Yamato: Netease's game revenue in the third quarter is expected to improve compared to the previous quarter, maintaining a buy rating.

The Daiwa report indicates that NetEase's game revenue in the third quarter may improve compared to the previous quarter, driven by major game updates. These analysts said that classic games such as "7 Days World" and "Identity V" underwent major updates in July, gaining strong momentum entering the third quarter. Daiwa expects that due to adjustments to "Fantasy Westward Journey" and "Egg Party", the year-on-year growth of online game revenue in the third quarter will accelerate to 16.5% as the base in the second half of 2024 is lower. The recently launched "Marvel: Realm of Champions" still has the opportunity to increase its revenue as NetEase plans to update its content every six weeks to maintain its one million player base. Daiwa has raised the target price of this Chinese gaming company from HK$235.00 to HK$260.00, while maintaining a buy rating on the stock.