NTES(NTES) 交银国际·2025-05-16 08:32Investment Rating - The report assigns a "Buy" rating for the company, NetEase (NTES US), with a target price raised from 143, indicating a potential upside of 16.5% [1][2][13]. Core Insights - The company's performance in Q1 2025 significantly exceeded expectations, driven by strong game revenue growth and effective cost control. Game revenue increased by 15% year-on-year, contributing to a 32% rise in adjusted net profit [1][6][7]. - The report highlights the positive trends in the gaming sector, with notable contributions from titles such as "Marvel Duel," "Yanyun Sixteen Sounds," and "Identity V." The company plans to enhance its game update cycles and establish a competitive ecosystem to stabilize game metrics [1][6][7]. Financial Performance Summary - Revenue Projections: The total revenue for 2025 is projected at RMB 114,279 million, reflecting an 8.5% growth rate. Game and value-added services revenue is expected to reach RMB 93,768 million, with a growth rate of 9.0% [5][14]. - Profitability Metrics: The adjusted operating profit for 2025 is forecasted at RMB 41,298 million, with an operating profit margin of 36.1%. The adjusted net profit is projected at RMB 36,899 million, representing a net profit margin of 32.3% [5][14]. - Quarterly Performance: In Q1 2025, the company reported a net income of RMB 10,301 million, an 18% increase from the previous quarter, with a net profit margin of 36% [7][8]. Market Position and Trends - The company has a market capitalization of approximately $146.5 billion, with a year-to-date stock price increase of 37.61% [4][14]. - The gaming segment is expected to continue its upward trajectory, with deferred revenue increasing by 16% quarter-on-quarter, setting a solid foundation for future revenue growth [1][6][7].