The analyst rating from Daiwa for NTES-S (09999.HK) is a Buy, despite lowering the target price from HKD263 to HKD257. The reasoning behind this rating is based on the company's 4Q25 online game revenue and adjusted EPS being lower than market consensus by 7.0% and 22.8%, respectively. Although the non-GAAP operating profit was only slightly below consensus by 6%, the larger net profit gap was attributed to a significant investment loss of RMB1.7 billion recorded during the quarter. Despite these challenges, the maintenance of a 40% dividend payout ratio for 2025 suggests a level of confidence in the company's ongoing financial commitments.
