CICC: Raised Netease's target price to 225 Hong Kong dollars, first quarter performance overall better than expected.

CICC released a report stating that NetEase announced its first quarter financial results, with revenue increasing by 7% year-on-year to 28.8 billion yuan; Non-GAAP net profit increased by 32% year-on-year to 11.2 billion yuan, exceeding the bank's and market expectations. The bank believes this is mainly due to better-than-expected performance in game revenue and a greater-than-expected level of expense savings. The company also announced a first quarter dividend of $0.675/ADS, with a total quarterly dividend of $428 million, representing a 30% dividend payout ratio. Due to the company's efficient cost control, the bank raised its 2025 and 2026 Non-GAAP net profit forecasts by 6% each to 36.8 billion/38.2 billion yuan, maintaining a "outperform industry" rating due to adjusted profit forecasts and the stable and premium game business. The target prices were both raised by 25% to 225 Hong Kong dollars and 145 US dollars.