NetEase Q2 financial report released, Da Mo: rated as "increasing holdings" and listed as the industry's first choice stock
阿豆学长长ov
发表于 2024-8-23 13:11:37
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On August 22nd, NetEase released its Q2 financial report, with a net income of 25.5 billion yuan, a year-on-year increase of 6%. The net profit attributable to the company's shareholders was 7.8 billion yuan, and the overall performance maintained steady growth. In the second quarter, NetEase invested 4.5 billion yuan in research and development, with an R&D investment intensity of over 17%, leading the industry. Morgan Stanley, Citigroup, Goldman Sachs and other institutions have released research reports, giving NetEase an increase or buy rating, believing that its research and development capabilities are strong, long-term boutique products continue to become popular, new product layouts are diversified, and its medium - and long-term operations will maintain strong competitiveness.
Citi believes that Internet companies are among the first to benefit from AI technology. They are optimistic about the development of NetEase, and their valuation is still attractive. Guojin Securities pointed out that NetEase has long-term research and development, distribution experience, and multi format derivative capabilities, which can continuously provide users with freshness in the medium and long term operation, making its games competitive in the medium and long term operation process. JPMorgan has raised its forecast for NetEase's online gaming revenue growth in the next two years to 11%, which is higher than the market's generally expected single digit growth, and once again confirms NetEase as its preferred investment target in the Chinese online gaming industry.
Classic IP repeatedly sets new highs+new games bloom comprehensively, rated as "increased holdings" and listed as the industry's first choice
According to NetEase's Q2 financial report, NetEase focuses on its core business and actively seeks change. Through a dual approach of content model innovation and AI technology driven development, classic IPs have repeatedly reached new highs, and new IPs have fully bloomed, building a solid foundation for long-term stable development.
On the one hand, NetEase strengthens its long-term operational capabilities for classic and popular IPs, continuously revitalizing the vitality of classic games. The popularity of high-quality IP content linkage in "The Fifth Personality" has skyrocketed, with a record high number of active users in July and August; Egg Boy Party has once again reached a new high, with over 600 million registered users and over 40 million creators worldwide; Both the PC games' Leading the Land 'and' Eternal Tribulation 'have set new DAU records.
On the other hand, NetEase is constantly opening up new battlefields, and the momentum of vertical new games is rapid. The mobile game 'Eternal Tribulation' has shown strong performance, ranking third on the domestic iOS bestseller list shortly after its launch and consistently topping the iOS download list for over a week, breaking NetEase Games' 27 year record for daily new additions. According to SensorTower's release of the global mobile game revenue growth chart for July 2024, "Eternal Love" ranked 7th on the global revenue growth chart. In addition, after its launch, "Seven Days World" immediately gained the highest number of online players on Steam, exceeding 230000, ranking second among the world's best-selling games on Steam. After its release, "Firefly Strike" also topped the iOS download chart. Zhongjin believes that NetEase's new game performance in the third quarter is impressive, and it may restart quarterly growth.
We are optimistic that the mobile game "Eternal Love" will become another flagship game of NetEase with a huge user base, in addition to "Egg Boy Party". We believe that the mobile game "Eternal Love" will have a longer life cycle. JPMorgan Chase said that NetEase's stock price has underperformed the market since the beginning of the year, mainly due to investors' concerns about the monetization of its traditional games and the prospects of new games. NetEase's stock price is currently at a low level in the past five years, lower than its peers in Asian online games. The bank expects that the new games launched by NetEase from the third quarter will accelerate game growth, and the valuation will also be raised from the current level.
Several institutions are optimistic about the development of NetEase and have given it an "increase in holdings" rating, while Da Mo reiterated that NetEase is the preferred stock in China's online gaming industry. Jeffrey pointed out that NetEase has strong execution capabilities in game development. In addition to the existing "Fantasy Westward Journey" mobile game, "Identity V", "Egg Party" and the computer version of "Eternal Love", NetEase also has multiple new games such as "Seven Day World", "Eternal Love" mobile game and "Yanyun Sixteen Sounds". He believes that the game portfolio has a stable prospect and maintains a "buy" rating.
R&D intensity exceeds 17%, leading the industry in medium and long-term operations, maintaining strong competitiveness
Technological innovation is regarded as the core element for forming and developing new quality productive forces, and it is also the core competitiveness for building strong "long-distance running ability" of enterprises. As of Q2, NetEase has maintained a leading R&D investment intensity of over 15% in the industry for eight consecutive quarters. At the same time, NetEase invested 4.5 billion yuan in R&D in Q2, with a R&D investment intensity of over 17%, leading the industry.
It is worth noting that NetEase's technology is accelerating its sinking and deepening implementation, and has completed large-scale applications in core businesses such as gaming, education, music, industry, risk control, and high-frequency scenarios, achieving stronger commercial monetization and multi format derivative capabilities. Especially in the gaming industry, NetEase has further reduced costs and increased efficiency on the production side through AI technology, while continuously exploring the "AIGC+UGC" model to reconstruct the content model of games and create a diverse business ecosystem. According to the data, all kinds of play methods of "Against the Water Cold" AI blessing, in June, the total number of Duan mobile games played in Tiktok exceeded 100 billion times, and the "AI teammate" function of "Forever" also exceeded 500 million times on Tiktok platform. At the same time, "Egg Boy Party" launched functions such as "universal generator", "plot animation editor", and not long ago, it also launched egg code university creation contest with more than 20 national famous universities such as Tsinghua University.
Next, NetEase will continue to build its global influence. According to publicly available information, "Yanyun Sixteen Sounds" will begin cross platform testing on August 28th, "Marvel Ultimate Reversal" will be launched in China on August 29th, and "Marvel Striker" will be available on Steam, Epic Games, PS5, and Xbox Series X/S platforms on December 6th with simultaneous pre orders. Egg Boy Party also announced its global release plan for Switch at the Nintendo Direct Meeting. In addition, following the return of World of Warcraft, Hearthstone will also officially return on September 25th.
Multiple investment banks have analyzed that as NetEase enters a period of intensive new game launches throughout the year in the second quarter, and possesses long-term research and development and distribution experience, it will help to achieve stable profits in the medium to long term and maintain a "buy" rating. CICC stated in the report that it maintains NetEase's "outperform the industry" rating. HHLR Advisors, an independent and dedicated fund management platform under Hillhouse, recently released its US stock holdings as of the end of the second quarter of 2024. The report shows that HHLR Advisors increased its holdings of NetEase and other Internet stocks in the second quarter.
Guojin Securities further stated that the gaming market has entered a stock stage, prompting the industry to shift from extensive development to refined operation, and the importance of long-term high-quality games is increasingly prominent. NetEase has long-term premium games such as "Fantasy Westward Journey" mobile game, "Identity V" and "Leading the Way", with long-term research and development or distribution experience, multi industry derivative capabilities, and the ability to provide performance support and new product development time windows for the company. The medium and long-term customer acquisition costs are relatively low, maintaining stable growth.
Guojin suggests that attention should be paid to game companies with a large number of high-quality long-term games and long-term research and development and distribution experience. If the company has the ability to generate multiple formats, its games are more likely to establish emotional connections with users in long-term operations.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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