NetEase’s Resilient Growth and Stability: Buy Recommendation Despite Revenue Miss

Miranda Zhuang, an analyst from Bank of America Securities, maintained the Buy rating on NetEase. The associated price target is $166.00.

Miranda Zhuang’s rating is based on several key factors that highlight NetEase’s potential for growth and stability. Despite a slight miss on revenue expectations, NetEase’s net profit remained consistent, showing resilience in its financial performance. The strong performance of FWJ PC in the third quarter was a positive indicator, aligning with investor expectations and contributing to the Buy rating.
Additionally, the online games and value-added services segment showed a healthy revenue growth, driven by key titles and a recovery in certain games. Although there were some declines in other segments like Cloud Music and innovative businesses, the overall profitability remained solid with a group gross profit margin of 64.1%. The extension of the share buyback program further indicates confidence in the company’s future prospects, supporting the Buy recommendation.

In another report released today, China Galaxy International also maintained a Buy rating on the stock with a $166.00 price target.