NETEASE INC(9999.HK):4Q23 MISSED; ONGOING GENRES AND GEOGRAPHICAL BREAKTHROUGH
NETEASE INC(9999.HK):4Q23 MISSED; ONGOING GENRES AND GEOGRAPHICAL BREAKTHROUGH
4Q23 total revenue grew 7% YoY to RMB27.1bn, -4% miss expectation. Core game delivered 12% YoY, contributed by 29% YoY solid mobile games. 25.3% OPM failed to meet consensus mainly due to increased S&M expenses amid fierce competition. We see Co. will unswervingly execute its globalisation game strategies in terms of genre innovations, geographical expansion, efficiency improvement, technology integration and talent recruitments. We expect domestic market will be the main growth engine in 2024-25 with overseas markets starting to shine from 2026 onwards. Along with strong and consistent capital return initiatives, maintain BUY and our TP of US$130.0/ HK$204.0 mainly on 15.0x FY2024E adj. EPADS.
23年第四季度總收入同比增長7％，達到271億元人民幣，未達到預期-4％。核心遊戲的交付量同比增長了12％，其中穩健的手機遊戲同比增長了29％。25.3％的OPM未能達成共識，這主要是由於激烈的競爭中S＆M支出增加。我們認爲，Co. 將在類型創新、地域擴張、效率提高、技術整合和人才招聘方面堅定不移地執行其全球化遊戲戰略。我們預計，國內市場將成爲2024-25年的主要增長引擎，從2026年起，海外市場將開始大放異彩。除了強勁而持續的資本回報計劃外，維持買入和130.0美元/204.0港元的目標價，主要是在經15.0倍的 FY2024E 調整後。EPADS。
Key Factors for Rating
評級的關鍵因素
Committed globalisation game vision. We see Co. will be committed to satisfy global gamers' diverse demands through gameplay innovation, content production and technology integration across game genres, terminals and geographies. We are confident on Co.'s diverse and continuous pipelines in domestic market in coming years. For overseas, Co. keeps i) patiently testing specific launched products in suitable markets ; ii) setting up global 1P studios in developed countries to work on 3A original IP; iii) recruiting global industry veterans; and iv) invest in boutique global studios. We expect new 3A titles developed by global studios will start to launch in 2026E. We cut 2024E and 2025E game revenue by 4% and 2% respectively to mainly reflect our latest assumptions on new game launch date, terminal, geography and grossing . We see Co. will continue to improve channel and cost efficiency so that we largely keep our GPM estimations unchanged despite lower revenue. We slightly nudge up our Opex assumptions in terms of S&M and R&D expenses.
堅定的全球化遊戲願景。We see Co. 將致力於通過遊戲創新、內容製作以及跨遊戲類型、終端和地區的技術整合，滿足全球玩家的多樣化需求。我們對公司充滿信心。”未來幾年國內市場將有多樣而持續的管道。對於海外，Co. 保持 i) 耐心地在合適的市場測試特定推出的產品；ii) 在發達國家設立全球1P工作室以開發3A原創IP；iii) 招募全球行業資深人士；iv) 投資精品全球工作室。我們預計，全球工作室開發的新3A遊戲將在2026年開始推出。我們將2024E和2025E遊戲收入分別削減了4％和2％，這主要反映了我們對新遊戲發佈日期、終端、地理位置和收入的最新假設。我們認爲Co. 將繼續改善渠道和成本效率，因此，儘管收入減少，但我們的GPM估計值基本保持不變。我們在S&M和研發費用方面的運營支出假設略有上調。
4Q23: Failed to meet demanding top and bottom line expectations. Total revenue grew 7% YoY to RMB27.1bn, -4% miss consensus/ BOCIe. Core online game delivered 12% YoY to RMB19.5bn, with mobile and PC game logging 29% YoY and -23% YoY respectively. Non-game revenue (including game related VAS) dropped by 3% YoY to RMB7.6bn. GPM was relatively flattish QoQ to reach 62.0%, above consensus and in line with BOCIe. OPM was 25.3%, missing streets' expectation of 28.2% mainly due to increased S&M expenses amid fierce competition. Deferred revenue excluding Youdao was RMB12.3bn (up 7% YoY). Co. has utilised 13% (vs. 12% as of end Sep) of its 3-year US$5bn share buyback quota before Jan 2026 as of end Dec. Co. has increased its dividends payout ratio to over 75% this quarter from roughly 30% previously.
4Q23：未能滿足苛刻的收入和利潤預期。總收入同比增長7％，達到271億元人民幣，-4％未達成共識/中銀國際。核心在線遊戲同比增長12％至195億元人民幣，其中移動和電腦遊戲同比分別增長29％和-23％。非遊戲收入（包括遊戲相關增值稅）同比下降3％，至76億元人民幣。GPM的季度環比相對平緩，達到62.0％，高於市場預期，與BoCie持平。OPM爲25.3％，未達到街道預期的28.2％，這主要是由於在激烈的競爭中S＆M支出增加。不包括有道的遞延收入爲人民幣123億元（同比增長7％）。截至2026年1月底，公司已利用其3年期50億美元股票回購配額中的13％（截至9月底爲12％）。公司已將其股息支付率從之前的約30％提高到本季度的75％以上。
Key Risks for Rating
評級的主要風險
Downside risks: i) weak macro and online discretionary spending recovery; ii) game regulations; iii) competition; iv) destructive investments; v) dampened partnerships; and vi) ADR delisting.
下行風險：i）宏觀和在線全權支出復甦疲軟；ii）遊戲監管；iii）競爭；iv）破壞性投資；v）夥伴關係受抑制；vi）ADR退市。
譯文內容由第三人軟體翻譯。