JP Morgan: Upgrades rating on NTES-S (09999) to "Overweight" with a target price of 170 HKD.

J.P. Morgan released a research report stating that NTES-S(09999) game revenue will resume positive growth starting in the first quarter of 2025. With the current stock price at the lowest price-to-earnings ratio (P/E) in ten years at 11 times, it provides investors with a good opportunity to enter the market. They have given NetEase a "hold" rating with a target price of HK$170, and have listed it as a preferred stock in the digital entertainment industry. In terms of NetEase's game business performance, NetEase reintroduced Blizzard's "Hearthstone" in September of this year. It is expected that the game will generate revenue exceeding RMB 1.5 billion in the fourth quarter of 2024. In addition, revenue from "Identity V" continues to grow, reaching as high as third place in the iOS revenue ranking. NetEase's game revenue is expected to resume positive growth in the first quarter of 2025, with the game revenue growth rate expected to accelerate from 4% in 2024 to 8% in 2025.