NetEase (NTES) Needs Blockbuster Game for Future Stock Growth

Feb 21, 2025

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.

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I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.

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