＜Research＞JPM Raises NTES-S (09999.HK) 2024/25 Online Game Rev. Forecasts, Reiterates as Industry Top Pick

　　JPMorgan wrote in a research note that the lukewarm performance of NTES-S (09999.HK) -2.000 (-1.388%) Short selling $181.05M; Ratio 18.834% (NTES.US) shares since the launch of its Naraka Bladepoint Mobile game may be a sign that investors are choosing to sell at a profit after the company's outstanding stock performance over the past two months, as well as concerns over the new game's lifespan and the downside risks to the company's 2Q24 results.

　　JPM is optimistic that Naraka Bladepoint Mobile will become another flagship game of NetEase with a large user base, in addition to Eggy Party. The broker also believed Naraka Bladepoint Mobile would have a longer life cycle, and noted that feedback from gamers was generally positive.

　　Related NewsM Stanley: NetEase 'Naraka Bladepoint Mobile' Game Shoots Up Bestseller Charts Faster Than Expected

　　JPMorgan predicted that NetEase's revenue for 2Q24 will be RMB26 billion, a 9% YoY increase and 1% higher than market expectations. Adjusted net profit will be RMB8.3 billion, a 9% YoY fall and 4% higher than market expectations. Revenue from online games will be RMB19.5 billion, a 13% YoY increase but a 5% QoQ decrease. Revenue from computer games will be RMB4.2 billion, a 7% YoY and 3% QoQ decrease. Revenue from mobile games will be RMB15 billion, hiking 20% YoY but dropping 5% QoQ.

　　The broker also estimated NetEase's game revenue to reach RMB22 billion in 3Q24, an increase of 8% YoY and 13% QoQ. The broker raised its online game revenue growth forecast to 11% for this year and next year, compared to the single-digit increase as predicted by market consensus.

　　JPM reiterated NetEase as its top pick in China's online game industry. Taking into account the above factors, the broker set a target price of HK$200 for NetEase H-shares and US$130 for NetEase US shares, both of which are rated Overweight.

　　Related NewsHSBC Research Chops NTES-S (09999.HK) TP to $183 on All Eyes on 'Naraka：Bladepoint' Mobile Launch Tmr

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-26 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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