Goldman Sachs released a report indicating that Netease (09999.HK) will launch the mobile game 'Eternal Link' on the 25th of next month, in line with the previously guided expectation of launching from July to August.

The bank pointed out that 'Eternal Link' mobile game testing has had positive feedback, including optimization of balance between picture quality and performance. Despite Tencent's (00700.HK) game 'Honour of Fight' that will absorb diverse game needs, its development is relatively early compared to 'Eternal Link', and differentiation can enable the existence of two similar high user activity games. The bank also pointed out that the release date of 'Eternal Link' mobile game is only one day apart from the release date of 'Yan Yun 16 Sheng' end-game, and believes that the release date of 'Yan Yun 16 Sheng' end-game may be adjusted, because Netease's two major game releases within two days is not in line with business logic.

The report also stated that the bank has been tracking more than 170 servers that have been in operation for more than three years, including the 'Dream of the Three Kingdoms' end-game. The token depreciation of 88 of these servers continues, but there are initial signs of improvement in the others. Based on improved fundamental factors, market expectations resetting, and valuation still only higher than the 10-year low, the bank believes that the upside risk of Netease's stock price is higher than the downside risk, and maintains a 'buy' rating with a target price of 196 yuan.