Ricky Lai 黎柏坚
公司报告：网易 (NTES US)
+852 2509 2603
[email protected]
26 February 2016
New Game Titles Launched to Refresh Portfolio , “Buy”
新游戏投入以更新组合， “买入 ”
GTJA Research 国泰君安研究
Company Report: Netease (NTES US)
Buy
Rating:
Maintained

4Q15 results beat expectations, due to better than expected mobile game
contributions.
评级：

Revise up FY16-17 online game revenue estimates by 7.0%/ 9.0%,
respectively. 4Q15 online game revenue increased by over 103% yoy thanks
to the solid contributions by the launch of new game titles and sustainable
popular mobile games. Netease is going to launch a strong pipeline in FY16
to boost online game revenue growth.
6-18m TP 目标价:




Advertising revenue in FY16 will be propelled by the Olympic Games.
Advertising customers will spend more on advertising expenses during the
Olympic Games period to boost their business growth, which will drive up
Netease’s advertising revenue, especially revenue contributed from Netease
News App.
买入 (维持)
US$200.00
Revised from 原目标价:
US$195.00
Share price 股价：
US$136.230
Stock performance
股价表现
70
% change
60
50
Maintain the investment rating of “Buy” and raise the TP from
US$ 195.00 to US$ 200.00. FY16-17 earnings per ADSs have been revised
up by 4.6%/ 5.2%, respectively. The new TP represents 21.6x FY16 PER,
20.1x FY17 PER, 18.7x FY18 PER and 1.92 FY15-18 PEG. We have a
positive outlook on the Company in light of its popular mobile game titles and
strong game pipeline 2016.
(10)
2015 财年第 4 季度业绩高于预期，因高于预期的移动游戏收入贡献。
(20)
Feb-15
40
30
20
10
0
May-15
Jul-15
Sep-15
Dec-15
NASDAQ COMP Index
分别上调 2016-2017 财年在线游戏收入预测 7.0%/ 9.0%。2015 财年第 4 季度移动游戏的
Feb-16
Netease

Change in Share Price
股价变动
2016 财年广告收入将因奥运会的举行而受到支持。奥运会期间广告客户将花更多广告费用
以提高品牌，改善业务增长，这将推动网易的广告收入，特别是网易新闻应用程序的贡献。

维持投资评级为“买入”及目标价从 195.00 美元上调至 200.00 美元。分别上调 2016-2017
财年每 ADS 盈利预测 4.6%/ 5.2%。新目标价相当于 21.6 倍 2016 年市盈率、20.1 倍 2017
年市盈率、18.7 倍 2018 年市盈率及 2015-2018 年 PEG 为 1.92。我们对公司有正面的观
Abs. %
绝对变动 %
Rel. % to NASDAQ index
相对纳指变动 %
Avg. ADS price(US$)
平均 ADS 股价（美元）
1M
1 个月
3M
3 个月
1Y
1年
(14.0)
(19.8)
33.6
(15.4)
(9.2)
41.3
145.8
137.5
131.1
Source: Bloomberg, Guot ai Junan Internat ional .
点，因公司的手机游戏更受欢迎和更强的游戏组合。
Year End
年结
Net Profit Earnings per ADS
收入
股东净利
EPS
PER
BPADR
PBR
DPS
Yield
ROE
每股 ADS 净利
每股净利变动
市盈率
每 ADR 净资产
市净率
每股股息
股息率
净资产收益率
(RMB m)
(RMB m)
(RMB)
(△%)
(x)
(RMB)
(x)
(RMB)
(%)
(%)
2014A
11,713
4,757
36.427
6.5
24.3
178.883
4.9
15.186
1.7
21.8
2015A
22,803
6,735
51.266
40.7
17.2
223.205
4.0
11.174
1.3
25.6
2016F
33,703
7,959
61.048
19.1
14.7
254.162
3.5
15.493
1.7
25.6
2017F
45,040
8,490
65.620
7.5
13.7
273.575
3.3
16.653
1.9
25.0
2018F
58,526
9,052
70.509
7.5
12.7
306.376
2.9
17.894
2.0
24.5
Shares in issue (m) 总股数 (m)
Market cap. (US$ m) 市值 (US$ m)
3 month average vol. 3 个月平均成交股数 (‘000)
52 Weeks high/low (US$) 52 周高/低
130.7
17,805.3
1,184.3
184.730 / 94.830
Major shareholder 大股东
Mr William Lei Ding 44.8%
Free float (%) 自由流通比率 (%)
55.2
FY16 Net gearing (%) FY15 净负债/股东资金 (%)
5.3
FY15-18 PEG (x)
1.3
Company Report
12/31
Turnover
Source: the Company, Guotai Junan International.
