[Shenwan Internet & Media] Calling NetEase Again! Now in Stock Connect, Self-Developed Overseas New Journey, Key Recommendation

English summary

#NetEase was included in the Hong Kong Stock Connect on June 30, with strong relative returns recently. The MMO base remains stable; new category innovations capture young people and overseas opportunities. Games like Fantasy Westward Journey form a solid base, with longevity due to mature economy/social systems and high-frequency operations. Category innovation: Big hits like Identity V (asymmetric competitive) and Yan Yun (open world), most released within three years, with one blockbuster per year in the past. Mid-term, a new wave of products is building. Lost Sea has launched on both platforms; the 2026/27 pipeline includes multiple big titles such as Guiying Cangfeng (Chinese-style mystery), Unlimited Great (urban open world), and Return to Tang (3A premium standalone game). Self-developed overseas business opens a second growth curve. The non-China market accounts for 73% globally, but PC games have a high proportion. In recent years, overseas 3A studios have been lackluster, while domestic games have improved in self-development. Chinese games in Steam Top 100 reached 11 titles in 2025 (double from 2021).…