NTES(09999) 浦银国际证券·2024-05-27 01:31Investment Rating - The report maintains a "Buy" rating for the company with a target price adjusted to HKD 173 / USD 111, reflecting a potential upside of 22% from the current price of HKD 141.5 / USD 94.74 [3][4][12] Core Insights - The company's Q1 2024 revenue reached RMB 26.9 billion, a year-on-year increase of 7.2%, slightly above market expectations. The adjusted net profit was RMB 8.5 billion, up 31.7% year-on-year, also exceeding market forecasts [3][6] - The gaming segment continues to show strong growth, with game revenue at RMB 20.4 billion, a 10% increase year-on-year, driven by popular titles such as "逆水寒" and "蛋仔派对" [3][6] - The company is set to launch several new games in Q3, which are expected to act as catalysts for growth despite recent adjustments to existing games [3][6] Financial Performance Summary - Revenue projections for FY24E have been slightly adjusted downwards by 1% to RMB 111.6 billion, with adjusted net profit forecasted at RMB 33.6 billion [3][6] - The company’s gross margin improved to 63.4%, up 3.9 percentage points year-on-year, while the adjusted net margin increased to 31.7%, up 1.5 percentage points [3][6] - The report outlines a steady growth trajectory with revenue expected to reach RMB 130.1 billion by FY26E, with a compound annual growth rate (CAGR) of 6.5% [6][10]