[ET Net News Agency, 2 December 2020] UBS Global Research initiated coverage on NetEase
(09999) with a "buy" rating and a target price of HK$164.
The research house likes NetEase's strong R&D team, games genre diversification, and
globalisation initiatives. UBS believes NetEase leads peers in games quality and
innovation, and operational efficiency, making it better positioned as the industry shifts
to more integrated game development and operations.
NetEase saw slight QoQ mobile games grossing growth in 3Q, despite a tough comparison
post-Covid-19, and UBS expects the trend to continue in 4Q. UBS thinks margin pressure
from Youdao will continue in the near term but is mostly priced in. (KL)