JPMorgan analysts maintained an Overweight rating on NetEase (NASDAQ:NTES) with an unchanged price target of $125.00, highlighting the company as a top pick in the China internet sector for 2024. Shares gained more than 7% intra-day today.
The analysts noted the company’s significant outperformance in 2023 where it saw a 31% increase compared to the KWEB’s 9% decline. They anticipate this trend to continue into 2024, with the current price target suggesting a 36% upside for NetEase in the U.S. market.
NetEase’s strong capabilities in game development are seen as a key driver for its success, enabling it to consistently introduce new and successful game titles globally and achieve double-digit game revenue growth since 2015. The analysts expect 2024 to be a major year for product releases at NetEase, with over five high-profile game titles in the pipeline. They are particularly optimistic about Naraka Mobile, anticipating it to perform similarly in revenue to Justice Mobile, and contributing to another year of double-digit game revenue growth (10% year-over-year) for 2024.