See the last page for disclaimer
Netease
出一系列新游戏以提高游戏收入的增长。
网易 (NTES US)
收入同比增 103%，因推出新游戏和多款持续受欢迎的手机游戏。网易在 2016 财年将会推
Page 1 of 7
4Q15 results were better than market and our expectations. 4Q15 results beat expectations due to better than expected
mobile games contributions. 4Q15 gross profit margin was dragged down by 18.4 ppt yoy because of higher contributions from
lower margin mobile business..
Table-1: Netease’s Income Statement Analysis
4Q14
3Q15
YoY
QoQ
-Online game services
5,503
2,708
5,213
103.2%
5.6%
-Advertising services
609
362
455
68.2%
33.8%
-E-mail, e-commerce & others
1,791
393
1,004
355.7%
78.4%
Total net revenues
7,903
3,463
6,672
128.2%
18.5%
Gross profit
4,220
2,485
3,849
69.8%
9.6%
S&M expenses
(893)
(704)
(818)
26.8%
9.2%
S&M / total revenue
11.3%
20.3%
12.3%
(9.0 ppt)
(1.0 ppt)
G&A expenses
(322)
(143)
(320)
125.2%
0.6%
G&A / total revenue
4.1%
4.1%
4.8%
0.0 ppt
(0.7 ppt)
R&D expenses
(587)
(392)
(624)
49.7%
(5.9%)
R&D / total revenue
7.4%
11.3%
9.4%
3.9 ppt
(1.9 ppt)
Investment income
32
(2)
24
N.A.
33.3%
Interest income
133
157
140
(15.3%)
(5.0%)
Exchange gains/ (losses)
66
(7)
66
N.A.
0.0%
Others
23
72
10
(68.1%)
130.0%
Net income
2,164
1,271
1,882
70.3%
15.0%
Earnings per ADS (RMB)
16.46
9.73
14.31
69.2%
15.0%
Gross profit margin (%)
53.4%
71.8%
57.7%
(18.4 ppt)
(4.3 ppt)
Net profit margin (%)
27.4%
36.7%
28.2%
(9.3 ppt)
(0.8 ppt)
Comments
Growth supported by stronger mobile game
platform adoption
Dragged down by stronger mobile platform
contribution
Source: the Company.
Netease’s online game revenue in FY16-18 is expected to grow by 7.0%/ 9.0%, respectively. Netease will launch a
number of new PC game titles in 2016, including X-Heroes, Pirates: Treasure Hunters, Tian Yu, to refresh the Company’s game
网易 (NTES US)
4Q15
Netease
RMB (Million)
26 February 2016
4Q15 Results Review:
portfolio. Netease’s two popular mobile games (Fantasy Westward Journey and Westward Journey) maintained its high
rankings within China’s top 3 popular mobile games, thanks to the Company’s effort in refreshing these 2 titles through
introducing new virtual items and upgrade versions. We expect these two game titles to stay popular in 2016. Netease’s strong
game revenue growth can be sustained in 2016 with the launch of new mobile game titles (Raven, Kung Fung Panda 3, Da
Tang, etc). Mobile games contributed for over 57% of the overall game revenue in 4Q15, up 4 ppt QoQ By licensing from
overseas game developers Netmarble Games and Blizzard, we expect Netease’s online game revenue in FY16-18 to grow by
45.0%/ 30.0%/ 24.0%, respectively. We revised up FY16-17 online game revenue estimates by 7.0%/ 9.0%, respectively. 4Q15
online game gross profit margin was 67.2%, down 8.8 ppt yoy. Netease’s gross profit margin declined significantly due to
stronger mobile platform contributions and we expect the trend will be similar in 2016-2018 due to the stronger growth in the
mobile game business compared with PC game business. Profit margin will also be affected by more licensed games launched
Company Report
in 2016. We estimated Netease FY16-18 online game gross profit margin to be 69.3%/ 67.9%/ 67.2%, respectively.
