Jinwu Financial News |BOCOM InternationalAccording to the research report,NetEase(09999) Revenue in the first quarter of 2025 increased by 7% year-on-year, in line with Bloomberg and VA consensus market expectations. Among them, the game business increased by 15% year-on-year, 5% higher than VA consensus expectations, partially offset by the contraction of value-added services.Youdao/Cloud Music/Innovation and other revenue fell 7%/8%/18% year-on-year. After adjustmentNet profitIt was 11.2 billion yuan, a year-on-year increase of 32%, 25% higher than Bloomberg and VA consensus expectations, and adjusted operating profit increased 34% year-on-year, 21% higher than VA consensus expectations. The increase in net profit margin was better than expected, mainly reflecting the company's focus on core business and the decline in marketing expenses.The bank pointed out that the game in the first quarter was better than expected, and effective cost control drove profits to significantly exceed expectations. The growth of client games has accelerated, and the decline of mobile games has narrowed. "Marvel Competition", "Sixteen Sounds of Yanyun" and "Identity V" have promoted business growth. Based on the improving game trend and effective cost control, the bank raised its game revenue in 2025 by 1.9%/adjusted net profit by 5.6%. Based on the company's overall P/E of 18 times in 2025, the bank raised its target price from US $124/HK $193 to US $143/HK $223, maintaining a buy rating.
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