Goldman Sachs said it’s optimistic about NetEase’s performance in the second half of the year, due to continued revenue growth from new games and steady margin expansion.
The bank expected that the company’s revenue from the game business will grow by 23% year over year in the third quarter, and the blockbuster Justice Mobile will contribute 6.3 billion yuan of revenue in the quarter. The annual revenue of the game is expected to reach 14.8 billion yuan this year, it estimated.
NetEase’s total revenue is expected to grow by about 17% year over year to 28.6 billion yuan in the third quarter, accelerating significantly from the 4% growth in the second quarter, while profit margin is expected to improve further, with operating profit margin expected to reach 28%.
Looking ahead to the fourth quarter, Goldman Sachs expected NetEase’s revenue to grow 20% and EBIT to rise 64%.
Goldman Sachs raised the forecast of NetEase’s 2023 – 2025 revenue forecasts by 0.9%, 1.1% and 1.2%, non-GAAP net profit forecasts by 1.7%, 3.2% and 3%.