Group 1 - The core viewpoint of the report indicates that NetEase's revenue for Q4 2025 is expected to grow by 3% year-on-year to 27.5 billion yuan, which is in line with the firm's expectations but falls short of market expectations by 4% [1] - The non-GAAP operating profit margin is projected to increase by 0.6 percentage points year-on-year to 33.3%, which is 0.6 percentage points higher than the firm's expectations, primarily due to lower-than-expected growth in marketing expenses and a greater-than-expected decline in general and administrative expenses [1] - Non-GAAP operating profit is expected to rise by 5% year-on-year, exceeding the firm's expectations by 1% [1] Group 2 - The firm has set a target price of $160 for NetEase's U.S. stock and maintains a "Buy" rating [1]

Core Insights - NetEase reported a robust financial performance for the fourth quarter and the entire year of 2025, achieving a revenue of 112.6 billion yuan, with its core gaming business demonstrating resilience, particularly with "Dream of the Red Chamber" achieving a quarterly revenue record after 23 years of operation [1] AI Strategy - The management emphasized that while generative AI lowers the entry barrier for game development, it raises the success threshold for top-tier products, shifting the competitive barrier from production capacity to integration capability [3][4] - High-quality private data is deemed more important than computational power, and the application of AI in specific business scenarios is prioritized over the scale of parameters [4] - By 2025, NetEase plans to deploy its AI-native pipeline across various stages of game development, achieving efficiency improvements of up to 300% in certain areas [4] Globalization and Product Success - "Yan Yun Sixteen Sounds," an open-world game, achieved significant global success, ranking second on Steam's global sales chart and topping the iOS download charts in over 60 markets, with over 80 million global users [5] - The success is attributed to the maturity of "Chinese stories, international expression," showcasing that localized cultural content can compete globally if the expression resonates with contemporary player aesthetics [5] Evergreen Game Strategy - "Dream of the Red Chamber" has defied typical industry trends by achieving a quarterly revenue high after 23 years, demonstrating a "counter-cyclical" growth strategy [6] - The management detailed a strategy for revitalizing classic gameplay while optimizing user experience and economic systems to engage both new and existing players [6] New Category Innovations - NetEase is advancing in new game categories, with anticipated releases like "Infinite" and "Forgotten Sea," the latter expected to launch in Q3 2026 [7] - The company is also exploring the auto-chess genre with a unique cultural angle based on Chinese mythology, aiming to differentiate itself in a crowded market [7]

Core Viewpoint - Morgan Stanley's report indicates that NetEase's revenue for Q4 2025 is expected to rise only 3% year-on-year to 27.5 billion yuan, with online gaming revenue increasing by 4% to 21.3 billion yuan, which is 6% lower than the bank's expectations due to slower revenue recognition [1] Group 1: Revenue and Growth - Total game revenue is estimated to grow by 10% year-on-year, indicating a healthy growth level [1] - Deferred revenue is projected to increase by 34% year-on-year to 20.5 billion yuan, reaching a new high [1] Group 2: Profitability - Non-GAAP net profit is expected to decline by 27% to 7.1 billion yuan, which is 25% lower than the bank's expectations, attributed to delayed revenue recognition and losses from equity investments marked to market [1] Group 3: Shareholder Returns - The company declared a dividend of $1.16 per ADS, with a payout ratio of 84%, exceeding the typical payout ratio of 30%, aimed at compensating for limited share buybacks during 2025 [1] - Morgan Stanley has set a target price of $168 for NetEase's U.S. stock and maintains an "Overweight" rating [1]

证券研究报告 网易 (NTES US) 4Q 收入低于预期，游戏递延周期增长 2026 年 2 月 12 日│美国 互联网 网易 4Q25 总营收同比+3%至 275 亿元，低于 VA 一致预期（下同）5%， 主因游戏收入递延周期增加。递延收入超预期 21%，环比提升 10 亿元。经 调整归母净利润同比下降 27%至 71 亿元，低于预期 23%，主因投资损益影 响，拼多多等股票投资减值金额较大。我们预计网易 1H 流水有望边际改善： ①《燕云》全球累计用户达 8000 万，26 年海外全端流水有望达到 20-30 亿元；②《遗忘之海》管理层表示 3Q 有望上线，2 月测试反馈优秀，题材 和美术风格具备差异化优势，我们预计 12 个月流水有望达 25-50 亿元；③ 其他重点储备：《无限大》1 月封闭测试符合预期，中式妖鬼题材自走棋《妖 妖棋》1 月获版号，ARPG 端游《归唐》关注度较高。当前网易估值尚处低 位，我们看好 26 年收入和利润释放，重申"买入"评级。 《燕云》海外放量在即，《遗忘之海》打开 26 年增量空间 4Q 游戏和增值服务收入同增 3%至 220 亿元，其中游戏收入同增 4%至 213 ...

