of 0.6 percentage points. The sales expense ratio was 14.5%, the R&D expense ratio was 16.9%, and the management expense ratio was 4.2% [3] - The total market capitalization is approximately 431.81 billion yuan, with a circulating market capitalization of the same amount [3] - The company’s revenue projections for FY2024-2026 are estimated at 104.3 billion, 108.3 billion, and 115.3 billion yuan, respectively, with adjusted net profits of 31.6 billion, 33 billion, and 36.1 billion yuan [8]