Morgan Stanley releases reportonlinevideopokerrealmoney, downgraded Netease's investment rating in U.S. stocks from "overweight" to "synchronized with the market", and lowered its ADR target price from US$120 to US$100. The bank lowered its forecast for the stock's earnings per share from this year to 2026 by 6% to 12%. It expects game revenue and net profit to increase by 6% to 7% year-on-year this year and next.
The bank said that it had removed Netease from its preferred stock list in April based on seeing multiple risks. Netease accounts for an estimated 50% of the market for large-scale online role-playing games, with this type of game having the highest market share.onlinevideopokerrealmoneyHowever, the market share of Mini games in China is increasing, and future game sales potential may be discounted. The bank also pointed out that Netease may face the problem of declining return on capital invested in the future, including low-cost clothing for the "Anti-Shuihan" mobile game and "Legend of the Condor Heroes", and providing 10 billion yuan for the "Anti-Shuihan" mobile game and "Egg Boy Party". Subsidy, adjust the monetization model for the end-game version of "Fantasy Westward Journey".
In response to Tencent's "Yuanmeng Star", Netease's sales and promotion costs soared in the fourth quarter of last year. The situation can be repeated when the new game "Glory of the King" was launched in the summer and when it competed with the mobile game "Eternal Destruction". The separate launch of mobile games and end-games of "Yanyun Sixteen Voices" also affected the market's expectations for the game flow.