Core Viewpoint - The report from CICC maintains the Non-GAAP net profit forecast for NetEase-S (09999) for 2027, with a target price of HKD 265 / USD 171, indicating an upside potential of 36% / 38% for Hong Kong and US stocks respectively [2][8]. Revenue and Growth - Deferred revenue showed significant growth, with a net increase of CNY 1.04 billion in Q4 2025, exceeding market expectations, suggesting potential revenue release in the future [3][9]. - Game and related value-added service revenue increased by 3% year-on-year in Q4 2025, driven by stable operations of long-standing IPs like "Dream of the Red Chamber" and contributions from "Yanyun Sixteen Sounds" and "Marvel Showdown" [3][9]. - Youdao's revenue grew by 17%, reflecting the effective implementation of its AI-driven strategy, while Cloud Music revenue increased steadily by 5% [3][9]. Profitability and Cost Management - The gross margin improved to 64.2% in Q4 2025, indicating strong cost control capabilities [4][9]. - The absolute amount of operating expenses met expectations, with the sales expense ratio rising to 14%, aligning with the overall marketing investment strategy [4][9]. Shareholder Returns - The dividend for Q4 2025 was USD 1.16 per ADS, with a payout ratio of 83%, maintaining an annual dividend ratio of around 40% [5][9]. - The company has extended its share repurchase program (up to USD 5 billion) until January 2029, having repurchased approximately USD 2 billion by the end of 2025 [5][9].

Core Viewpoint - The report from CICC maintains the 2027 Non-GAAP net profit forecast for NetEase-S (09999), with target prices set at HKD 265 and USD 171, indicating an upside potential of 36% and 38% for Hong Kong and US stocks respectively [1] Group 1: Revenue and Growth - Quarterly deferred revenue shows high growth, with a net increase of CNY 1.04 billion in Q4 2025, better than market expectations, indicating potential revenue release in the future [2] - Revenue from games and related value-added services increased by 3% year-on-year in Q4 2025, driven by stable operations of long-standing IPs like "Fantasy Westward Journey" and contributions from new titles [2] - Youdao's revenue grew by 17%, reflecting the effective implementation of its AI-driven strategy, while Cloud Music's revenue increased steadily by 5% [2] Group 2: Profitability and Cost Management - The gross margin improved to 64.2% in Q4 2025, demonstrating the company's cost control capabilities [3] - The absolute amount of operating expenses met expectations, with the sales expense ratio rising to 14%, aligning with the overall marketing investment strategy [3] Group 3: Shareholder Returns - The dividend for Q4 2025 was USD 1.16 per ADS, with a dividend payout ratio of 83%, maintaining an annual dividend ratio of around 40% [4] - The company has extended its share repurchase program (up to USD 5 billion) until January 2029, having repurchased approximately USD 2 billion by the end of 2025 [4]

尽管网易四季度业绩疲软，低于市场预期，但摩根大通认为公司实际经营表现远好于账面数据所呈现的水平。 网易公布2025年第四季度财报，营收同比增长仅3%，净利润更是同比下降27%，双双低于彭博一致预期约4%和23%，这直接导致港股股价盘前 承压， 开盘下挫4%。 但摩根大通发表研报指出，《燕云十六声》等新游戏的强劲现金流水已反映在合同负债中，而非经常性损失掩盖了核心营业利润的出色表现。 此外随着《遗忘之海》和《无限大》等重磅新游上线，预计将推动2026-2027年游戏收入实现13%的年复合增长率。摩根大通维持对网易的"增 持"评级，目标价295港元（190美元），基于2026年预测市盈率13倍的估值具有吸引力。 真实现金流水远超账面收入 研报指出，市场对网易收入的失望主要源于Q4网游收入仅同比增长4%，且环比下降了7%。这很容易被解读为增长乏力。 例如《蛋仔派对》和《第五人格》的排名和流水均出现下滑，但这部分归因于暑假季节性因素消退。 净利润同比下降27%，比起彭博一致预期低了23%，这个数字确实吓人。但这并非网易的业务出了问题，而是因为投资账面浮亏。 摩根大通指出，Q4网易确认了高达22亿元人民币的权益投资及汇 ...

