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.

Equity Bottom-Up

<ul><li>NetEase announced 3Q23 financial results on 16 Nov: total revenue increased by 12% YoY to RMB27.3bn, largely in line with our/consensus estimate of RMB28.2/27.3bn; operating income grew by 59% YoY to RMB7.6bn, beating our/consensus estimate by 9/4%, mainly due to enhanced games GPM (+4.0ppt YoY) on optimized channel costs and favourable revenue mix shift.</li><li>Looking ahead, we expect total revenue growth to further accelerate in 4Q23, underpinned by the strong performance of new game titles.</li><li>NetEase’s quality game pipeline, with several highly-anticipated titles to be launched by 2Q24E, will also support its healthy revenue growth in 2024E, 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.

NetEase announced 3Q23 financial results on 16 Nov: total revenue increased by 12% YoY to RMB27.3bn, largely in line with our/consensus estimate of RMB28.2/27.3bn; operating income grew by 59% YoY to RMB7.6bn, beating our/consensus estimate by 9/4%, mainly due to enhanced games GPM (+4.0ppt YoY) on optimized channel costs and favourable revenue mix shift.Looking ahead, we expect total revenue growth to further accelerate in 4Q23, underpinned by the strong performance of new game titles.NetEase’s quality game pipeline, with several highly-anticipated titles to be launched by 2Q24E, will also support its healthy revenue growth in 2024E, 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.

NetEase (NTES US) – Games Revenue Growth Accelerated with Solid Margin Expansion

<ul><li>NetEase announced 2Q23 financial results on 24 Aug: total revenue grew by 3.7% YoY to RMB24.0bn, below our/consensus estimate by 3.4/3.1%, mainly due to softer-than-expected PC game performance.</li><li>But operating income was up 23% YoY to RMB6.1bn, ahead of our/consensus estimate by 7.8/6.5%, supported by the strong GPM improvement (+4.0pct YoY and beat consensus by 2.7pct).</li><li>We raise FY23-25E operating income forecast by 6-8% to reflect the more positive GPM outlook, mainly due to the favourable revenue mix shift to self-developed games and optimized channel costs. </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 announced 2Q23 financial results on 24 Aug: total revenue grew by 3.7% YoY to RMB24.0bn, below our/consensus estimate by 3.4/3.1%, mainly due to softer-than-expected PC game performance.But operating income was up 23% YoY to RMB6.1bn, ahead of our/consensus estimate by 7.8/6.5%, supported by the strong GPM improvement (+4.0pct YoY and beat consensus by 2.7pct).We raise FY23-25E operating income forecast by 6-8% to reflect the more positive GPM outlook, mainly due to the favourable revenue mix shift to self-developed games and optimized channel costs. 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) – Upbeat on games revenue growth and margin expansion in 2H23E

<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

Thematic (Sector/Industry)

<ul><li>China’s online game market revenue grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY), according to CNG.</li><li>The strong YoY growth was mainly due to the launch of new games and low-base effect.</li><li>Overseas revenue from China’s self-developed games also returned to positive growth track in July (+7.6% YoY), thanks to the solid performance of Tencent’s and NetEase’s overseas mobile games. </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 grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY), according to CNG.The strong YoY growth was mainly due to the launch of new games and low-base effect.Overseas revenue from China’s self-developed games also returned to positive growth track in July (+7.6% YoY), thanks to the solid performance of Tencent’s and NetEase’s overseas mobile games. 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 – July online game market recap

<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

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.

NetEase Inc (NTES US)

NetEase (NTES US) – Games Revenue Growth Accelerated with Solid Margin Expansion

NetEase’s quality game pipeline, with several highly-anticipated titles to be launched by 2Q24E, will also support its healthy revenue growth in...

CMB International

NetEase (NTES US) – Upbeat on games revenue growth and margin expansion in 2H23E

NetEase announced 2Q23 financial results on 24 Aug: total revenue grew by 3.7% YoY to RMB24.0bn, below our/consensus estimate by 3.4/3.1%

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 – July online game market recap

China’s online game market revenue grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY),...

CMB International

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