20260212-招银国际-4Q25_results_strong_contract_liabilities_growth_despite_revenue_miss_7页_831kb

> **来源：[研报客](https://pc.yanbaoke.cn)** # NetEase (NTES US) # 4Q25 results: strong contract liabilities growth despite revenue miss NetEase reported 4Q25 results: total revenue increased by $3\%$ YoY to RMB27.5bn, $4\%$ below Bloomberg consensus estimate due to slower-than-expected games revenue growth and the prolonged revenue recognition period. Operating income grew by $6\%$ YoY to RMB8.3bn, $6\%$ below consensus estimate. That said, we remain constructive on FY26E revenue growth outlook, given that 1) contract liabilities were up by $34\%$ YoY in 4Q25; 2) several highly anticipated games are lined up for launch in FY26, including Sea of Remnants. We slightly lower our FY26-27E total revenue forecasts by $1 - 2\%$ in view of the prolonged revenue recognition period. We fine-tune our SOTP-derived target price to US $161.5 (previous: US$ 164.0). Maintain BUY. ■ Strong growth of contract liabilities. Games & related VAS revenue grew by $3\%$ YoY to RMB22.0bn in 4Q25. Contract liabilities were up by $34\%$ YoY to RMB20.5bn as of Dec 2025, showing healthy game business and user engagement trend. By titles: 1) Where Winds Meet surpassed 80mn cumulative players after its global launch; 2) Fantasy Westward Journey franchise and Blizzard titles achieved record-high annual revenue in FY25; 3) legacy titles like Identity V and Eggy Party all maintained strong user engagement thanks to innovative content and events. In terms of the pipeline, several highly anticipated games are lined up for launch in FY26E: Sea of Remnants (3Q26E), YaoYaoQi (2026E), ANANTA (TBA), and Blood Message (TBA). In terms of AI, management believes that the World Model like Genie 3 will not pose direct threats to the company, but may enhance both quality and efficiency of the game development. The company has integrated AI into different phases of game development, including art, programming, animation and quality assurance. ■ Music and Youdao businesses achieved steady growth. NetEase Cloud music revenue increased by $5 \%$ YoY to RMB2.0bn in 4Q25, mainly attributable to the solid growth of online music revenue. Youdao revenue grew by $17 \%$ YoY to RMB1.6bn in 4Q25, mainly driven by the solid growth of online marketing services. Innovative businesses and others revenue dropped by $10 \%$ YoY to RMB2.0bn in 4Q25, mainly reflecting elimination of certain inter-segment transactions. - Expanding margin and steady shareholder return. Overall GPM rose by 3.4ppts YoY to $64.2\%$ in 4Q25, primarily due to revenue mix shift to higher-margin self-developed games. OPM expanded by 1.0ppt YoY to $30.2\%$ in 4Q25. The company maintained decent shareholder return of RMB14.5bn in 2025, equivalent to $c.3\%$ of the market cap. As the company's trading volume in HK exceeded $55\%$ of total trading volume in HK & US markets in 2025, the company is expected to migrate to primary listing in HK and be included in stock connect afterwards, as per HKEX listing rules. This should be an additional catalyst for NetEase in 2026, in our view. Earnings Summary (YE 31 Dec) FY24A FY25A FY26E FY27E FY28E Revenue (RMB mn) 105,295 112,626 120,763 129,077 137,432 Gross margin (%) 62.5 64.3 64.8 65.0 65.2 Adjusted net profit (RMB mn) 33,510.6 37,343.7 41,448.6 44,707.9 47,509.7 EPS (Adjusted) (RMB) 52.35 58.83 64.40 69.46 73.81 Consensus EPS (RMB) 52.35 58.83 64.55 71.36 78.52 P/S (x) 5.2 4.8 4.5 4.2 4.0 P/E (x) 18.4 16.1 14.7 13.6 12.8 Source: Company data, Bloomberg, CMBIG estimates # BUY (Maintain) Target Price US$161.50 (Previous TP US$164.00) Up/Downside 30.7% Current Price US$123.52 # China Internet Saiyi HE, CFA (852) 3916 1739 hesaiyi@cmbi.com.hk Wentao LU, CFA luwentao@cmbi.com.hk Ye TAO, CFA (852) 3850 5226 franktao@cmbi.com.hk Stock Data Mkt Cap (US$ mn) 78,718.2 Avg 3 mths t/o (US$ mn) 92.3 52w High/Low (US$) 159.34/91.37 Total Issued Shares (mn) 637.3 Source:FactSet Shareholding Structure William Lei Ding 45.8% Source: Company data Share Performance 12-mth Price Performance Absolute Relative 1-mth -11.3% -9.1% 3-mth -13.2% -11.8% 6-mth -4.2% -11.3% Source:FactSet Source:FactSet Figure 1: NetEase: earnings revision RMB bn Current Previous Change (%) FY26E FY27E FY28E FY26E FY27E FY28E FY26E FY27E FY28E Revenue 120.8 129.1 137.4 122.8 130.4 NA -1.6% -1.0% NA Gross profit 78.2 83.9 89.6 79.4 84.6 NA -1.5% -0.8% NA Operating profit 39.8 43.8 47.7 41.0 45.2 NA -2.9% -3.2% NA Adjusted net profit 41.4 44.7 47.5 43.3 46.6 NA -4.3% -4.1% NA Adjusted EPS (RMB) 64.4 69.5 73.8 67.3 72.4 NA -4.3% -4.1% NA Gross margin 64.8% 65.0% 65.2% 64.7% 64.9% NA 0.1 ppt 0.1 ppt NA Operating margin 33.0% 33.9% 34.7% 33.4% 34.7% NA -0.4 ppt -0.8 ppt NA Adjusted net margin 34.3% 34.6% 34.6% 35.3% 35.7% NA -1.0 ppt -1.1 ppt NA Source: CMBIGM estimates Figure 2: CMBIGM estimates vs consensus RMB bn CMBIGM Consensus Diff (%) FY26E FY27E FY28E FY26E FY27E FY28E FY26E FY27E FY28E Revenue 120.8 129.1 137.4 123.1 133.6 145.8 -1.9% -3.4% -5.7% Gross profit 78.2 83.9 89.6 79.4 87.1 95.0 -1.5% -3.6% -5.7% Operating profit 39.8 43.8 47.7 40.7 45.6 50.1 -2.3% -4.0% -4.9% Adjusted net profit 41.4 44.7 47.5 41.7 46.0 51.6 -0.5% -2.8% -8.0% Adjusted EPS (RMB) 64.4 69.5 73.8 64.6 71.4 78.5 -0.2% -2.7% -6.0% Gross margin 64.8% 65.0% 65.2% 64.5% 65.2% 65.2% 0.3 ppt -0.2 ppt 0.0 ppt Operating margin 33.0% 33.9% 34.7% 33.1% 34.1% 34.4% -0.1 ppt -0.2 ppt 0.3 ppt Adjusted net margin 34.3% 34.6% 34.6% 33.8% 34.5% 35.4% 0.5 ppt 0.2 ppt -0.9 ppt Source: Bloomberg, CMBIGM estimates Figure 3: NetEase: key financial data forecasts (RMB mn) 1Q24 2Q24 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 Cons. Diff% Online games revenue 21,460 20,056 20,864 