Bocom International raised target price of NetEase’ H-shares to HK$181 from HK$164, citing more certain game growth
COMPANY NEWS STOCKS VIEWS & ANALYSIS
Bocom International raised target price of NetEase’ H-shares to HK$181 from HK$164, citing more certain game growth
COMPANY NEWS STOCKS VIEWS & ANALYSIS

Bocom International raised target price of NetEase’ H-shares to HK$181 from HK$164, citing more certain game growth

 

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NetEase has recently launched several mobile phone games, including “Racing Master” (June 20) and “Harry Potter: Magic Awakened” (June 27, in Japan), while “Justice Mobile” opened for pre-download on June 26 (to be officially launched on June 30), said Bocom International in a note.

As the pace of regulatory approval normalizes, NetEase’s mobile game revenue is expected to maintain double-digit growth with strong certainty, it said.

The company’s new game launch is expected to drive its mobile game revenue to grow 16% and 26% year over year in the third and fourth quarters, and the annual growth rate of mobile game revenue is estimated to reach 18% and 15% in the next two years, the bank estimated. 

In addition, the broker raised the forecast of NetEase’s revenue and profit in 2024 by 5% and 4% respectively, based on a more certain outlook for game growth.  Based on next year’s 18x P/E ratio (historical average) for the gaming business, the broker raised the H-share target price of NetEase from HK$164 to HK$181 and kept its Buy rating.