CICC: Maintains "outperform" rating on NTES-S (09999), target price raised to HK$180.

Guotai Junan Securities released a research report stating that they will maintain a "Outperform Industry" rating for NTES-S (09999), considering the impact of exchange gains in 4Q24. They have raised the Non-GAAP net profit for 24 to 317 billion yuan, an increase of 2%. They are keeping the Non-GAAP net profit forecast for 25/26 unchanged, and have raised the target price by 4% to 180 Hong Kong dollars. The bank predicts that the company's 4Q24 Non-GAAP net profit attributable to shareholders will increase by 7% to 7.9 billion yuan. Key points from Guotai Junan Securities: The bank expects continued high double-digit year-on-year growth in PC games in 4Q24. For mobile games, they predict that in 4Q24, the performance of games such as "Fantasy Westward Journey" and "Identity V" will remain stable, with additional contributions from "Hearthstone." For PC games, they expect "Eternal" and other Blizzard PC products to maintain good performance, and "Marvel Duel" may create incremental growth. The year-on-year growth rate of PC games in 4Q24 may remain high double-digit, with slight sequential growth. In 1H25, the focus will be on the global expansion of PC shooting games "Marvel Duel" and "Vanguard Outrider." Revenue growth in 2025 core focuses: The bank highlights that "Marvel Duel" set a new single-day record for online users on 1/11 with over 600,000 people, showing high heat on overseas live streaming platforms. Expectations for annual revenue continue to be revised upward, and they are monitoring the sustainability of user activity and commercialization level. "Vanguard Outrider" (5v5 first-person hero shooting card PC game) will launch globally on 3/7; as of 1/17, according to the official website, global reservations have exceeded 7.5 million. As of 1/13, "Sixteen Songs of Swallows" has surpassed 10 million users, with the mobile version meeting expectations in terms of ranking. Positive feedback on art and single-player gameplay experience, with ongoing adjustments in commercialization, restrained purchases, and focus on the subsequent gaming operations. Other developments include the return of Blizzard-related games ("Overwatch" will launch on China servers in February) and "Seven Days World" (mobile version will launch in April 2025). Looking ahead to 2025 and beyond, the company has also reserved products such as "Infinite," "Codename: Odyssey," and "Land of the Broken," which have breakthrough potential in their respective niches.