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<Research>Nomura Expects NTES-S (09999.HK) Profit Margin to Continue Improving, Raises TP to $242
Recommend 5 Positive 8 Negative 3 |
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While Nomura believed that NTES-S (09999.HK)(NTES.US)'s online game business remains healthy, the market may be overly optimistic about its 2Q25 performance following a strong 1Q25, according to Nomura's research report. In addition, Nomura expected NTES-S' profit margin to continue improving, and forecasted its 2Q25 gross profit margin (GPM) to increase by 0.7 ppts YoY to 63.6%, mainly benefiting from the possible expansion of non-game business margins. The broker predicted 2Q25 operating profit margin to expand by 4 ppts YoY to 35.7%, driven by ongoing operational leverage. Therefore, Nomura reiterated rating at Buy on the stock, and raised its target price for NTES-S' H-shares from $233 to $242 based on the SOTP valuation method, as it extended the valuation basis to 2026. AASTOCKS Financial News Website: www.aastocks.com |
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