Rating Snapshot: NetEase rated as "Buy", global stock markets as "Hold"! Apple rating downgraded, target price for Hong Kong Stock Exchange lowered.

Goldman Sachs: Upgrades global stock market rating from "Neutral" to "Buy"

"We expect economic growth to become a more important driver of risk appetite, with the correlation between stocks/bonds turning more negative this year.

Historically, loose monetary policy has supported risk assets, but its impact may weaken this year as the market has already priced in most of the rate cuts in advance."

Huili Securities: Downgrades Apple's rating from "Buy" to "Neutral"

HSBC: Maintains a "Buy" rating for NetEase, raising the target price by 4% to HKD 203 from HKD 195

NetEase is set to announce its fourth-quarter earnings on February 29th, with the bank forecasting a 9% YoY revenue growth, where game revenue may increase by 15%, mobile game revenue by 31%, offsetting a decline of 18% in PC game revenue. The bank expects adjusted net profit to increase by 70% to RMB 8.2 billion YoY.

The bank mentioned that Egg Party has expanded its leadership position in party games with increased daily active users and total revenue during the Lunar New Year.

Bank of America Securities: Reiterates a "Buy" rating for Hong Kong Exchanges and Clearing, lowering the target price by 11% to HKD 302 from HKD 338

Due to the expected decline in average daily turnover and investment income forecasts, the bank has lowered profit forecasts for the next two years by 3% to 8%.

China Merchants Securities: Initiates coverage on New Oriental EDU & Tech with a "Strong Buy" rating

The bank stated that as of FY24Q1, New Oriental EDU & Tech's study abroad business training/consulting revenue increased by 52%/27% YoY, benefiting from cost efficiency improvements, with gross profit margins returning to pre-double reduction levels, showing a positive development trend.

The bank pointed out that before the outbreak in 2019, China's K12 education and training market exceeded RMB 800 billion. By splitting the K12 market size based on the number of K12 students, participation rate, and average spending, the bank estimates that the mid-term K12 market size is expected to recover to over RMB 421.3 billion, corresponding to a market size of over 52% before the double reduction.

Continuing, the bank mentioned that FY24Q1 study abroad business training/consulting revenue increased by 52%/27% YoY, showing strong recovery. Leveraging the brand advantage of New Oriental EDU & Tech, demand for overseas exam preparation and consulting services is expected to maintain stable growth.

FY23Q4/24Q1 university student training business grew by 34%/26% YoY, maintaining overall healthy growth. According to Wind data, the pass rate for postgraduate entrance exams has shown a fluctuating downward trend. The bank believes that future industry demand remains strong, and business profit margins are expected to gradually increase.

In FY23, the subsidiary Dongfang Zhenxuan achieved a net profit of RMB 1.09 billion, an 890.9% YoY increase, becoming the company's second growth curve as an extension of its content ecosystem. In 2023, the company began to expand into cultural tourism business, leveraging its live streaming traffic advantages with relatively controllable sales expenses. The overall consumer spending capacity is strong, with new business in FY24Q1 growing at a rate of 103.3% YoY and expected to continue growing.