See the last page for disclaimer
Page 2 of 7
Table-2: China’s iOS Top 10 Online Grossing Games Chart in Feb 2016
Grossing Games
Developer
1
Fantasy Westward Journey (梦幻西游)
Netease
2
The Legend of Mir 2 (热血传奇)
Tencent
3
Westward Journey (大话西游)
Netease
4
King of Glory (王者荣耀)
Tencent
5
Naruto Mobile (火影忍者)
Tencent
6
Feiji (全民飞机大战)
Tencent
7
Cross Fire (穿越火线)
Tencent
8
We Fly (全民突击)
Tencent
9
Anipop (蜀山战纪之剑侠传奇)
Juan Xiao
10
Junior Three Kingdoms (少年三国志)
Shanghai Youzu Information Technology
26 February 2016
Ranking
Source: App Annie.
Figure-1: Netease’s Gross Profit Margin, Operating
Figure-2: Netease’s Online Game Revenue and YoY
Profit Margin and Net Profit Margin
Growth
Operating profit margin
Net profit margin
YoY growth (RHS)
50,000
100%
Gross profit margin
40,000
68.0%
60%
62.3%
57.7%
53.4%
40%
30%
36%
34%
33.0%
80%
32,637
50%
36.7%
40,470
86.9%
71.8%
32%
31.2%
20%
31%
28.2%
31%
27.4%
30,000
17,314
20,000
10,000
60%
25,106
40%
45.0%
9,266
20%
30.0%
24.0%
10%
0
0%
4Q14
1Q15
Source: the Company.
2Q15
3Q15
4Q15
0%
2014A
2015A
2016F
2017F
2018F
Source: the Company, Guotai Junan International.
Revise up FY16-17 advertising revenue estimates by 4.0%/ 2.3%, respectively. Netease’s 4Q15 advertising revenue grew
by 68.2% yoy because of stronger contributions from the Company’s News App and other platforms. 2016 Olympics game will
网易 (NTES US)
70%
Netease
80%
Online game revenue (LHS)
RMB(Million)
encourage advertising customers to increase their spending for brand building to capture business opportunity in the period.
Netease’s advertising platforms including News App are expected to benefit from the related higher advertising demand related
to the sports event. We revise up the Company’s advertising revenue estimates in FY16-17 by 4.0%/ 2.3%, respectively.
Operating costs as a percentage of revenue declined in 4Q15. In 4Q15, Selling and Marketing (S&M) expense as a
percentage of revenue was 11.3%, down 8.9 ppt yoy, and Research and Development (R&D) expense as a percentage of
revenue was 7.4%, down 3.9 ppt yoy. The Company can reduce operating expenses proportions in recent quarters thanks to
the economics of scale effect and licensing games. FY16-18 S&M as a percentage of revenue is estimated to be 13.0%/ 12.9%/
Company Report
12.8%, respectively.
