Group 1 - The "Securities Settlement Risk Fund Management Measures" will be implemented starting December 8, 2025, impacting the Nasdaq and commodity gold sectors [1] - Leap Motor will be included in the Hang Seng Tech Index effective December 8, 2025, affecting the Hang Seng Tech sector [2] - The "Artificial Intelligence + Future Industry Development Conference" will take place from December 8 to 9, 2025, impacting the artificial intelligence sector [2] Group 2 - The 5000th general-purpose embodied robot from Zhiyuan will roll off the production line on December 8, 2025, impacting the robotics sector [2] - A dialogue meeting with international economic organization leaders will be held by the Premier of the State Council in Beijing on December 9, 2025, affecting the large financial sector [2] - OpenAI's GPT-5.2 model is expected to be released on December 9, 2025, impacting the artificial intelligence sector [2] Group 3 - The 9th International Carbon Materials Conference and Industry Exhibition will occur on December 9, 2025, impacting the semiconductor materials sector [2] - The 2025 China Fertilizer Industry High-Quality Development Conference will be held on December 9, 2025, affecting the chemical sector [2] - The Federal Open Market Committee meeting will take place from December 10 to 11, 2025 [2] Group 4 - Oracle's financial report will be released on December 10, 2025, impacting the artificial intelligence sector [2] - The 20th China IDC Industry Annual Conference (IDCC2025) and Digital Infrastructure Technology Expo (DITExpo) will be held from December 10 to 11, 2025, impacting the computing power sector [2] - The 2025 China (Sanya) International Gold Market Annual Conference will take place from December 10 to 12, 2025, affecting the gold sector [2] Group 5 - The 2025 China Platinum Group Metals Market Annual Conference will be held on December 10, 2025, impacting the rare metals sector [2] - Blizzard's game "Diablo IV" will launch its national server on December 12, 2025, impacting the gaming sector [3] - The Shanghai and Shenzhen 300, CSI 500, CSI 1000, CSI A50, CSI A100, and CSI A500 indices will undergo sample adjustments effective after market close on December 12, 2025 [3]

Group 1: Financial Performance - Net revenue for Q3 2025 was 28.4 billion, representing a year-over-year increase of 8%, but 3% lower than Bloomberg's expectations, primarily due to deferred game revenue [1] - GAAP net profit attributable to shareholders was 8.6 billion, up 32% year-over-year, in line with Bloomberg's expectations [1] - Non-GAAP net profit attributable to shareholders was 9.5 billion, a 27% increase year-over-year, slightly below Bloomberg's expectations by 1% [1] Group 2: Gaming Segment Insights - Total revenue from games and related value-added services reached 23.3 billion, a 12% year-over-year increase, but 2% lower than Bloomberg's expectations, mainly due to unrecognized revenue from contract liabilities [1] - The active user base for the game "Dream of the Red Chamber" continues to reach new highs, while "Yanyun Sixteen Sounds" is expected to perform well in Q4 overseas [1] - Anticipated stable performance for mobile games in Q4, driven by recovery growth in "Egg Party" and significant contributions from "Yanyun Sixteen Sounds" [1] Group 3: Online Music Business - Cloud music revenue for Q3 2025 was 2 billion, a decrease of 2% year-over-year, and 3% lower than Bloomberg's expectations, attributed to fluctuations in digital album content [2] - The company expects stable growth in traffic and paid memberships due to the return of copyrights and continuous content additions in the second half of the year [2] - Online music revenue is projected to maintain a 10% growth rate in Q4, driven by an improved music library and increasing paid user rates [2] Group 4: Future Growth Prospects - The company anticipates the launch of the new game "Forgotten Sea" in 2026, which is expected to drive growth [2] - Profit forecasts for the company from 2025 to 2027 are adjusted to 36.2 billion, 39.8 billion, and 45 billion respectively, based on game performance and Q3 financial adjustments [2] - The company maintains a target price of 248.49 HKD / 226.29 CNY, with a "Buy" rating [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 248.49 HKD / 226.29 CNY [3][5]. Core Insights - The company's Blizzard games are gradually resuming operations, and the evergreen game "Yan Yun Shi Liu Sheng" is performing excellently both domestically and internationally. The anticipated launch of "Forgotten Sea" in 2026 is expected to drive growth [3]. - The adjusted profit forecasts for the company from 2025 to 2027 are 362 billion, 398 billion, and 450 billion CNY respectively, reflecting slight adjustments based on game performance and Q3 financial results [3]. Financial Performance Summary - **Revenue Forecasts**: The company expects revenues of 103,468 million CNY in 2023, growing to 138,188 million CNY by 2027, with a CAGR of approximately 12.37% from 2025 to 2027 [4]. - **Net Profit**: The net profit attributable to the parent company is projected to increase from 29,417 million CNY in 2023 to 44,999 million CNY in 2027, with a notable growth rate of 21.98% in 2025 [4]. - **Earnings Per Share (EPS)**: EPS is expected to rise from 9.29 CNY in 2023 to 14.20 CNY in 2027 [4]. - **Profit Margins**: The gross margin is projected to improve from 60.95% in 2023 to 66.19% in 2027, while the net margin is expected to stabilize around 32% [4]. Market Performance - The company's stock price as of November 20, 2025, was 212.6 HKD, with a 52-week high of 248 HKD and a low of 125.99 HKD [5]. - The company's market capitalization is approximately 673,508 million HKD [5]. Game Performance Insights - The total revenue from games and related value-added services in Q3 2025 was 233 billion CNY, reflecting a year-on-year growth of 12% [10]. - The game "Dream Journey" continues to see high activity levels, and "Yan Yun Shi Liu Sheng" is expected to perform well in overseas markets in Q4 [10].

