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 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><p><em>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.</em></p>

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>NetEase reported 4Q22 results on 23 Feb. 4Q22 revenue was up by 4% YoY to RMB25.4bn, in line with our and consensus estimate.</li><li>Full-year revenue in FY22 grew by 8% YoY to RMB96.5bn. Non-GAAP net income declined by 27% YoY to RMB4.8bn in 4Q22, lower than the consensus estimate of RMB5.2bn, primarily due to the lower-than-expected gross margin.</li><li>Overall GPM was down by 0.8pct YoY to 52.2% (vs. consensus 55.2%) in 4Q22, mainly due to the oneoff recognition of c.RMB1bn royalty fees related to certain licensed games (c.4% of total revenue). </li></ul><p><em>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.</em></p>

NetEase reported 4Q22 results on 23 Feb. 4Q22 revenue was up by 4% YoY to RMB25.4bn, in line with our and consensus estimate.Full-year revenue in FY22 grew by 8% YoY to RMB96.5bn. Non-GAAP net income declined by 27% YoY to RMB4.8bn in 4Q22, lower than the consensus estimate of RMB5.2bn, primarily due to the lower-than-expected gross margin.Overall GPM was down by 0.8pct YoY to 52.2% (vs. consensus 55.2%) in 4Q22, mainly due to the oneoff recognition of c.RMB1bn royalty fees related to certain licensed games (c.4% of total revenue). 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) – Aiming for long-term growth

<ul><li>NetEase announced its 3Q22 results on 17 Nov. Total revenue grew by 10% YoY to RMB24.4bn in 3Q22, in line with our &amp; consensus estimates of RMB24.4bn.</li><li>Driven by resilient performance of legacy titles and launch of new titles like Diablo Immortal, total revenue was up 13% YoY in 9M22.</li><li>Non-GAAP net income in 3Q22 grew by 23% YoY to RMB4.7bn (excl. RMB2.7bn extraordinary gains like investment income and FX gain), which is largely in line with our/consensus estimates of RMB5.0/4.9bn.</li></ul><p><em>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.</em></p>

NetEase announced its 3Q22 results on 17 Nov. Total revenue grew by 10% YoY to RMB24.4bn in 3Q22, in line with our &amp; consensus estimates of RMB24.4bn.Driven by resilient performance of legacy titles and launch of new titles like Diablo Immortal, total revenue was up 13% YoY in 9M22.Non-GAAP net income in 3Q22 grew by 23% YoY to RMB4.7bn (excl. RMB2.7bn extraordinary gains like investment income and FX gain), which is largely in line with our/consensus estimates of RMB5.0/4.9bn.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 Inc. (NTES US) – Preparing for next strong product cycle

<div><div><div><div><ul><li>NetEase delivered sturdy revenue growth of 13.8% YoY in 1H22, driven by resilient performance of its legacy titles and the launch of several key titles in 2H21.</li><li>We forecast total revenue growth of 7.3/6.3% YoY in 2023/2024E, but the growth could be accelerated by several highly-anticipated titles in the pipeline and enhanced overseas games market expansion strategy.</li><li>Supported by its game business’ steady profit margin and cash flow generation capability, NetEase is well-positioned to invest for long-term quality growth, expanding into international markets, focusing on quality games development, and cultivating tenacious user community.</li></ul><p><em>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.</em></p></div></div></div></div>

NetEase delivered sturdy revenue growth of 13.8% YoY in 1H22, driven by resilient performance of its legacy titles and the launch of several key titles in 2H21.We forecast total revenue growth of 7.3/6.3% YoY in 2023/2024E, but the growth could be accelerated by several highly-anticipated titles in the pipeline and enhanced overseas games market expansion strategy.Supported by its game business’ steady profit margin and cash flow generation capability, NetEase is well-positioned to invest for long-term quality growth, expanding into international markets, focusing on quality games development, and cultivating tenacious user community.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 Inc. (NTES US) – Sturdy Game and Content Developing Leader

<ul><li>Meta hosted the Meta Connect 2022 on 11 Oct, launching its first high-end VR headset Meta Quest Pro.</li><li>The new VR headset will begin shipping on 25 October for US$1,499.99.</li><li>With innovative features like pancake lenses, eye tracking, natural facial expressions and colour passthrough, Meta Quest Pro will meaningfully enhance the social/gaming/work VR experience in our view.</li></ul><p><em>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.</em></p>

Meta hosted the Meta Connect 2022 on 11 Oct, launching its first high-end VR headset Meta Quest Pro.The new VR headset will begin shipping on 25 October for US$1,499.99.With innovative features like pancake lenses, eye tracking, natural facial expressions and colour passthrough, Meta Quest Pro will meaningfully enhance the social/gaming/work VR experience 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 Sector – Meta Connect 2022: bridging the gap towards metaverse

China

NetEase is a Chinese Internet technology company that provides online services across various sectors. Its core businesses include the development and operation of desktop and mobile games, alongside services in news aggregation, music streaming (NetEase Cloud Music), online education (Youdao), advertising, email, and e-commerce (Yanxuan). The company is headquartered in Hangzhou, China, and was founded in June 1997.

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NetEase (9999 HK)

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

Netease (NTES US) – Aiming for long-term growth

NetEase reported 4Q22 results on 23 Feb. 4Q22 revenue was up by 4% YoY to RMB25.4bn, in line with our and consensus estimate.

CMB International

NetEase Inc. (NTES US) – Preparing for next strong product cycle

NetEase announced its 3Q22 results on 17 Nov. Total revenue grew by 10% YoY to RMB24.4bn in 3Q22, in line with our & consensus estimates of RMB24.4bn.

CMB International

NetEase Inc. (NTES US) – Sturdy Game and Content Developing Leader

NetEase delivered sturdy revenue growth of 13.8% YoY in 1H22, driven by resilient performance of its legacy titles and the launch of several key...

CMB International

China Internet Sector – Meta Connect 2022: bridging the gap towards metaverse

With innovative features like pancake lenses, eye tracking, natural facial expressions and colour passthrough, Meta Quest Pro will meaningfully...

CMB International

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