China's NetEase Q4 revenue rises on self-developed games

Overview

• China internet and game services provider's Q4 revenue rose 3% yr/yr

• Q4 net income fell compared to previous quarter and yr/yr

• Company extended share repurchase program for additional 36 months

Outlook

• NetEase plans to deepen collaboration with partners worldwide to enhance its global presence

• Company focuses on AI integration to improve game development and production efficiency

• NetEase aims to extend franchise longevity through creative talent and AI advancements

Result Drivers

• AI INTEGRATION - Co achieved comprehensive integration of AI across game development, enhancing production efficiency and gameplay innovation

• GAME PORTFOLIO EXPANSION - Global launch of Sword of Justice and traction for Where Winds Meet boosted engagement

• SELF-DEVELOPED GAMES - Higher revenues from self-developed games like Fantasy Westward Journey Online contributed to growth

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", no "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for NetEase Inc is HK$245.50, about 27.2% above its February 10 closing price of HK$193.00

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release: ID:nPn3MYRx6a

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