Movement Alert|NTES Rises 3.05% in Regular Trading, Multiple Banks Raise Target Prices After Q2 Earnings Beat on Revenue

Market Focus
08/21

On August 21, NTES rose 3.05% in regular trading, trading at HK$199.2/share, with turnover of HK$1.819 billion.

The rebound follows multiple investment banks raising their target prices after NTES reported Q2 results on August 20. Bank of America raised its target price to HK$272 from HK$268, reiterating a Buy rating, citing higher gaming gross margins and lifting adjusted operating profit forecasts by 7%-9% for the next three years. Citi raised its US ADR target to $178, while Daiwa lifted its HK target to HK$260, both maintaining Buy ratings. Jefferies also reiterated its Buy rating, noting online gaming performance exceeded expectations.

The upgrades came despite NTES falling over 5% in US trading on August 20, as Q2 adjusted EPS of RMB 12.02 missed the RMB 15.59 consensus due to approximately RMB 29.5 billion in investment losses and an elevated effective tax rate of 25.5%. However, Q2 revenue of RMB 30.1 billion and gaming revenue of RMB 25.02 billion both exceeded expectations, with gross profit rising 17.5% year-over-year.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)

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