NTES(09999) 广发证券·2024-05-28 07:02Investment Rating - The report maintains a "Buy" rating for the company [4]. Core Views - The company reported Q1 2024 revenue of 26.852 billion RMB, a year-over-year increase of 7.21%. The gross profit for Q1 was 17 billion RMB, with a gross margin of 63.37% [2][8]. - Mobile gaming showed steady growth, while PC gaming experienced a decline. Q1 gaming and related value-added services revenue was 21.46 billion RMB, up 7% year-over-year, with mobile games accounting for 78.6% of online gaming revenue [2][19]. - The company has a strong pipeline of self-developed games, with several titles set to launch in the coming months, which is expected to bolster future performance [2][19]. Summary by Sections Financial Performance - Q1 2024 revenue was 26.852 billion RMB, with a gross profit of 17 billion RMB and a gross margin of 63.37%. Sales expenses were 4.022 billion RMB, while R&D expenses were 4.175 billion RMB, representing 15.55% of revenue [2][8][19]. - The company reported a GAAP net profit of 7.634 billion RMB and a Non-GAAP net profit of 8.511 billion RMB, with Non-GAAP net profit margin at 31.70% [2][19]. Gaming Business - The gaming segment generated 21.46 billion RMB in revenue, with online gaming revenue at 20.43 billion RMB, reflecting a 9.84% increase year-over-year. Mobile games contributed 16.058 billion RMB, up 19.41%, while PC games saw a 15.15% decline [2][19]. - New game launches such as "射雕" and "世界之外" had limited impact, but existing titles like "逆水寒" and "蛋仔派对" performed well during the Spring Festival [2][19]. Future Outlook - The company expects to gradually recover from the impact of PC gaming adjustments, with Blizzard's return to the Chinese market expected to support this segment [2][19]. - Revenue projections for 2024-2026 are set at 111.9 billion RMB, 126.7 billion RMB, and 138.9 billion RMB, respectively, with Non-GAAP net profits expected to be 34.5 billion RMB, 38.7 billion RMB, and 42.4 billion RMB [2][19][25].