See the last page for disclaimer
Page 3 of 7
Mobile Game Titles
PC Game Titles
Raven (掠夺者)
X-Heroes (突击英雄)
Richman 9 (大富翁 9)
Pirates: Treasure Hunters (夺宝联盟)
Kung Fung Panda 3 (功夫熊猫 3)
The Sword of Wings (天谕)
DaTang (大唐游仙记)
New Ghost (新倩女幽魂)
Destiny of Darkness (黑暗启元)
Tian Yu (天谕)
Immortals Legends (神魔劫)
Activation (无尽战区)
26 February 2016
Table-3: Netease’s PC and Mobile Game Pipeline
The Legend of Lu Xiaofeng (陆小凤传奇)
S7
Mushroom Wars: Space (蘑菇战争:太空大战)
Audition
The Phantom Soul (魂之幻影)
Nu Po Qian Jun (怒破千军)
Handsome Siblings OL (绝代双骄 OL)
Source: the Company.
Profit Revision:
FY16-17 earnings per ADS forecasts have been revised up by 4.6%/ 5.2%, respectively. We revised up FY16-17 net
revenue forecasts by 5.4%/ 6.5%, respectively, due to the revisions of online game and advertising revenue estimates. Online
game revenue in FY16-17 was revised up by 7.0%/ 9.0%, respectively, thanks to the launch of new game titles and solid
growth of old games. FY16-17 earnings per ADSs are revised up by 4.6%/ 5.2%, respectively.
Figure-3: Netease’s Historial PE Chart
25
网易 (NTES US)
30
+1 SD
20
Mean
Netease
15
-1 SD
10
5
0
Feb-14
May-14
Aug-14
Nov-14
Feb-15
May-15
Aug-15
Nov-15
Feb-16
Source: Bloomberg.
RMB (Million)
Online games revenue
Advertising services revenue
Email, e-commerce & others
revenue
Total net revenue
Net profit
Earnings per ADS (RMB)
2016F
23,464
OLD
2017F
29,942
2018F
N.A.
2016F
25,106
NEW
2017F
32,637
2018F
40,470
2016F
7.0%
CHANGE
2017F
9.0%
2018F
N.A.
2,219
2,595
N.A.
2,308
2,655
2,947
4.0%
2.3%
N.A.
6,289
9,748
N.A.
6,289
9,748
15,109
0.0%
0.0%
N.A.
31,972
42,286
N.A.
33,703
45,040
58,526
5.4%
6.5%
N.A.
7,609
8,070
N.A.
7,959
8,490
9,052
4.6%
5.2%
N.A.
58.363
62.376
N.A.
61.048
65.620
70.509
4.6%
5.2%
N.A.
Source: Guotai Junan International.
See the last page for disclaimer
Page 4 of 7
Company Report
Table-4: Financial Estimation Revisions
Maintain the investment rating of “Buy” and raise the TP from US$ 195.00 to US$ 200.00. We maintain the Company’s
investment rating of “Buy”, because of the Company’s strong game pipeline and high rankings of its mobile game titles. The
new TP represents 21.6x FY16 PER, 20.1x FY17 PER, 18.7x FY18 PER and 1.92 FY15-17 PEG.
26 February 2016
Valuation:
Table-5: Peer Comparisons:
Company
Market
Cap
PER (x)
ROE(%)
ROA(%)
18F
16F
17F
18F
16F
16F
7.6
5.2
0.8
0.7
0.6
10.1
5.9
18.3
15.6
6.2
4.7
3.6
27.6
15.6
15.7
13.8
3.3
2.8
2.4
15.6
12.1
11.6
1.7
3.3
2.9
0.3
26.1
19.7
10.2
13.3
9.1
3.4
2.8
1.7
19.9
13.3
12.8
15.2
10.8
4.2
3.4
2.2
22.4
15.3
Ticker
Currency
Price
16F
CYOU US
USD
17.820
940
7.4
EA US
USD
64.680
20,006
n.a.
Activision Blizzard Inc
ATVI US
USD
32.320
23,632
n.a.
Netease
NTES US
USD
136.230
17,808
13.1
Simple Average
Weighted Average
17F
PBR (x)
US Online Game Companies
Changyou
Electronic Arts Inc
HK Online Game Companies
Tencent
700 HK
HKD
139.000
1,307,183
27.1
21.1
19.1
7.4
5.7
5.1
30.6
17.9
Boyaa Interactive Int.
