External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>China online game market revenue decreased 2.4% YoY but grew 22% HoH to RMB144.3bn in 1H23, according to GPC</li><li>Supported by the recovery of game supply and paying willingness, online game market revenue returned to positive growth track and was up by 12% YoY in 2Q23, with a 2-year CAGR of 2%.</li><li>We expect China online game market to maintain steady growth momentum in 2H23E, mainly due to the launch of quality new games YTD and the low-base effect. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China online game market revenue decreased 2.4% YoY but grew 22% HoH to RMB144.3bn in 1H23, according to GPCSupported by the recovery of game supply and paying willingness, online game market revenue returned to positive growth track and was up by 12% YoY in 2Q23, with a 2-year CAGR of 2%.We expect China online game market to maintain steady growth momentum in 2H23E, mainly due to the launch of quality new games YTD and the low-base effect. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – Online game sector: rebounded in 2Q23

Equity Bottom-Up

<ul><li>NetEase reported 1Q23 results on 25 May. Total revenue increased by 6% YoY to RMB25.0bn in 1Q23, in line with our/consensus estimate.</li><li>Non-GAAP net income grew by 48% YoY to RMB7.6bn in 1Q23, beating our/consensus estimate by 36/33%, mainly attributable to the solid gross margin improvement (+5pct YoY) and effective control in marketing expenses.</li><li>We raise FY23-25E non-GAAP net income forecast by 8-10% mainly on more positive games GPM outlook and operating leverage. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NetEase reported 1Q23 results on 25 May. Total revenue increased by 6% YoY to RMB25.0bn in 1Q23, in line with our/consensus estimate.Non-GAAP net income grew by 48% YoY to RMB7.6bn in 1Q23, beating our/consensus estimate by 36/33%, mainly attributable to the solid gross margin improvement (+5pct YoY) and effective control in marketing expenses.We raise FY23-25E non-GAAP net income forecast by 8-10% mainly on more positive games GPM outlook and operating leverage. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

NetEase (NTES US) – Solid mobile games and margin improvement support strong 1Q23 results

<ul><li>China’s online game market revenue was RMB22.5bn in Apr 2023, down by 2% YoY but up by 3% MoM, according to CNG.</li><li>The online game market revenue declined at a slower rate in April compared to 1Q23 (-15% YoY), mainly due to the launch of several highly-anticipated mobile games and the resilient performance of PC game market.</li><li>With the normalization of game license approval, more quality new game supply resumed in 4M23, which shall support China’s domestic online game market recovery to positive territory from 2Q23E onwards. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s online game market revenue was RMB22.5bn in Apr 2023, down by 2% YoY but up by 3% MoM, according to CNG.The online game market revenue declined at a slower rate in April compared to 1Q23 (-15% YoY), mainly due to the launch of several highly-anticipated mobile games and the resilient performance of PC game market.With the normalization of game license approval, more quality new game supply resumed in 4M23, which shall support China’s domestic online game market recovery to positive territory from 2Q23E onwards. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – April online game market recap

<ul><li>China’s online game market revenue declined by 15% YoY but increased by 16% QoQ to RMB67.5bn in 1Q23, according to CNG.</li><li>We saw an early recovering sign in March 2023, with monthly game market revenue down by only 3% YoY (versus -23%/17% YoY in Feb/Jan), thanks to more quality game launches.</li><li>Looking ahead, we are positive that online game market revenue will recover to positive YoY growth in 2Q23E, supported by the normalisation of game license approval and the launch of highly-anticipated titles like Tencent’s Metal Slug: Awakening and miHoYo’s Honkai: Star Rail. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China’s online game market revenue declined by 15% YoY but increased by 16% QoQ to RMB67.5bn in 1Q23, according to CNG.We saw an early recovering sign in March 2023, with monthly game market revenue down by only 3% YoY (versus -23%/17% YoY in Feb/Jan), thanks to more quality game launches.Looking ahead, we are positive that online game market revenue will recover to positive YoY growth in 2Q23E, supported by the normalisation of game license approval and the launch of highly-anticipated titles like Tencent’s Metal Slug: Awakening and miHoYo’s Honkai: Star Rail. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – 1Q23 online game market recap

<ul><li>Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue contribution, and 2022 Chinese New Year (CNY) holiday fell in February whilst it took place in January in 2023, which led to a tougher comp.</li><li>Smoothing out CNY impact, 2M23 online games market revenue was down 20% YoY.</li><li>As game license approval resumed, many highly anticipated game titles are lined up for launch and will lead industry recovery from 2Q23 onwards, in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue contribution, and 2022 Chinese New Year (CNY) holiday fell in February whilst it took place in January in 2023, which led to a tougher comp.Smoothing out CNY impact, 2M23 online games market revenue was down 20% YoY.As game license approval resumed, many highly anticipated game titles are lined up for launch and will lead industry recovery from 2Q23 onwards, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Internet – February online game market recap

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

China Internet – Online game sector: rebounded in 2Q23

Supported by the recovery of game supply and paying willingness, online game market revenue returned to positive growth track and was up by 12% YoY...

CMB International

NetEase (NTES US) – Solid mobile games and margin improvement support strong 1Q23 results

NetEase reported 1Q23 results on 25 May. Total revenue increased by 6% YoY to RMB25.0bn in 1Q23, in line with our/consensus estimate.

CMB International

China Internet – April online game market recap

The online game market revenue declined at a slower rate in April compared to 1Q23 (-15% YoY), mainly due to the launch of several highly...

CMB International

China Internet – 1Q23 online game market recap

We saw an early recovering sign in March 2023, with monthly game market revenue down by only 3% YoY (versus -23%/17% YoY in Feb/Jan), thanks to...

CMB International

China Internet – February online game market recap

Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue...

CMB International

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