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company is experiencing a recovery in Blizzard games, with the evergreen game "Yanyun Sixteen Sounds" performing well both domestically and internationally. The anticipated launch of "Forgotten Sea" in 2026 is expected to drive growth. The adjusted net profit forecasts for 2025-2027 are 362 billion, 398 billion, and 450 billion CNY respectively, reflecting slight adjustments based on game performance and Q3 financial results. The target price is set at 248.49 HKD / 226.29 CNY [3][5] Financial Performance Summary - **Revenue Forecasts**: The company’s revenue is projected to grow from 103,468 million CNY in 2023 to 138,188 million CNY in 2027, with year-on-year growth rates of 7.23%, 1.77%, 7.77%, 8.37%, and 12.37% respectively [4] - **Operating Profit**: Operating profit is expected to increase from 27,709 million CNY in 2023 to 45,775 million CNY in 2027, with significant growth in 2025 at 22.22% [4] - **Net Profit**: The net profit attributable to the parent company is forecasted to rise from 29,417 million CNY in 2023 to 44,999 million CNY in 2027, with a notable growth of 21.98% in 2025 [4] - **Earnings Per Share (EPS)**: EPS is projected to grow from 9.29 CNY in 2023 to 14.20 CNY in 2027 [4] - **Profitability Ratios**: The gross margin is expected to improve from 60.95% in 2023 to 66.19% in 2027, while the net margin is projected to increase from 28.43% to 32.56% over the same period [4] Market Performance - The company's stock price as of November 20, 2025, was 212.6 HKD, with a 52-week high of 248 HKD and a low of 125.99 HKD [5]

Core Viewpoint - Bank of America Securities anticipates that NetEase will experience revenue growth in the next 6 to 9 months, supported by existing games and the upcoming release of Blizzard's "Diablo IV" [1] Revenue Growth - The firm predicts an 8% revenue growth for NetEase in the coming year [1] - Positive outlook on user engagement and revenue potential for another major title, "Infinity," with projected annual revenue reaching 10 billion yuan post-launch [1] Share Buyback and Stock Support - NetEase has a remaining share buyback plan of $3 billion, which is expected to provide downward support for the stock price [1] Earnings Forecast - The firm has raised its adjusted earnings per share forecast for NetEase for 2025 to 2027 by up to 4% [1] - Maintains a "Buy" rating for U.S. stocks with a target price of $166 and a target price of HK$259 for Hong Kong stocks [1]

