Bank of China International released a research report stating that maintaining the NetEase S (09999.HK) “buy” rating takes into account the potentially diluted gross margin of the game and the increase in operating expenses due to the return of Blizzard. It is estimated that adjusted net profit for the 2024 fiscal year will increase 2% year-on-year to a target price of RMB 33.4 billion at a target price of HK$204 billion. The bank expects NetEase's overall and core online game revenue to rise 7% year-on-year in the first quarter. Among them, mobile game revenue remained stable and increased 15% year over year. The gross margin and operating margin of 62.2% and 29.6%, respectively, are in line with market expectations. The bank expects Blizzard Games to resume operations in the mainland this summer and that the deepening partnership with Microsoft Games will not only help increase users and revenue, but also unlock medium- to long-term potential.