Hong Kong investment company Day Hao Capital released today research Report

Hong Kong investment company Day Hao Capital released a study today to maintain the "buy" rating of NetEase (nasdaq:ntes) shares and the 75 dollar target share price.

The following is the full report:

October 1, 2013 to December 25 operational data points:

-The popularity of large multiplayer online (MMO) games fell by 9% on average, from 1.32 million in the third quarter to 1.16 million. Among them, "World of Warcraft" down the chain 5.7%, "Dream West Tour" fell 12.5%, and "Wu Soul" on the chain Rose 19.4%.

-A small increase in the number of servers for major MMO games. NetEase's main MMO game's average number of servers in the use of the server Rose 23 units, from the third quarter of 1038 to 1061 units. Among them, "Dream West Tour" added 10 servers, other games added 13 servers.

-the average number of simultaneous online users of the main game (ACU) is expected to drop slightly. The ACU of the main MMO game fell 1.2%, down from 2.5 million in the third quarter to 2.47 million. Among them, "Dream West Tour" fell 8.7% on the chain, the other game growth of 6.2% chain.

-the average daily page views of the portal site and the number of independent user visits are likely to rise. Average daily page views and independent user visits may increase by 43.2% and 43.1%, respectively, from 79.6 million and 19.5 million in the third quarter to 114 million and 27.8 million.

-Valuations and target stock prices. Even if NetEase's third-quarter results were disappointing, the company still had a clear advantage in terms of the content. We think NetEase may use this advantage to get new revenue sources, such as exporting games to other countries or moving to mobile gaming. In addition, NetEase holds large amounts of cash and produces a large amount of cash flow per quarter. So we maintain a "buy" rating for NetEase shares and a 75 dollar target share price. Our target share price is equal to 12.5 times times the 2014 earnings per share forecast of 5.85 dollars. NetEase currently holds about 23.50 dollars per share of cash. We will reassess the performance expectations and the target stock price after the NetEase earnings release.