Goldman Sachs published a report stating that the market is concerned about the sustainability of the NetEase game “FWJ,” while the revenue of “Legend of the Shooter” falls short of expectations, and there is not much information on the release date of the “16 Sounds of Yan Yun” mobile game, all of which affected stock price performance. The bank expects NetEase's revenue growth to slow in the first quarter. Among them, game revenue increased by 4%, but profitability is still increasing. Net profit is estimated to increase by 10% to 8.3 billion yuan year-on-year. Among them, mobile game revenue was lowered from an expected 12% increase to an increase of 11%, and PC game revenue was lowered from an expected 7% year-on-year decline to a 14% drop.
In addition, the bank lowered NetEase's revenue forecast for 2024 to 2026 by 2.1% to 2.6% to reflect the impact of “FWJ” revenue pressure and the delay in the launch of the “16 Sounds of Yan Yun” mobile game. However, it is expected that the company's game revenue will accelerate in the middle of the year. Once the “Eternity Is Forever” mobile game set a release date, the market will switch to focusing on the release of new games such as “Eternity” and “16 Sounds of Yanyun” between May and July. The bank indicated that NetEase's current price is equivalent to 13 times the predicted price-earnings ratio this year, and the risk return is attractive. It maintains its “buy” rating. The target price was lowered from HK$210 to HK$202.