China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[NetEase (NTES US, BUY, TP US$122) TP Change]: C4Q24 Review: Getting Ready for Accelerated Growth

[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Growth Rebounds Ahead from Both PC and Mobile

[NetEase, Inc. (NTES US, BUY, TP US$110) TP Change]: C3Q24 Preview: Revenue Miss but Is Temporary

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Equity Bottom-Up

<ul>
<li>NetEase reported C1Q25 revenue, GAAP operating profit and GAAP net income in line, 25% and 31% vs. our estimates, and in line, 29% and 30% vs. consensus. </li>
<li>The game revenue up cycle was as we predicted, but the surprise came from AI-enhanced advertising and organizational streamlining, leading to operation margin improvements.</li>
<li>With game revenue up cycle still in full swing, we incline to keep NTES on the TOP BUY list and raise TP from US$122 to 136.</li>
</ul>


NetEase reported C1Q25 revenue, GAAP operating profit and GAAP net income in line, 25% and 31% vs. our estimates, and in line, 29% and 30% vs. consensus. 
The game revenue up cycle was as we predicted, but the surprise came from AI-enhanced advertising and organizational streamlining, leading to operation margin improvements.
With game revenue up cycle still in full swing, we incline to keep NTES on the TOP BUY list and raise TP from US$122 to 136.


[NetEase, Inc. (NTES US, BUY, TP US$136) TP Change]: C1Q25 Review: Game Upcycle + Margin Leverage

NetEase Inc

[NetEase, Inc. (NTES US, BUY, TP US$136) TP Change]: C1Q25 Review: Game Upcycle + Margin Leverage