Initial Reveal of Beneath The Mist

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M

Update

August 5, 2026 04:26 PM GMT

NetEase, Inc | Asia Pacific

Morgan Stanley Asia Limited+

Yang Liu

Equity Analyst

Initial Reveal of Beneath The

Mist

Tom Tang

Equity Analyst

Gary Yu

Equity Analyst

What happened: NetEase recently revealed a new title Beneath The Mist, an

innovative game genre named as "Eat, Fight, Extraction", a similar concept to the

popular extraction shooter genres but with more innovative gameplays compared to

peers‘. The title will start testing on August 17.

Our thoughts: We think this new title is worth monitoring given:

1. The developer of this title, Leihuo Studio, has a record of past success,

especially for innovation of an already established and fast-growing game

genre – i.e., Naraka Bladepoint was the first successful cold weapon battle

royale game, when others were competing in the traditional FPS. The new

title is also an advancement on the extraction shooter game, which is among

the fastest-growing genres in China right now.

2. Market has been concerned about the lack of a new game pipeline for

NetEase, Inc (NTES.O, NTES US)

China Internet and Other Services | China

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 4, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

Avg daily trading value (mn)

Overweight

Attractive

US$158.00

21

US$130.60

US$159.55-106.06

646

US$84,313

US$105

NetEase after the Sea of Remnant (debut grossing looks to be running

Fiscal Year Ending

below market expectation) and so potential positive feedback on the initial

EPS (Rmb)**

58.02 63.62 70.81 77.14

EPS (Rmb)§

61.12 64.73 71.11 77.82

Revenue, net (Rmb mn) 112,626 118,606 126,540 134,450

EBITDA (Rmb mn)

38,082 44,537 48,534 52,966

Net income (Rmb

37,344 40,756 45,152 48,956

mn)**

P/E

18.3

14.8

13.2

12.1

P/BV

3.9

3.1

2.8

2.5

ROE (%)

24.3

23.8

23.4

22.5

EV/EBITDA

12.1

8.7

7.3

6.0

Div yld (%)

0.3

0.4

0.5

testing could increase market optimism about the stock.

12/25 12/26e 12/27e 12/28e

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

§ = Consensus data is provided by Refinitiv Estimates

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