434 HK
HKD
2.480
1,897
6.0
4.9
n.a.
0.9
0.8
n.a.
12.3
10.8
Forgame Holdings
484 HK
HKD
11.220
1,536
23.8
10.1
11.9
0.8
0.8
n.a.
4.3
7.3
IGG
799 HK
HKD
3.470
4,777
8.2
6.5
51.0
2.3
1.9
n.a.
25.7
20.0
Netdragon
777 HK
HKD
19.360
9,544
60.1
35.3
41.8
1.8
1.8
n.a.
2.7
4.0
Simple Average
25.0
15.6
31.0
2.7
2.2
5.1
15.1
12.0
Weighted Average
27.2
21.1
19.4
7.4
5.7
5.1
30.3
17.8
SOHU US
USD
43.680
1,688
n.a.
56.7
25.2
1.2
1.1
0.8
n.a.
0.6
Youku Tudou Inc-Adr
YOKU US
USD
27.360
5,259
n.a.
n.a.
n.a.
10.5
10.1
n.a.
n.a.
n.a.
Weibo
WB US
USD
15.010
3,102
29.8
17.4
n.a.
4.3
3.5
n.a.
11.6
n.a.
Phoenix New Media
FENG US
USD
3.700
262
10.9
9.3
n.a.
1.4
1.5
n.a.
8.8
8.3
Sina
SINA US
USD
42.750
2,973
29.0
20.9
n.a.
1.0
0.9
0.7
3.8
3.5
FB US
USD
108.070
307,598
34.3
26.3
20.3
5.8
4.8
3.4
15.2
17.8
Simple Average
26.0
26.1
22.8
4.0
3.6
1.7
9.8
7.5
Weighted Average
34.2
26.3
20.3
5.8
4.8
3.4
15.1
17.5
Facebook
E-commerce Companies
Alibaba
BABA US
USD
66.660
165,044
24.8
19.6
2.4
5.0
4.1
0.5
30.6
12.7
VIPSHOP
VIPS US
USD
11.330
6,590
16.4
12.4
1.4
6.2
4.1
0.4
46.1
11.9
E-commerce China-Spon
DANG US
USD
6.460
522
97.9
19.6
n.a.
3.0
2.0
n.a.
39.5
6.5
Jumei
JUMEI US
USD
6.330
906
15.7
10.7
8.6
1.5
1.3
1.2
9.3
7.7
EBay
EBAY US
USD
24.180
28,501
13.0
11.8
10.9
3.9
3.4
3.0
30.3
12.3
JD.com
JD US
USD
24.930
34,489
226.6
57.4
6.3
6.4
5.9
1.2
0.3
2.9
AMAZON
MZN US
USD
555.150
261,388
59.1
39.3
28.6
14.5
10.0
8.0
18.9
7.0
Gome Electrical Appliances
493 HK
HKD
1.030
17,470
9.7
8.9
n.a.
0.8
0.8
n.a.
8.6
2.9
Simple Average
57.9
22.5
9.7
5.2
4.0
2.4
22.9
8.0
Weighted Average
55.9
31.9
16.9
10.0
7.2
4.7
22.5
8.9
14.5
Netease
Sohu.Com Inc
网易 (NTES US)
Advertising Companies
Alphabet Inc
GOOG US
USD
729.120
492,515
21.2
18.2
15.7
3.5
2.9
2.5
16.8
Yahoo! Inc
YHOO US
USD
31.360
29,615
60.4
51.7
46.3
1.0
0.9
0.8
1.6
0.9
Baidu Inc - Spon Adr
BIDU US
USD
158.220
54,685
23.1
16.5
1.7
4.6
3.6
0.4
20.6
12.9
Simple Average
34.9
28.8
21.2
3.0
2.5
1.2
13.0
9.4
Weighted Average
23.4
19.8
16.0
3.4
2.9
2.2
16.4
13.6
Overall Average
30.8
21.2
18.8
3.6
3.0
2.4
16.2
10.1
Overall Weighted Average
30.7
22.9
16.7
6.2
4.8
3.5
21.3
14.6
Source: Bloomberg.
