Hong Kong Stock Market News | NTES-S opens more than 4% higher, institutions believe that the potential re-collaboration with game developer Activision Blizzard is a positive development.
NTES-S opened more than 4% higher, with a gain of 4.2%, at HKD 146.5, with a turnover of HKD 50.62 million. There is news that NTES-S may collaborate again with game developer Activision Blizzard, which is positive for NTES-S. It is estimated that the collaboration will enhance NTES-S's profitability. Morgan Stanley maintains a positive outlook on NTES-S's performance, believing that its current valuation is attractive and investors can take advantage of the low price to accumulate.
Zhitong App learned that NTES-S (09999) opened more than 4% higher and rose 4.2% to HKD 146.5, with a turnover of HKD 50.62 million.
On the news front, on December 23rd, according to China News Publishing and Broadcasting News, a person in charge of the National Press and Publication Administration stated that the draft for soliciting opinions is based on the protection and promotion of the prosperous and healthy development of the online gaming industry. Regarding the concerns and opinions raised by various parties on Article 17, Article 18, and other contents of the draft for soliciting opinions, the National Press and Publication Administration will carefully study and further modify and improve it based on listening to the opinions of all parties.
In addition, Daiwa released a research report stating that NetEase and game developer Activision Blizzard may re-collaborate. The re-collaboration between the two parties is beneficial to NetEase. In terms of finance, the revenue contribution from Blizzard's copyright-related income accounted for a single-digit percentage during the first nine months of 2021 to 2022. The return of Blizzard's games is good news for Chinese gamers, and it is estimated that the collaboration will significantly increase NetEase's profitability. The bank rates NetEase as "buy".
At the same time, J.P. Morgan stated that it maintains a positive outlook on NetEase's performance over the next 12 months. This is mainly because the company focuses on high-quality games and tends to monetize products with high daily usage. A new game cycle will be launched in the first half of next year, and there are abundant opportunities in the international gaming market. J.P. Morgan believes that NetEase's current valuation is attractive, with a current price reflecting a forecasted P/E ratio of 11 times for this year. Investors can take advantage of the low price and the target price is HKD 195, with a rating of "hold".