Bank of China International expects NetEase (09999)'s adjusted net profit for the 2024 fiscal year to increase 2% year-on-year to RMB 33.4 billion.
The Zhitong Finance App learned that Bank of China International released a research report saying that maintaining the NetEase S (09999) “buy” rating, considering the potentially diluted gross margin of the game and the increase in operating expenses due to the return of Blizzard, the adjusted net profit for the 2024 fiscal year is expected to increase 2% year-on-year to 33.4 billion yuan, with a target price of HK$204.
The bank expects NetEase's overall and core online game revenue for the first quarter to rise 7% year over year. Among them, mobile game revenue remained stable, with a year-on-year increase of 15%. The gross margin and operating margin were 62.2% and 29.6% respectively, both in line with market expectations. The bank expects that Blizzard Games will resume operations in the mainland this summer, and that the deepening partnership with Microsoft Games will not only help increase users and revenue, but also unlock medium- to long-term potential.