Core Insights - NetEase reported Q3 2025 net revenue of 28.4 billion yuan, an 8.2% year-over-year increase, with net profit attributable to shareholders at 8.6 billion yuan, consistent with the previous quarter and up from 6.5 billion yuan year-over-year [1] - The company emphasized its focus on existing successful products while being cautious with new projects, ensuring they have competitive content before market release [7] Financial Performance - Q3 2025 net revenue: 28.4 billion yuan, up 8.2% year-over-year [1] - Net profit attributable to shareholders: 8.6 billion yuan, unchanged from the previous quarter and up from 6.5 billion yuan year-over-year [1] - Non-GAAP net profit: 9.5 billion yuan, consistent with the previous quarter and up from 7.5 billion yuan year-over-year [1] Game Performance and Strategy - "Dream of the Red Chamber" has a stable economic system and a rich gaming experience, attracting both returning and new players through its simplified gameplay [2] - The company has successfully launched several games in overseas markets, including "Marvel Contest of Champions" and "Yanyun Sixteen Sounds," showcasing its capability to bring Chinese themes to global audiences [3][4] - "Identity V" experienced fluctuations in revenue and daily active users but has shown improvement post-summer, with preparations for the upcoming Spring Festival [5] Future Developments - The upcoming game "Infinite" received positive feedback at the Tokyo Game Show and aims to create a new market ecosystem with high-quality content and innovative business models [6][8] - The company is investing in AI technology to enhance game development and operational efficiency, with a focus on creating unique user experiences [9] Organizational Focus - Recent personnel changes are viewed as part of an organizational optimization process, aimed at enhancing focus and efficiency in game development [7] - The company plans to concentrate resources on long-standing successful projects while cautiously evaluating new game opportunities [7]

Core Viewpoint - Citigroup's research report indicates that NetEase's FWJ PC version servers are performing strongly, while the FWJ mobile version and "Yan Yun Shi Liu Sheng" show resilience, leading to expectations that Q3 performance may meet or slightly exceed forecasts [1] Group 1: Performance Insights - The strong seasonal recovery is noted as a key factor in the expected performance [1] - The company is continuously launching new games, with four titles released in October: "Marvel Secret Law Frenzy," "Destiny: Stars," "unVEIL the World," and "StarCraft II" [1] - Upcoming releases include "Nirvana in Fire" on November 7 for overseas markets and "Diablo IV" in China on December 12 [1] Group 2: Investment Outlook - Citigroup maintains a target price of $158 for NetEase ADR and continues to rate it as a "buy," viewing it as a defensive stock in investment portfolios [1]

Group 1 - The game ETF (159869) has experienced a narrow fluctuation, currently up by approximately 0.5%, with notable stocks such as Youzu Interactive hitting the daily limit, and others like Iceberg Network and Light Media rising over 1% [1] - The game ETF has seen continuous net inflows for 11 consecutive trading days, accumulating a total of 2.195 billion yuan, indicating strong investor interest [1] - In July, the approval volume of game licenses remained high, with 127 games approved, despite a decrease of 20 from June, maintaining a robust issuance level [1] Group 2 - The gaming sector is undergoing multiple catalysts including AI, content, and commercialization model transformations, with the game ETF tracking the performance of the A-share listed companies in the animation and gaming industry [2] - The annual gaming event ChinaJoy is approaching, presenting potential investment opportunities in the game ETF [2]

Core Insights - In July, the National Press and Publication Administration approved 127 domestic and 7 imported online game licenses, highlighting a significant regulatory activity in the gaming industry [2][3] - Notable domestic games include "Kingshot" under the brand "奔奔王国," which has shown strong performance in overseas markets [3] - The total number of approved domestic games for the year reached 884, while 62 imported games were licensed as of July [3] Domestic Game Approvals - A total of 127 domestic games were approved, comprising 81 mobile games, 35 mobile-casual puzzle games, and 9 mobile-client games, along with one client game and one mobile-web game [2] - Key domestic titles include "名将传" by Giant Network, "阿尔法契约" by 4399, and "消消瓜果园" by 点点互动, among others [2] Imported Game Approvals - Seven imported games received licenses, including Tencent's "终极角逐" and NetEase's "暗黑破坏神4" (Diablo IV), which is a highly anticipated action RPG from Blizzard Entertainment [3] - "暗黑破坏神4" has gained significant attention globally since its release on June 6, 2023, and has been a notable absence in the Chinese market due to previous contractual issues [3]