NTES-S: Apple's Lowered Commission Rate Fosters Positive Sector Cycle, Results in Mutual Benefits

Written by Emily J. Thompson, Senior Investment Analyst

Source: aastocks

Updated: Mar 13 2026

0mins

09999-1.1%

Should l Buy 09999?

Source: aastocks

Apple's Commission Rate Reduction: Apple announced a reduction in the App Store commission rate in China, guided by domestic regulatory authorities, aiming to foster a positive industry cycle for both platforms and developers.
Impact on Mobile Internet Ecosystem: This policy change is expected to have long-term benefits for the mobile internet application ecosystem in China, promoting prosperity and collaboration among developers.

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Analyst Views on 09999

Wall Street analysts forecast 09999 stock price to rise

0 Analyst Rating

0 Buy

0 Hold

0 Sell

Current: 172.400

Low

Averages

High

Current: 172.400

Low

Averages

High

Daiwa

Buy

downgrade

$263 -> $257

2026-02-13

Reason

Daiwa

Price Target

$263 -> $257

AI Analysis

2026-02-13

downgrade

Buy

Reason

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.

CLSA

Outperform

maintain

$150

2026-02-12

Reason

CLSA

Price Target

$150

2026-02-12

maintain

Outperform

Reason

The analyst rating from CLSA on NTES-S (09999.HK) is maintained as "Outperform" despite a slight reduction in the adjusted net profit forecast for 2026 by 2%. The reasoning behind this rating includes the following points: 1. 4Q25 Results Below Expectations: The company's total revenue and adjusted EBIT for the fourth quarter were below CLSA's forecasts, indicating some short-term challenges. 2. Online Game Revenue Missed Forecast: The revenue from online games grew only 3.5% YoY, which was attributed to a high base from the previous year and a shift in revenue recognition for new games. 3. Improved Deferred Revenue Growth: Despite the revenue miss, there was a notable acceleration in deferred revenue growth, which increased by 5% QoQ and 32% YoY, suggesting potential future revenue. 4. Stronger Game Pipeline for 2026: CLSA is optimistic about the game pipeline for 2026, highlighting upcoming titles like the Diablo IV expansion pack, Sea of Remnants, and Ananta, which could drive future growth. Overall, while there are short-term concerns reflected in the recent results, the long-term outlook remains positive due to a stronger game pipeline, justifying the "Outperform" rating.

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About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.

CICC Study: Agent Rise Will Not Significantly Alter Mainstream Online Content Platforms

Mar 23 2026aastocks

Release of Seedance 2.0: ByteDance launched its AI video generation model Seedance 2.0 in February, showcasing advanced capabilities in full-modal input/output and narrative consistency, quickly gaining global attention.
Impact on Content Platforms: CICC reports that while AIGC tools like Seedance 2.0 may enhance efficiency and lower content creation barriers, they are unlikely to significantly disrupt mainstream online content platforms due to differing consumption scenarios.
Market Dynamics: The rise of AIGC tools could stabilize oversupplied markets like short videos while potentially increasing demand in undersupplied areas such as long videos and music, possibly leading to the emergence of new platforms.
Stock Market Reactions: Various companies in the tech and entertainment sectors, including Tencent and Kuaishou, are experiencing fluctuations in stock prices and short selling activity, reflecting investor sentiment amid the shift towards AI-driven products.

Jefferies Anticipates Minor Positive Effect on CN Entertainment Companies' Earnings from App Store Commission Cuts

Mar 13 2026aastocks

Apple's Commission Rate Reduction: Apple has lowered the commission rate for the China App Store from 30% to 25% for in-app purchases and paid app transactions, which is expected to positively impact the entertainment sector with a low single-digit effect on major companies' earnings this year.
Impact on Tencent: Tencent's smartphone game revenue is projected to grow by 11.7% YoY to RMB256 billion, with 30% of this revenue coming from iOS, benefiting from the reduced commission rate.
NTES-S Revenue Forecast: NTES-S is expected to see an 8.5% YoY increase in game revenue to RMB97 billion, with a minimal impact of less than 3% on earnings this year due to the commission rate change.
Kuaishou and Online Music Platforms: Kuaishou's live streaming revenue is projected to remain flat, with a less than 2% positive impact on earnings from the commission reduction, while online music platforms like TME-SW and NetEase Music are anticipated to see a 1% to 2% increase in earnings in 2026.