UPDATE: Barclays Capital Reiterates Overweight Rating, Raises PT on NetEase Following Solid 2Q13 Results

In a report published Thursday, Barclays Capital analyst Alicia Yap reiterated an Overweight rating on NetEase NTES, and raised the price target from $74.00 to $76.00. In the report, Barclays Capital noted, “Following solid 2Q13 results, we reiterate our Overweight rating on NetEase and raise our PE-based price target slightly to US$76 (from US$74) on revised estimates to reflect a stronger top line and earnings growth outlook. Despite continued weakness of the WoW franchise (which now contributes less than 15% of online games revs), NTES continues to drive solid growth from its enhanced in-house games portfolio. While visibility on potential success of mobile games is low, NTES has positioned itself well on the PC front with several high-quality, differentiated user segmentation game genres in the pipeline/portfolio that will likely lead to more solid and diversified growth in the next 1-2 years. We continue to like NTES for its: 1) solid corporate governance; 2) in-house development strength; 3) diversified game portfolio with a proven hit ratio; and 4) strong cash flow generation. We also see upside risk to our estimates on potential success of its mobile games and overall mobile internet strategies.” NetEase closed on Wednesday at $61.45.