See the last page for disclaimer
Page 5 of 7
Company Report
Search Engine Companies
Financial Statements and Ratios:
9,266
Advertising services
1,345
Email, e-commerce and others
1,102
Net revenue
11,713
2016F
2017F
2018F
17,314 25,106 32,637 40,470
1,789
2,308
2,655
2,947
3,699
6,289
9,748 15,109
22,803 33,703 45,040 58,526
Year end Dec, RMB m
2014A
2015A
2016F
2017F
2018F
Cash and equivalents
2,021
6,071
9,127
8,791
9,706
Time deposits
Prepayments and other current
assets
Short-term investments
18,497 14,593 15,761 17,022 18,383
Others
Cost of revenue
(3,262)
Gross profit
(9,399) (16,002) (23,846) (33,020)
Total current assets
8,451
13,404 17,701 21,194 25,505
S&G expenses
(1,895)
(2,958) (4,381) (5,810) (7,491)
Property &
G&A expenses
(468)
(1,014) (1,618) (2,252) (3,102)
Time deposits
(1,323)
4,765
27
(2,159) (3,033) (4,009) (5,150)
7,272 8,669 9,123 9,762
62
80
95
103
Others
Total non-current assets
R&D expenses
Operating profit
Investment income
1,452
3,513
3,619
3,727
3,839
2,059
5,013
4,362
3,795
3,301
3,704
5,217
5,991
6,918
8,026
27,733 34,409 38,859 40,253 43,255
equipment, net
1,281
2,092
2,681
3,292
3,901
673
1,110
1,188
1,271
1,360
668
2,622
3,546
6,749
2,490
6,359
2,650
7,213
2,827
8,088
Interest income
602
597
579
747
774
AP
411
701
743
787
834
Exchange losses
(18)
134
146
152
155
Salary and welfare payables
535
921
1,013
1,114
1,226
32
22
15
Other, net
Income before tax
82
45
5,458
8,110
Income tax
(663)
Net income
4,757
Non-controlling interest
39
Earnings per ADS (RMB)
36.427
9,505 10,139 10,810
(1,273) (1,426) (1,521) (1,621)
6,735
7,959
8,490
9,052
102
120
128
137
51.266 61.048 65.620 70.509
Dividend payables
0
0
0
0
0
Deferred revenue
1,968
4,652
4,959
5,286
5,635
Others
3,843
5,394
5,270
4,774
4,191
Total current liabilities
6,756 11,667 11,985 11,962 11,886
Other long term payables
Deferred tax liabilities
CASH FLOW
Year end Dec, RMB m
Net income
Total non-current liabilities
2014A
2015A
2016F
2017F
2018F
4,796
6,837
8,079
8,618
9,188
Adjustments
Share-based compensation
349
684
842
1,036
1,274
174
182
Others
(85)
(306)
(341)
(373)
(414)
Total equity
679
1,364
2,073
2,844
Book per ADS (RMB)
Cash flow from operating activities
CAPEX
638
5,873
8,077 10,330
(537)
(866)
(1,341)
(2,584)
Change in time deposits
(2,050)
3,565 (1,245) (1,344) (1,451)
(592)
(2,651) (2,258) (2,293) (2,360)
(4,520)
(2,537) (5,134) (5,310) (5,521)
Cash flow from investing activities
Proceeds from short term bank loans
Dividends paid to shareholders
2,047
(1,983)
(979) (1,106) (1,217)
105
106
166
186
207
231
134
0
0
0
0
23,390 29,240 32,933 35,062 38,862
(32)
84
204
332
469
23,358 29,324 33,136 35,394 39,331
178.883 223.205 254.162 273.575 306.376
FINANCIAL RATIOS
2016F
2017F
2018F
Gross margin (%)
72.2
58.8
52.5
47.1
43.6
Operating margin (%)
40.7
31.9
25.7
20.3
16.7
Net margin (%)
40.9
30.0
24.0
19.1
15.7
(227) (2,045) (1,432)
ROE (%)
21.8
25.6
25.3
23.9
22.9
(1,468) (1,468) (2,154) (2,297)
ROA (%)
17.3
18.8
18.4
18.3
18.3
Net gearing (%)
8.0
7.0
5.3
3.0
0.9
(611)
(493)
(842)
(5,994)
Cash flow from financing activities
(778)
(1,633) (2,269) (4,811) (4,379)
(651)
(11)
142
128
115
563
4,050
3,056
(336)
915
1,458
2,021
6,071
9,127
8,791
Cash and cash equivalent at the end of year
2,021
Source: the Company, Guotai Junan International.
