NTES(09999) 东方证券·2024-11-19 06:25Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 149.00 / CNY 134.69 [4][3] Core Views - The company's revenue for Q3 2024 was CNY 26.2 billion, showing a year-over-year decrease of 3.9% but a quarter-over-quarter increase of 2.8%, primarily driven by increased mobile game net income [2] - The gross margin for Q3 was 62.9%, reflecting a year-over-year increase of 0.7 percentage points, mainly due to the growth in gross margin from cloud music [2] - The company expects significant revenue growth in Q4 2024, driven by the return of Blizzard games, with projected revenue reaching CNY 21.7 billion, a year-over-year increase of 4% and a quarter-over-quarter increase of 4% [2][3] Financial Summary - Q3 2024 total revenue from games and related value-added services was CNY 20.86 billion, down 4.2% year-over-year but up 4.0% quarter-over-quarter [2] - Mobile game revenue was CNY 14.3 billion, down 9.7% year-over-year and down 2.9% quarter-over-quarter, while PC game revenue was CNY 5.9 billion, up 29.0% year-over-year and up 30.0% quarter-over-quarter [2] - The company forecasts net profit attributable to shareholders for 2024-2026 to be CNY 28.7 billion, CNY 32.5 billion, and CNY 34.9 billion respectively [3] Revenue Breakdown - Q3 2024 cloud music revenue was CNY 2.0 billion, up 1.3% year-over-year, primarily due to increased subscription revenue [2] - Q3 2024 Youdao revenue was CNY 1.57 billion, up 2.3% year-over-year and up 19.0% quarter-over-quarter, driven by growth in online marketing services and smart devices [2]