Core Insights - NetEase Youdao reported a net revenue of 5.91 billion RMB (845 million USD) for the fiscal year 2025, representing a year-on-year growth of 5.0% [1] - The company achieved an operating profit of 220 million RMB, a significant increase of 48.7% year-on-year, and recorded its first annual operating cash inflow of 55.2 million RMB [1] - Despite the overall revenue growth, the company faced a net loss of 47.1 million RMB (6.7 million USD), primarily due to a 25.7 million RMB (3.7 million USD) impairment loss from long-term investments [1] Revenue Breakdown - For the fiscal year 2025, Youdao's learning services net revenue was 2.6 billion RMB (376.2 million USD), down 4.2% year-on-year, mainly due to a decrease in tutoring service revenue [2] - The net revenue from smart devices was 739.6 million RMB (105.8 million USD), reflecting an 18.2% decline year-on-year, attributed to decreased demand [2] - Online marketing services net revenue increased by 28.5% year-on-year to 2.5 billion RMB (363 million USD), driven by increased demand from NetEase Group and overseas markets [2] Profitability Metrics - Youdao's gross profit for 2025 was 2.6 billion RMB (374.2 million USD), a decrease of 4.8% year-on-year, with a gross margin of 44.3% [2] - The gross margin for online marketing services dropped from 36.0% in 2024 to 27.1% in 2025, while the gross margin for learning services slightly decreased to 60.2% [2] - The gross margin for smart devices improved to 46.4% from 38.7% in 2024 [2] Strategic Outlook - CEO Zhou Feng emphasized the importance of AI upgrades, noting that the renewal rate for Youdao's services exceeded 75% [2] - The company plans to transition from an "EdTech" company to a "Learning and Advertising AI Application Service Provider" by 2026, focusing on both learning and advertising sectors [3] - Youdao aims to enhance user experience and drive sustainable long-term growth through the development of vertical large language models and AI-driven applications [3] Financial Position - As of December 31, 2025, Youdao's total cash, cash equivalents, and short-term investments amounted to 743.2 million RMB (106.3 million USD), an increase of 80.6 million RMB from the end of 2024 [3] - The company's contract liabilities, primarily from deferred revenue in learning services, totaled 847.7 million RMB (112 million USD) [3] - Youdao has secured financial support, including a short-term loan of 878 million RMB and a long-term loan of 132.1 million USD maturing on March 31, 2027, to support future business [3]

Core Insights - NetEase reported steady performance for the year 2025, with total revenue reaching 112.6 billion yuan and Q4 revenue at 27.5 billion yuan [1] - The innovation and other business segment generated annual revenue of 6.8 billion yuan, with Q4 revenue of 2 billion yuan, reflecting a quarter-on-quarter growth of 42.4% [1] Group 1: Business Performance - NetEase's innovative business, particularly NetEase Yanxuan, solidified its positioning in lifestyle consumer brands, launching 11 billion-level product series in pet food, home cleaning, and home goods [1] - The pet business achieved recognition as one of the "Top 3 Online Pet Brands in China," with dog food sales experiencing double-digit growth [2][3] - The home cleaning category received certification as a leading brand in odor removal, with three products ranking first in national sales [1] Group 2: Product Innovation - In 2025, NetEase Yanxuan applied for and obtained 52 patents, focusing on systematic R&D capabilities to enhance product quality [3][4] - The introduction of the "3D Fresh Steamed Emulsification Process" for pet food significantly improved nutrient absorption efficiency, addressing market pain points [4] - The fresh steamed pet food series became the fastest-growing product in the past six months, receiving media coverage and industry recognition [4] Group 3: Brand Strategy - NetEase Yanxuan implemented a successful youth-oriented strategy, collaborating with celebrities and popular IPs to engage younger consumers [6] - Sales surged to 32.4 million yuan within 24 hours of signing a new spokesperson, with limited edition products selling out in seconds [6] - The brand's visibility increased significantly, achieving over 580 million total exposures and ranking high on social media platforms [6] Group 4: Marketing Initiatives - During the Spring Festival, NetEase Yanxuan launched a campaign focused on pet care, collaborating with various partners to provide comprehensive solutions for pet owners [7] - The company introduced a New Year gift box for pets, which included various products and received positive feedback from young consumers [7]

Core Insights - NetEase reported Q4 revenue of RMB 27.5 billion and annual revenue of RMB 112.6 billion, highlighting its strategic focus on AI technology, overseas market expansion, and long-term game operations during the earnings call [1] AI Technology Application - NetEase aims to become the "most knowledgeable AI expert in gaming," with AI-native gameplay already implemented in several flagship products. The management noted that while AI lowers the entry barrier for game development, it raises the success threshold for top-tier products, shifting the core barrier from mere production capacity to integration capability [2][3] - The company plans to maintain high investment in vertical models, AI-native gameplay, and talent development, emphasizing that high-quality private data is more critical than computing power in vertical fields [2] Overseas Market Expansion - The success of "Yan Yun Shi Liu Sheng" in overseas markets validates NetEase's ability to express Chinese stories internationally. The game reached the second position on Steam's global sales chart and topped the iOS download charts in over 60 markets, with global users exceeding 80 million [4] - The management expressed confidence in cultivating high-quality creative talent in China, which has the largest pool of game development professionals globally [4] Long-term Game Operations - NetEase demonstrated strong long-term operational capabilities, with "Dream of Dreams" PC version achieving record quarterly revenue in its 23rd year. The successful launch of the "Chuang Wan" server provided new insights for long-term game operations [5] - The management outlined three key strategies for revitalizing long-standing games: restoring classic gameplay, restructuring the economic system while maintaining free trade, and optimizing the overall experience [5] Upcoming Products - Anticipated releases include "Forgotten Sea," expected to launch in Q3, and "Infinite," which has met testing expectations. Both products aim for global simultaneous release across multiple platforms [6] - The management highlighted the potential in the auto-chess genre, planning to create a unique game based on Chinese mythology, emphasizing strong narrative and aesthetic elements [7]