Goldman Sachs: Pay attention to the mobile version of NTES-S (09999) "Nihhuang" on January 9th, 2025, the performance prospects will be even clearer.

Goldman Sachs released a research report stating that in the coming months, it is expected that NTES-S(09999) will achieve accelerated revenue growth compared to the third quarter, and the performance outlook for 2025 will be clearer. The firm believes that the release of these new games will further drive strong growth in the PC gaming business, especially since the return of Blizzard in August 2024. The firm predicts that with more games (including "Marvel Frontline", "Fragpunk", and other games exclusively distributed by NetEase) being globally released, NetEase's global game sales will also increase significantly in 2025. The main points of the report are as follows: NetEase launched the PC version of "Justice" on December 27th and plans to release the mobile version on January 9th next week. The firm summarized the main user feedback/opinions on the game as follows: Overall, they saw a differentiated gaming experience that combines single-player content and multiplayer game modes. The firm continues to predict that the game will generate 4.2 billion RMB in revenue in the first month, although considering the monetization design (mainly through character appearances, etc.), it believes that the game may have a slow upward revenue cycle when there are enough players participating in the game content. Positive feedback includes: 1) Rich and authentic Chinese martial arts art style content suitable for single player mode; 2) High degree of freedom and open world style; 3) Mild monetization strategy in the early stages. Some users are concerned about the combat mechanics design around players compared to other ARPG PC/console games. The firm believes that the balance and integration of single-player and multiplayer game types remains a key area for improvement. Future events to watch for NetEase: 1) January 9th, release of "Justice" mobile version: The firm believes that user indicators are more important in the early stages compared to overall rankings, and the promotion intensity of the mobile version release should be higher than the previous week's PC version release promotion restrictions. 2) Performance and promotion during Chinese New Year, especially "Egg Party": During the 2024 Chinese New Year, the competition in party game types is fierce, and marketing expenses are increasing. The firm expects more targeted spending during this period; however, the outcome of the revival or Egg Party titles (targeted at stricter teenage user requirements) will be key for this year's holiday season. 3) User testing feedback for "Project Mugen": The firm believes this is the most important single game pipeline that NetEase may launch in 2026. This means that progress updates/test feedback are also important throughout 2025. 4) Global release of "Fragpunk" on March 6th: This is an innovative PVP shooting game developed by NetEase, targeting global PC platform players. The market's expectations for this game are currently not high.