NTES(NTES) 申万宏源研究·2024-05-31 06:31Investment Rating - The report maintains a "Buy" rating for the company [2][9][10] Core Insights - The company's Q1 2024 revenue reached 26.85 billion RMB, a year-on-year increase of 7%, which is in line with consensus expectations. Adjusted net profit was 8.51 billion RMB, up 12% year-on-year, slightly exceeding consensus by 2.2% [4][9] - The gross margin improved to 63.4%, surpassing consensus expectations by 1.6 percentage points. The gaming segment continues to show strong growth, with online gaming revenue at 20.4 billion RMB, a 10% year-on-year increase [4][5] Financial Performance - Q1 2024 revenue breakdown shows online gaming revenue at 20.4 billion RMB, with mobile gaming revenue at 16.1 billion RMB, up 19% year-on-year, marking a historical high [5][11] - The company has adjusted its revenue forecasts for 2024 and 2025 to 112.2 billion RMB and 122.5 billion RMB respectively, while also increasing the net profit forecasts for the same years to 34.1 billion RMB and 37.9 billion RMB [9][11] Business Segments - The gaming segment remains robust, with deferred revenue indicating a strong foundation for future growth. The upcoming FPS game "Firefly Assault" is set to launch on June 6, with other key titles expected in the summer [5][11] - Cloud music revenue grew by 4% year-on-year, with a gross margin of 38%, reflecting significant improvement in profitability. The main app has undergone a major revision to focus on music discovery [6][11] Shareholder Returns - The company announced a cash dividend of 0.495 USD per ADR in Q1, totaling 2.26 billion RMB, with a payout ratio of approximately 26.6%. The total shareholder return from dividends and buybacks in 2023 was about 2.3 billion USD, corresponding to a return ratio of nearly 4% [9][11]