6,071
9,127
8,791
9,706
Year end Dec
Profitability
104
Company Report
Cash and cash equivalent at the beginning of year
126
97
2015A
(573)
(567)
Others
Effect of exchange rate changes on cash held in foreign
currencies
Net increase (decrease) in cash and cash equivalents
110
89
2014A
5,829
(652)
97
81
9,669 10,711
Change in short term investments
Others
Non-controlling interest
85
0
6,863 11,834 12,170 12,169 12,117
Mezzanine classified non-controlling
interests
Total shareholders' equity
D&A
Change in working capital
387 (1,685) (2,180)
Total liabilities
106
网易 (NTES US)
Online games
BALANCE SHEET
2015A
Netease
2014A
26 February 2016
INCOME STATEMENT
Year end Dec, RMB m
See the last page for disclaimer
Page 6 of 7
Company Rating Definition
The Benchmark: NASDAQ Composite Index
Rating
Definition
Buy
Relative Performance >15%;
or the fundamental outlook of the company or sector is favorable.
Relative Performance is 5% to 15%;
or the fundamental outlook of the company or sector is favorable.
Accumulate
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the company or sector is neutral.
Reduce
Relative Performance is -5% to -15%;
or the fundamental outlook of the company or sector is unfavorable.
Sell
Relative Performance <-15%;
or the fundamental outlook of the company or sector is unfavorable.
26 February 2016
Time Horizon: 6 to 18 months
Sector Rating Definition
The Benchmark: NASDAQ Composite Index
Time Horizon: 6 to 18 months
Rating
Outperform
Definition
Relative Performance >5%;
or the fundamental outlook of the sector is favorable.
Neutral
Relative Performance is -5% to 5%;
or the fundamental outlook of the sector is neutral.
Underperform
Relative Performance <-5%;
or the fundamental outlook of the sector is unfavorable.
(1)
The Analysts and their associates do not serve as an officer of the issuer mentioned in this Research Report.
The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.
Except for SMI Holdings Group Limited (00198 HK), Guangshen Railway Company Limited-H shares (00525 HK), China All Access
(Holdings) Limited (00633 HK), Guotai Junan International Holdings Limited (01788 HK), Binhai Investment Company Limited (02886 HK)
and Link Holdings Limited (08237 HK), Guotai Junan and its group companies do not hold equal to or more than 1% of the market
capitalization of the issuer mentioned in this Research Report.
Guotai Junan and its group companies have not had investment banking relationships with the issuer mentioned in this Research Report
within the preceding 12 months.
DISCLAIMER
This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities
(Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research
reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or
invest proprietarily).
Netease
(1)
(2)
(3)
网易 (NTES US)
DISCLOSURE OF INTERESTS
Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales
persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be
contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan.
Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does
not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking
estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable
situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where
necessary consult their own financial advisers prior to any investment decision.
This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in
any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject
Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.
See the last page for disclaimer
Company Report
© 2016 Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved.
27/F., Low Block, Grand Millennium Plaza, 181 Queen’s Road Central, Hong Kong.
Tel.: (852) 2509-9118
Fax: (852) 2509-7793
Website: www.gtja.com.hk
Page 7 of 7