Citi: NetEase's fourth-quarter revenue and profits missed expectations, giving it a target price of $168 and a "buy" rating.

Morgan Stanley's research report stated that NetEase's fourth quarter revenue in 2025 is expected to increase by only 3% annually to 27.5 billion yuan, with online gaming revenue expected to increase by 4% annually to 21.3 billion yuan, which is 6% lower than the bank's expectations due to slow revenue recognition. The bank estimated that total game revenue would increase by 10% annually, which is a very healthy growth level. Deferred revenue is expected to increase by 34% annually to 20.5 billion yuan, reaching a new high. Non-GAAP net profit is expected to decrease by 27% annually to 7.1 billion yuan, which is 25% lower than the bank's expectations, with half attributed to delayed revenue recognition and the other half attributed to losses from the valuation of equity investments based on market value. In terms of shareholder returns, the company announced a dividend of $1.16 per ADS share, with a dividend payout ratio of 84%, higher than the average payout ratio of 30%, aimed at compensating for limited share buybacks during the 2025 period. The bank has set a target price of $168 for NetEase's American stock and maintains a "buy" rating.