21,242 24,048 22,806 23,328 21,967 23,421 -6.2% YoY% 7.0% 6.7% -4.2% 1.5% 12.1% 13.7% 11.8% 3.4% As % of total revenue 79.9% 78.7% 79.6% 79.4% 83.4% 81.8% 82.3% 79.7% Youdao revenue 1,392 1,322 1,573 1,340 1,298 1,418 1,629 1,565 1,450 7.9% YoY% 19.7% 9.5% 2.2% -9.5% -6.7% 7.2% 3.6% 16.8% As % of total revenue 5.2% 5.2% 6.0% 5.0% 4.5% 5.1% 5.7% 5.7% Cloud Music revenue 2,030 2,041 1,999 1,880 1,858 1,969 1,964 1,968 1,992 -1.2% YoY% 3.6% 4.7% 1.3% -5.3% -8.4% -3.5% -1.8% 4.7% As % of total revenue 7.6% 8.0% 7.6% 7.0% 6.4% 7.1% 6.9% 7.1% Innovative businesses 1,970 2,067 1,774 2,285 1,624 1,699 1,439 2,047 1,890 8.3% YoY% 6.1% 0.5% -10.3% -17.0% -17.6% -17.8% -18.9% -10.4% As % of total revenue 7.3% 8.1% 6.8% 8.5% 5.6% 6.1% 5.1% 7.4% Total revenue 26,852 25,486 26,210 26,748 28,829 27,892 28,359 27,547 28,787 -4.3% YoY% 7.2% 6.1% -3.9% -1.4% 7.4% 9.4% 8.2% 3.0% Gross profit margin (%) 63.4% 62.9% 62.9% 60.8% 64.1% 64.7% 64.1% 64.2% 63.4% 0.8ppt S&M expenses ratio (%) 15.0% 13.7% 14.5% 10.5% 9.4% 12.8% 15.7% 14.1% R&D expenses ratio (%) 15.5% 17.5% 16.9% 16.7% 15.2% 15.6% 16.0% 16.1% Non-GAAP net profit 8,511 7,819 7,499 9,682 11,237 9,532 9,502 7,073 9,230 -23.4% YoY% 12.5% -13.3% -13.3% 31.2% 32.0% 21.9% 26.7% -26.9% Non-GAAP NPM (%) 31.7% 30.7% 28.6% 36.2% 39.0% 34.2% 33.5% 25.7% Source: Company data, CMBIGM estimates We use sum-of-the-parts (SOTP) valuation methodology to value NetEase's four main business segments. Our SOTP-derived target price is US\(161.5, comprising: 1) US\(142.1 for the online game business (88.0% of total valuation), based on 17x 2026EV/EBIT which is on par with the industry average. 2) US\(0.7 for Youdao (0.4% of total valuation), based on 0.9x 2026E EV/revenue, on par with the industry average; 3) US\(3.4 (2.1% of total valuation) for the NetEase Cloud Music business, based on 3.0x 2026E EV/revenue, on par with the industry average; 4) US$1.5 (0.9% of total valuation) for the innovative businesses and others, based on 1.0x 2026E EV/revenue, on par with the industry average; 5) US\(13.8 for net cash. Figure 4: NetEase: SOTP Valuation (RMBmn) Valuation basis Multiple (x) 2026E sales 2026E EBIT Valuation Shareholding (%) Valuation to NetEase Valuation per ADS (US$) Online games EV/EBIT 17.0 99,445 37,292 633,960 100.0% 633,960 142.1 Youdao EV/revenue 0.9 6,204 5,584 57.1% 3,188 0.7 Cloud Music EV/revenue 3.0 8,509 25,527 59.4% 15,163 3.4 Innovative businesses EV/revenue 1.0 6,604 6,604 100.0% 6,604 1.5 Enterprise value 658,916 Net cash 61,529 13.8 Equity value 720,445 RMB/US$ 7.0 Valuation (US$mn) 102,921 No. of ADSs (mn) 637 Value per ADS (US$) 161.5 Source: Company data, CMBIG estimates Figure 5: Peer comparison: online games Company Ticker Price (LC) EBIT growth (YoY %) EV/EBIT (x) FY26E FY27E FY26E FY27E Tencent 700 HK 551.0 16 13 16 14 Electronic Arts EA US 202.6 6 23 24 19 Nexon 3659 JP 