Morgan Stanley Sees In-Line 1Q Earnings for NetEase

In a report published Thursday, Morgan Stanley analyst Philip Wan reiterated an Overweight rating on

, but removed the $79.00 price target. In the report, Morgan Stanley noted, “Total net revenues were Rmb2.4bn, down 2% QoQ but up 10% YoY, 1% below our estimates. Operating profit grew 6% QoQ and 5% YoY with operating margin at 48% (vs. 45% last quarter and 51% a year ago), in line with our forecast. Diluted EPS was US$1.43 (+9% YoY), 2% below our estimates due to a higher effective tax rate.” NetEase closed on Wednesday at $71.04.