On June 19th, Jefferies released a research report analyzing Netease's (09999/NTES.US) "Fantasy Westward Journey" PC version adjustment is beneficial for the game's long-term development, and the DAU before and after the adjustment remains stable. The current market concerns are exaggerated reactions.
According to the Finance and Economics app, on June 19th, Jefferies released a research report analyzing that Netease's (09999) "Fantasy Westward Journey" PC version adjustment is beneficial for the game's long-term development, and the DAU before and after the adjustment remains stable. Current market concerns are exaggerated reactions. Based on Netease's strength in game self-research and development, multiple long-term boutique products have achieved high revenue innovations, and games such as "Seven Worlds", "Yanyun Sixteen Songs", and "Endless Forever" have been steadily developed. The bank believes that the game combination has steady prospects and maintains a "buy" rating for Netease.
Jefferies pointed out in the research report that the current Netease stock price is over-adjusted. Measures such as restricting high-value virtual weapon transactions are aimed at promoting the healthy development of the game community, and the devaluation of game currency is also within controllable expectations. After the adjustment, the DAU of the game remained stable. In addition, the adjustment occurred in the first quarter of this year, and the concern of the market for the continued weak performance of the game in the second quarter is an overreaction.
The bank pointed out that Netease has strong execution capabilities in game development. In addition to the current "Fantasy Westward Journey" mobile game, "Identity V", "Egg Party", and PC version of "Endless Forever", many new games such as "Seven Worlds", "Endless Forever" mobile game, and "Yanyun Sixteen Songs" are in development. They believe that the game combination has a steady prospect, maintain a "buy" rating, and a target price of HKD 19.
Netease's Q1 2024 financial report showed that gaming and related value-added services accounted for RMB 21.5 billion in revenue, of which long-term operating products such as "Fantasy Westward Journey" mobile game and "Identity V" achieved record-high revenue, and multiple new games are eagerly awaited. "Seven Worlds" entered the top ten on the global Steam wishlist. The official version of the PC side will be released on July 10th for global public beta, and the first launch will be available on the official website PC, Steam, and Epic platforms. The domestic version of "Yanyun Sixteen Songs" will be released on July 26th for public beta. The mobile game of "Endless Forever" has more than 25 million reservations on the entire network and is expected to be launched in the summer.