网易-S(09999.HK)2023游戏发布会:以游戏匠心升级产品力 11款新品多元亮眼

NetEase - S (09999.HK) 2023 Game Conference: Upgrading Product Power with Game Ingenuity, 11 New Products, Diverse and Exciting

中金公司 ·  05/21  · Researches

The company's recent situation

NetEase held the “To the Future with Love” 2023 NetEase Game Conference on May 20. At the press conference, the Chinese venue announced the status of 11 new games, including the “Against the Cold Water” mobile game, and also released the latest news on flagship products such as “Egg Party” and “Dream Westward Journey”. The conference also has English and Japanese venues, and plans for international and Japanese versions of various products such as “Egg Party” and “Harry Potter” will also be released.


Flagship IP continues to build brand power and open up new development paths through “co-creation”. The press conference opened with “Egg Party” to announce the product's new party season on May 26 and anniversary events in June. Flagship IPs such as “Dream” and “Big Talk” are concentrated in terms of cultural tourism linkage and new technology, respectively. In addition, NetEase repeatedly emphasized “co-creation” with game users at this press conference, such as launching the racing park editor in “Ace Racing”, and the new game “Mission Zero” also announced the beginning of recruiting players to form a co-creation group. We think the company has already implemented UGC in “Egg Boy” before, which is expected to further expand the influence of co-creation.

A variety of new tours have appeared, and innovative power in segmenting the circuit continues to emerge. 11 new products were announced at the press conference: 1) The blockbuster new product of the year “Against Water Cold” mobile game was released on 6/30. 2) New official announcement and testing files: the mobile game “Amazing Pioneer” for post-apocalyptic survival, the mobile game “Amazing Pioneer” 6/8 beta, the mobile racing game “Pinnacle Speed” 6/20 beta, and the action mobile game “Three Kingdoms: Chronicles of the Three Kingdoms” in July (file-deleted billing test starts 5/18). 3) New test schedule: The competitive basketball mobile game “All Star Streetball Party” 6/16 paid file deletion test. 4) Other new products: Big World Martial Arts RPG “Shooter” (the company said it will start a new round of testing soon), the otherworldly fantasy adventure game “Kuki: Journey to the Wind”, the asymmetric competitive sneak competition mobile game “Mission Zero”, the turn-based card RPG “Assault: Shadow Legends”, the magical adventure MMO “Dragon Realm”, and the next-generation third-person shooter “Code 56” (Beiloshimen Studio, initial recruitment, the company expects to test in July).

Promote the international layout through a multi-dimensional approach, and enhance the international characteristics of products. While the company continues to promote studio layout overseas, Sakura Studio (located in Shibuya+Guangzhou) also further showed the studio status at the Chinese venue of this conference. Previously, it was announced that 3 games were under development. On the other hand, the company's new product development is also actively introducing overseas resources. For example, “Code 56” has Hans Jimmer and his team involved in music production, and the game production team also has the original scene designer for “America's End 2.” We believe that the company has global positioning considerations in all aspects such as team and product elements, which is expected to continue to enhance the company's international influence. In addition, the news of 9/8 new products (Table 2) and the strategic plan for global e-sports events were announced separately at the English and Japanese forums of the conference.

Profit forecasting and valuation

Maintain the 2023/24 earnings forecast. The current Hong Kong/US stock prices all correspond to the 2023/24 non-GAAP P/E 16/14 times, respectively. Maintaining an outperforming industry rating and a target price of HK$175/$112 based on the SOTP valuation method correspond to the 2023/24 non-GAAP P/E of Hong Kong/US stocks 22/20 times, respectively. Upside space 26%/28%.


The macroeconomic economy is sluggish, regulatory policies are becoming stricter, the game's launch process or performance has fallen short of expectations, cost investment has exceeded expectations, and overseas competition has intensified.

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