Jinwu Financial News | According to Huaan Securities Research, NetEase (09999)'s revenue for the first quarter was 26.852 billion yuan, an increase of 7.2% over the previous year. The agreed forecast was 26.966 billion yuan, which is basically in line with market expectations. Net profit (non-GAAP) of $8.511 billion, up 12.5% year over year. The agreed forecast was $8.218 billion, exceeding market expectations. Revenue from games and related value-added services was $21.5 billion, up 7.0% year over year. Youdao's revenue was 1.4 billion yuan, up 19.7% year over year. Cloud Music's revenue was 2 billion yuan, up 3.6% year over year. Revenue from innovation and other businesses was 2 billion yuan, up 6.1% year over year. Gross profit was 17 billion yuan, up 14.2% year over year. The total operating expenses were 9.4 billion yuan, an increase of 22.4% over the previous year.
Recently, NetEase's popular games have been released in more regions, continuing to expand its influence. Reserve games include: “16 Sounds of Yan Yun”, “Eternity” mobile game, “Seven Day World”, and “Marvel Clash”. In addition, NetEase has renewed its distribution agreement with Blizzard Entertainment to bring games that players love back to the Chinese market, and will cooperate more extensively with Microsoft Games. The bank said that the “Endless” mobile game will drive future growth.
The bank estimates net profit (non-GAAP) for CY24/25/26 to be 380.32/441.92/48.883 billion yuan, respectively. The previous forecast value for CY24/25/26 was 373.04/413.19/44.48 billion yuan, respectively. Maintain an “Overweight” rating.