US Stock Movement | NetEase rises over 2% pre-market as CICC expects its gross margin to remain high in the second quarter

Glonghui, July 20th – A certain exchange's stock rose 2.59% before market open, reaching $134.69. According to a research report by CICC, it is expected that the exchange's revenue for the second quarter this year will increase by 5% year-on-year, while Non-GAAP net profit attributable to shareholders will decline by 7% year-on-year, mainly due to investment losses and foreign exchange losses. The bank believes the overall performance in the second quarter remains stable, with gains on the income side from deferred revenue of Dream Journey Online (PC) and other enhancing factors. However, as the release and event update nodes for the flagship product are close to the end of June, it is expected that additional incremental contributions may be reflected in the third quarter. In terms of gross margin, benefiting from the increase in proportion of self-developed high-margin PC game revenue and optimization of channel cost sharing, it is anticipated that the gross margin for the second quarter will remain at a high level. CICC reiterated its "outperform industry" rating with a target price of HK$265 for the Hong Kong-listed shares; the target price for the US-listed shares of the exchange is $171.