3,735.0 7 7 15 14 Bandai Namco 7832 JP 4,171.0 (12) 7 13 12 Perfect World 002624 CH 22.5 94 18 19 16 37 Interactive 002555 CH 26.2 9 9 14 13 Average EV/EBIT 17 15 Source: Bloomberg consensus estimates, CMBIGM Note: data as of market close on 10 Feb Figure 6: Peer comparison: education, online music, and e-commerce Company Ticker Price (LC) Revenue growth (YoY %) EV/revenue (x) FY26E FY27E FY26E FY27E Education New Oriental EDU US 60.9 12 11 1.1 1.0 TAL Education TAL US 12.3 32 23 1.4 1.2 Gaotu GOTU US 2.2 15 15 0.3 0.3 Average 0.9 0.8 Community TME TME US 16.9 13 12 4.1 3.7 Spotify SPOT US 476.0 15 14 3.8 3.3 BiliBili BILI US 31.0 9 9 2.3 2.1 Kuaishou 1024 HK 70.4 9 8 1.6 1.5 Average 3.0 2.7 E-commerce Alibaba BABA US 166.5 11 10 2.0 1.8 JD JD US 28.4 5 6 0.1 0.1 Pinduoduo PDD US 105.4 15 13 1.3 1.1 Vipshop VIPS US 17.6 2 4 0.4 0.4 Average 1.0 0.9 Source: Bloomberg consensus estimates, CMBIGM Note: data as of market close on 10 Feb Financial Summary INCOME STATEMENT 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Revenue 103,468 105,295 112,626 120,763 129,077 137,432 Cost of goods sold (40,405) (39,488) (40,224) (42,565) (45,156) (47,809) Gross profit 63,063 65,807 72,402 78,198 83,921 89,623 Operating expenses (35,354) (36,223) (36,567) (38,403) (40,143) (41,917) Selling expense (13,969) (14,148) (14,620) (15,699) (16,780) (17,866) Admin expense (4,900) (4,551) (4,228) (4,347) (4,518) (4,673) R&D expense (16,485) (17,525) (17,719) (18,356) (18,845) (19,378) Operating profit 27,709 29,584 35,835 39,796 43,778 47,706 Investment gain/loss 1,307 355 732 219 176 53 Other gains/(losses) 1,054 602 1,087 0 0 0 Interest income 4,120 4,921 3,953 3,603 3,145 2,280 Foreign exchange gain/loss (133) 255 (776) 0 0 0 Pre-tax profit 34,057 35,718 40,830 43,618 47,098 50,039 Income tax (4,700) (5,461) (6,033) (6,543) (7,065) (7,506) After tax profit 29,357 30,256 34,798 37,075 40,034 42,533 Minority interest 59 (559) (1,038) 0 0 0 Net profit 29,417 29,698 33,760 37,075 40,034 42,533 Adjusted net profit 32,608 33,511 37,344 41,449 44,708 47,510 BALANCE SHEET 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Current assets 142,693 153,325 180,615 213,040 247,486 282,245 Cash & equivalents 21,429 51,383 47,168 68,272 90,412 111,799 Restricted cash 2,777 3,086 4,319 4,535 4,762 5,000 Account receivables 6,422 5,669 5,338 5,609 5,875 6,130 Inventories 695 572 689 729 774 819 Prepayment 6,077 6,417 7,658 8,047 8,429 8,796 ST bank deposits 100,856 75,441 92,639 101,903 112,094 123,303 Other current assets 4,436 10,756 22,804 23,944 25,141 26,398 Non-current assets 43,232 42,667 40,800 37,971 35,533 33,431 PP&E 8,075 8,520 8,425 8,332 8,239 8,147 Other non-current assets 35,157 34,147 32,374 29,640 27,295 25,283 Total assets 185,925 195,992 221,415 251,011 283,020 315,675 Current liabilities 53,842 49,668 52,369 55,746 59,452 62,053 