NTES(09999) 东方证券·2024-05-25 08:30Investment Rating - The report maintains a "Buy" rating for the company [4] Core Insights - In Q1 2024, the company reported revenue of 26.85 billion (yoy +7.2%, qoq -1.1%), with a decline attributed to reduced income from Youdao, while year-on-year growth was driven by increased mobile game net revenue [1] - The gross margin for Q1 was 63.4% (yoy +3.9pp, qoq +1.4pp), primarily boosted by growth in cloud music [1] - Non-GAAP net profit attributable to the parent company was 8.51 billion (yoy +12.5%, qoq +15.3%), while GAAP net profit was 7.63 billion (yoy +13%, qoq +16%) [1] - The total revenue from games and related value-added services was 21.46 billion (yoy +6.9%, qoq +2.6%), with growth driven by new game releases and continuous content innovation [1] - The company has a rich product pipeline, with several new games expected to launch in 2024, which are anticipated to drive revenue growth [2] Financial Summary - The company forecasts net profit attributable to the parent company for 2024-2026 to be 33.6 billion, 38.5 billion, and 41.7 billion respectively [2] - The target price is set at 164.63 HKD / 148.82 CNY, based on a sum-of-the-parts (SOTP) valuation [2] - The company’s revenue is projected to grow from 117.6 billion in 2024 to 146.6 billion in 2026, with a compound annual growth rate (CAGR) of 7.63% [6][9]