Yamato believes that the new games that NetEase S (09999) will launch in the future will be a short-term catalyst for stock prices.
The Zhitong Finance App learned that Yamato released a research report stating that while maintaining the NetEase S (09999) “buy” rating, the target price was raised from HK$215 to HK$220.
According to the report, the company's quarterly dividend for the fourth quarter of last year was higher than expected, and it is believed that new games that will be launched in the future, such as “Legend of the Condor” in the end of March and “16 Sounds of Yan Yun” in the second quarter, will be a short-term catalyst for stock prices.
The bank pointed out that NetEase's gross profit margin for online games last quarter was 69.5%, up 10.4 percentage points from the previous year. It mainly benefited from the increase in revenue contributions from its own games and non-Android distribution channels. Based on its strong game product line, revenue from already launched games is also stable, and it is still optimistic about NetEase's profit prospects.