Short-term borrowings 19,240 11,805 6,384 6,742 7,257 6,624 Account payables 881 721 643 681 722 764 Tax payable 2,572 2,759 3,874 4,154 4,440 4,727 Other current liabilities 18,219 19,982 25,404 27,171 29,000 30,845 Accrued expenses 12,930 14,401 16,063 16,998 18,033 19,092 Non-current liabilities 3,998 3,830 3,942 4,209 4,487 4,769 Other non-current liabilities 3,998 3,830 3,942 4,209 4,487 4,769 Total liabilities 57,841 53,497 56,311 59,954 63,940 66,822 Total shareholders equity 124,286 138,686 160,296 186,249 214,273 244,046 Minority interest 3,798 3,809 4,808 4,808 4,808 4,808 Total equity and liabilities 185,925 195,992 221,415 251,011 283,020 315,675 CASH FLOW 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Operating Profit before taxation 34,057 35,718 40,830 43,618 47,098 50,039 Depreciation & amortization 3,055 2,418 2,247 4,213 4,166 4,119 Tax paid (4,700) (5,461) (6,033) (6,543) (7,065) (7,506) Change in working capital 376 3,652 8,721 2,318 2,499 2,567 Others 2,543 3,351 4,973 0 0 0 Net cash from operations 35,331 39,677 50,740 43,606 46,699 49,219 Investing Capital expenditure (4,266) (2,192) (2,007) (3,998) (3,955) (3,914) Net cash from investing (17,043) 17,916 (33,181) (11,526) (12,837) (14,201) Financing Dividend paid (8,014) (11,165) (13,826) (11,123) (12,010) (12,760) Net borrowings (8,305) (7,476) (5,799) 358 515 (633) Proceeds from share issues 0 0 0 0 0 0 Others (5,148) (8,694) (536) 0 0 0 Net cash from financing (21,467) (27,336) (20,160) (10,765) (11,495) (13,393) Net change in cash Cash at the beginning of the year 24,889 21,429 51,383 47,168 68,272 90,412 Exchange difference (202) 11 (382) 0 0 0 Others 0 0 0 0 0 0 Cash at the end of the year 21,429 51,383 47,168 68,272 90,412 111,799 GROWTH 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Revenue 7.2% 1.8% 7.0% 7.2% 6.9% 6.5% Gross profit 19.5% 4.4% 10.0% 8.0% 7.3% 6.8% Operating profit 41.2% 6.8% 21.1% 11.1% 10.0% 9.0% Net profit 49.2% 1.0% 13.7% 9.8% 8.0% 6.2% Adj. net profit 43.0% 2.8% 11.4% 11.0% 7.9% 6.3% PROFITABILITY 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Gross profit margin 60.9% 62.5% 64.3% 64.8% 65.0% 65.2% Operating margin 26.8% 28.1% 31.8% 33.0% 33.9% 34.7% Adj. net profit margin 31.5% 31.8% 33.2% 34.3% 34.6% 34.6% Return on equity (ROE) 25.7% 22.6% 22.6% 21.4% 20.0% 18.6% GEARING/LIQUIDITY/ACTIVITIES 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Net debt to equity (x) (0.8) (0.8) (0.8) (0.9) (0.9) (0.9) Current ratio (x) 2.7 3.1 3.4 3.8 4.2 4.5 Receivable turnover days 22.7 19.7 17.3 17.0 16.6 16.3 Payable turnover days 8.0 6.7 5.8 5.8 5.8 5.8 VALUATION 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec P/E 18.7 18.4 16.1 14.7 13.6 12.8 P/E (diluted) 18.9 18.6 16.2 14.8 13.7 12.9 P/B 4.4 3.9 3.4 2.9 2.5 2.2 Source: Company data, CMBIGM estimates. 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