Nomura Says NetEase, Inc. 2Q26 Earnings May Be Jeopardized by Investments; Buy Rating Kept
Complete. Here is the key summaryNomura maintains a Buy rating on NetEase with a USD155 target price, forecasting 2Q26 revenue growth of 5% YoY to RMB29.3 billion. However, non-GAAP net profit is expected to be 8% below consensus at RMB9.4 billion due to investment losses from BABA-W and PDD Holdings. Online games revenue is projected to rise 6%, supported by evergreen titles and the new game 'Sea of Remnants'.
Nomura published a research report expecting NTES (09999.HK) +7.400 (+3.874%) Short selling $332.25M; Ratio 32.023% to chart a 5% YoY growth in revenue for 2Q26 to RMB29.3 billion, broadly in line with market expectations. However, non-GAAP net profit was forecast at RMB9.4 billion, about 8% below the market consensus of RMB10.2 billion, jeopardized by the bigger investment losses stemming from its holdings of BABA-W (09988.HK) +1.900 (+1.712%) Short selling $2.07B; Ratio 31.994% and PDD Holdings Inc. (PDD.US) .
Nomura expected NetEase's online games and value-added services revenue to elevate 6% YoY in 2Q26, driven by the resilient performance of evergreen titles such as Fantasy Westward Journey PC, Eggy Party and Naraka: Bladepoint. New game Sea of Remnants was recently launched, with performance meeting the broker's expectations. Monthly gross billings were estimated at around RMB200-300 million. Although the new game is not a blockbuster title like Naraka: Bladepoint, Nomura believed its launch will help accelerate NetEase's gaming business growth in 2H26.
The broker maintained its Buy rating and USD155 TP for NetEase, Inc. (NTES.US) .
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