- NetEase is the second-largest mobile gaming company in the world and has demonstrated the ability to generate consistent revenue from existing games and develop a robust pipeline.
- We see international expansion to be an increasingly important initiative for the company, and it has gained some initial success in Japan.
- We believe NetEase can capture additional growth opportunities through its online education offering, Youdao and music streaming services.
- NetEase is trading at a discount to its closest peers, which we believe is not justified given its competitive advantages and technology capabilities. Our sum-of-the-parts valuation suggests a 30% upside.
For further details see:
NetEase: Gaming Pure-Play With Plenty Of Growth Opportunities