The global market is closely monitoring Federal Reserve Chairman Powell's speech at the annual meeting of global central banks. Some analysis suggests that Powell may cool down the market's recent expectations of aggressive interest rate cuts. On August 23rd, the Hang Seng Index fell 0.16% to close at 17612 points, while the Hang Seng Technology Index fell 1.13% to 3468 points.
In terms of individual stocks, Time Angel promoted rapid revenue growth through overseas business, and the stock price surged by 17%; After NetEase announced its performance, its gaming business fell below expectations and its stock price plummeted by 10%.
The angels of the era successfully 'set sail'
In the first half of this year, Time Angel expanded its overseas market and achieved overseas revenue of 228 million yuan, a year-on-year increase of 452%. The domestic market revenue was 630 million yuan, an increase of only 10%. Driven by the international market, the total revenue reached 860 million yuan, an increase of 39.8% year-on-year, and the adjusted net profit was 71.7 million yuan, an increase of 95.8% year-on-year.
Time Angel's stock price once reached HKD 472 due to rapid growth in performance, but the pandemic and weak domestic market caused a significant drop in stock price. Now, its successful overseas expansion has led to another high-speed growth in business. On August 23rd, the company's stock price surged by 17.40%.
The company stated that since Time Angel actively expanded its global market, it has achieved significant results in strategic markets such as Europe, North America, Asia Pacific, and Brazil through innovative product technology, professional medical services, and efficient production delivery. In the first half of 2024, the number of invisible orthodontic cases in the international market reached 57600, far exceeding the level of 33000 cases in the whole of last year, demonstrating the effectiveness of global business layout.
Goldman Sachs has released a research report, upgrading the investment rating of Time Angel to "buy", expressing optimism about the group's long-term growth potential brought by its promotion in the international market, as well as its leading position in the domestic industry, comprehensive product supply, relationship with dentists, and brand image. Goldman Sachs is also optimistic about Time Angel's business layout in lower tier cities in mainland China and its efforts to expand into the children and youth market. It is expected that its market share will increase from 6% in 2023 to 10% in 2027, and drive an average annual compound growth rate of 81% in profits from 2024 to 2027.
NetEase drops sharply
On August 22, NetEase released its Q2 2024 financial report, with a net income of RMB 25.5 billion, a year-on-year increase of 6.1%. The net profit attributable to the company's shareholders is 6.8 billion yuan; The adjusted net profit was 7.8 billion yuan, a year-on-year decrease of 13.3%. NetEase's gaming and related value-added services revenue was 20.1 billion yuan; NetEase Cloud Music has a revenue of 2 billion yuan; NetEase Youdao has a revenue of 1.3 billion yuan; The revenue of the innovation sector is 2.1 billion yuan. NetEase's Hong Kong stock price plummeted 10.28% after the performance release.
During the earnings conference call, NetEase executives revealed that the player data for the return of World of Warcraft exceeded expectations, with a 4:6 ratio of new to old players. Other Blizzard games will gradually return, with Hearthstone scheduled to return on September 25th. In the second half of the year, NetEase will release two Marvel IP games and new works such as "Yanyun Sixteen Sounds".
Reasons for lower than expected performance or stock price decline. Goldman Sachs reported that NetEase's deferred revenue (excluding Youdao) in the second quarter increased by 7% year-on-year, but decreased by 11% month on month, higher than the normal seasonal decline. The market increasingly believes that NetEase's stock price does not fully reflect the weakening of classic mobile game revenue, and its performance expectations may be lowered. Therefore, Goldman Sachs has lowered its target price from HKD 196 to HKD 179. Nomura Securities pointed out that NetEase's second quarter performance was slightly lower than expected. Due to the recent economic system adjustment of "Fantasy Westward Journey", the game's revenue has been affected in the short term, and this adjustment has driven out the high spending professional players.
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