NTES(NTES) 招银国际·2025-02-21 04:33Investment Rating - The report maintains a "BUY" rating for NetEase, with a target price of US104.17 [3][12]. Core Insights - NetEase's 4Q24 performance showed total revenue of RMB26.7 billion, down 1.4% YoY, but operating profit increased by 13.9% YoY to RMB7.8 billion, exceeding consensus estimates due to effective control of selling and marketing expenses [1][2]. - For FY25E, new game titles such as Marvel Rivals and Where Winds Meet are expected to drive revenue growth, despite a slight reduction in total revenue forecasts for FY25-26E by 2-3% [1][9]. - The company is focusing on prudent operational expense control, which is anticipated to support operating profit margin (OPM) improvement in FY25E [1][8]. Financial Summary - FY24 total revenue was RMB105.3 billion, with a gross margin of 62.5% and adjusted net profit of RMB33.5 billion, reflecting a YoY growth of 2.8% [2][19]. - Revenue projections for FY25E are set at RMB110.7 billion, with adjusted net profit expected to reach RMB36.0 billion, indicating a 7.5% growth [9][19]. - The company reported a significant improvement in OPM, which rose by 3.9 percentage points YoY to 29.2% in 4Q24 [1][8]. Business Segments - The online gaming segment remains the primary revenue driver, contributing 88% to the total valuation, with a projected valuation of US1.8 billion, reflecting a cautious approach to customer acquisition and prioritizing higher ROI engagements [12][13]. Market Position - NetEase's market capitalization stands at approximately US$66.7 billion, with a strong share performance over the past months, showing a 19% increase over the last three months [3][5]. - The company has a solid shareholder return strategy, having returned RMB20.0 billion to shareholders through dividends and share buybacks in FY24 [1][8].