Goldman Sachs: Reaffirms "Buy" rating on NetEase, slightly lowers revenue and profit forecasts.

Goldman Sachs released a research report indicating that the recent pressure on NetEase's stock price may stem from market concerns about the slowing growth of game revenue in the near term, the high base effect facing profit margins in the fourth quarter of 2025 and the first quarter of 2026, and worries about the potential impact of the Genie 3/AI game creation tool. For the upcoming fourth quarter performance in 2025, Goldman Sachs expects NetEase's online game revenue to grow by 9% year-on-year, and adjusted pre-tax profits to increase by 10% year-on-year. The stock is currently trading at a forecasted P/E ratio of 14 times for 2026, lower than its historical average over the past five years. The bank believes there is limited room for further decrease in its valuation multiple. Goldman Sachs slightly lowered NetEase's revenue forecast for 2025-2027 by approximately 1%, to reflect a bias towards the latter half of this year and next year; and reduced profit forecasts for 2025-2027 by around 3% to account for slowing profit margin expansion on a high base effect. Goldman Sachs reiterated a "buy" rating on NetEase, with the H-share target price lowered slightly from HK$266 to HK$264, and the US stock target price reduced from $170 to $169.