GLONGHUI September 1 | CITIC Securities released research to maintain NetEase's “buy” rating. The target price is 5.6 US dollars. Currently, Youdao's valuation is at a historically low level. Youdao's net revenue in Q2 in 2023 increased 26.2% year on year to 1.21 billion yuan; operating loss was 290 million yuan, and the year-on-year loss margin narrowed. The bank believes that a number of AI technologies are expected to drive the long-term development of Youdao's business. Youdao has been deeply involved in AI technology for many years. It has core teams in language, vision, and sound, and has developed four underlying technologies: Youdao neural network translation, computer vision, intelligent voice AI, and high-performance computing. Looking forward to the future, the company is expected to continue to combine generative AI technology with its own products and service formats to promote medium- to long-term business development.