Daiwa analysts John Choi and Candis Chan suggest that NetEase (NTES, Financial) may require a blockbuster game release to significantly boost its stock performance in 2025. The company's fourth-quarter results were in line with expectations, but management is now focusing on enhancing profitability in its non-gaming sectors, which have been a drag on overall revenue.
Management plans to restructure teams based on anticipated market demands to ensure operational efficiency. A major downside risk for NetEase, according to Daiwa, is the potential for new game sales to fall short of expectations.
Daiwa maintains a buy rating for NetEase's H shares but has lowered the target price from HKD 195.00 to HKD 180.00. The latest trading price for NetEase H shares is HKD 158.00.