Bank of China International released a report stating that netease (09999.HK) had mixed performance in the third quarter, with strong PC gaming supporting short-term gaming business, and the target price increased from 151 yuan to 165 yuan. The company's continued stable buyback execution and quarterly dividend policy maintain a 'buy' rating.

The report points out that netease's total revenue in the third quarter decreased by 4%, lower than the market's expected 1%. The market was surprised by a 10% year-on-year decrease in mobile gaming revenue, a 29% year-on-year increase in client gaming revenue, and a 2% year-on-year increase in cash receipts. The operating profit margin of 27.3% was slightly below market expectations.

Bank of China International predicts that due to the unexpected return contribution of Blizzard games and the launch of several new in-house PC games, client gaming revenue will maintain a year-on-year growth rate of over 30% in the next three quarters. However, mobile gaming revenue will only turn into positive year-on-year growth after the second quarter of next year.