NTES(HK:09999) EBSCN·2024-04-10 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 205.4 HKD, compared to the current price of 158.8 HKD [3]. Core Insights - The return of Blizzard's games to the Chinese market is expected to have a limited positive impact on the overall growth of the company, despite the potential to attract returning players [2]. - The company's online gaming revenue is projected to recover slightly due to the return of Blizzard titles, but reliance on these titles is expected to decrease as new mobile games are launched [2]. - The partnership with Microsoft is anticipated to enhance the company's overseas market presence, which currently accounts for only about 10% of its gaming revenue [2]. Financial Performance and Forecast - The company’s revenue for 2023 is estimated at 103,468.2 million RMB, with a growth rate of 7.2% [8]. - Non-GAAP net profit for 2023 is projected to be 32,608.3 million RMB, reflecting a significant growth of 43.0% compared to the previous year [8]. - The forecast for adjusted net profit for 2024, 2025, and 2026 is 34,018.0 million RMB, 38,248.3 million RMB, and 41,474.9 million RMB respectively [8]. Revenue Breakdown - The company’s gaming revenue is expected to be increasingly driven by mobile games, which accounted for 76.7% of total gaming revenue by Q4 2023 [2]. - The anticipated revenue from the return of Blizzard games is expected to be a small positive contributor to the overall revenue growth [2]. Market Position and Strategy - The report highlights the potential for the company to leverage its expertise in mobile game development alongside popular overseas IPs, which could lead to increased revenue streams [2]. - The company is also focusing on expanding its overseas market presence, which is currently lower than competitors like Tencent [2].