source from：Barron's
INVESTING IDEAS
Tencent vs NetEase: Let the Games Begin
New games are the latest weapon in the battle for supremacy in China’s competitive online gaming market.

By ISABELLA ZHONG
May 29, 2017 8:38 p.m. ET
Photographer: Kiyoshi Ota/Bloomberg
Tencent and NetEase dominate China’s online games market and they’re betting new games will help win the battle for eyeballs and power their earnings to a new level.

China has overtaken the U.S. to become the world’s largest online gaming market. Sales of online games have grown in China at an average 28% annual pace since 2011 to $26 billion last year. UOB Kay Hian analyst Julia Pan expects the market to grow, albeit at a slower pace, to $30 billion by 2018. Pan expects mobile games to be the main growth driver in coming years as popular PC titles move to the smaller screen format, while the addition of more premium content will lift average revenue per user. While growth for PC games will slow, the format offers ample room for monetization, long life cycles and high entry barriers. Pan expects industry leaders Tencent (700.HK) and NetEase (NTES) to continue to nab market share given their strengths in content production and distribution.

Tencent is a gaming titan and its big user base provides plenty of upside. The stock spiked to a new high after stronger-than-expected earnings in the March quarter. Mobile gaming has been a bright spot for Tencent – the world’s largest games company by revenue - and is expected to continue to grow strongly this year as it rolls out an impressive pipeline of new mobile titles. Five of the top 10 billing mobile games in 2016 were from Tencent. While the acquisition of Finland-based Supercell, the developer of Clash of Clans, bulked up its presence in gaming, Tencent’s first self-developed title, Honor of Kings, provided a big boost to its March quarter revenues.

But there’s far more to Tencent than its core gaming business. The company is building on its strength in gaming to become an online entertainment and content powerhouse, as Barron’s Asia highlighted last week. Tencent’s 935 million users of its WeChat messaging app provide ample room to monetize traffic through advertising and grow new businesses like online payments. UBS analyst Ming Xu expects Tencent to capture increasing share of time spent online by Chinese netizens. Xu has a buy rating on the stock with an HKD310 a share target price, which implies 12% upside. Tencent shares are up 45% this year and trade at 36 times forward earnings.

NetEase has shown surprising strength in mobile gaming. HSBC analyst Chi Tsang says NetEase continues to extend the life and improve the monetization of its games. Four of the top billing mobile games in 2016 were from NetEase. Its blockbuster Onmyoji game has helped reaccelerate mobile gaming revenues and the company is set to introduce new content to the Japanese version of the game to boost monetization.

New game launches can drive future growth. NetEase has a strong pipeline of 17 new mobile titles launching this year and next, although there will be competition from Tencent’s strong lineup of upcoming titles. Tsang expects NetEase’s promising games pipeline to drive 24% average annual revenue growth in the next three years and sees the company becoming a leader in augmented reality and virtual reality games. As a leading games developer, NetEase also has a wealth of intellectual property it could tap into for other products such as films and merchandise. Tsang has a buy rating on NetEase with a $307 a share target price. The stock trades at 18 times forward earnings and pays a 1.3% dividend yield.
专栏与观点 | 博客
腾讯vs 网易：移动游戏谁才是王者
腾讯控股有限公司和网易公司主导了中国的移动游戏市场。这两家公司都希望新游戏将帮助它们在争夺用户的竞争中获胜，并推动自身的利润升至更高水平。

2017年 05月 31日 08:15
评论
腾讯控股有限公司(Tencent Holdings Ltd., 0700.HK, TCEHY, 简称：腾讯控股)和网易公司(Netease Inc., NTES)主导了中国的移动游戏市场。这两家公司都希望新游戏将帮助它们在争夺用户的竞争中获胜，并推动自身的利润升至更高水平。

中国已经取代美国成为全球最大的移动游戏市场。自2011年以来，中国移动游戏销售额平均每年增长28%，去年达到260亿美元。大华继显(UOB Kay Hian)分析师Julia Pan预计该市场还将增长，不过增速将会放缓，到2018年，中国移动游戏市场的销售额将达到300亿美元。Pan预计，未来几年移动游戏将会是主要的增长驱动因素，各款受欢迎的电脑游戏将转化为适合较小屏幕的格式，同时更多新增收费内容也将提升每用户平均收入。虽然个人电脑游戏的增长将放缓，但电脑游戏的格式为实现货币化和游戏的长生命周期提供了充足的空间，同时也建立了较高的准入门槛。Pan预计，鉴于作为行业领先者的腾讯和网易在内容生产和分销方面的实力，这两家公司将继续攫取市场份额。

腾讯是一家游戏巨头，该公司巨大的用户基数为其股价提供了充足的上涨空间。受截至3月份季度的利润强于预期的提振，该公司的股价创出新高。移动游戏一直是腾讯业务的一个亮点，预计随着该公司推出引人注目的新移动游戏，今年这块业务将继续强劲增长。以收入计算，腾讯是世界最大的游戏公司。在2016年的10款最吸金移动游戏中，有五款来自腾讯。腾讯收购开发《部落战争》(Clash of Clans)的芬兰游戏公司Supercell的交易增强了该公司在游戏领域的实力，而腾讯自主开发的游戏《王者荣耀》也大大提振了该公司截至3月季度的收入。

瑞银(UBS)分析师Ming Xu预计，腾讯在中国网民的上网时间中占据的份额将会上升。Xu对该股的评级为买进，目标价为310港元，意味着该股有12%的上涨空间。

网易在移动游戏领域表现出了惊人的实力。汇丰(HSBC)分析师Chi Tsang说，网易继续延长其游戏的寿命，并改善游戏的货币化状况。2016年的最吸金移动游戏中，有四款来自网易。网易最知名的游戏是《阴阳师》，已经帮助提振该公司的移动游戏收入，该公司已经决定在该游戏的日文版中引入新内容，以提振货币化。

发布新游戏能驱动未来的增长。网易的储备游戏数量充足，今明两年准备推出17款新移动游戏，虽然腾讯即将发布的强大的游戏阵容会与其构成竞争。Tsang预计，网易颇具希望的游戏储备将在未来三年给年收入带来平均24%的提振，并预计该公司将在增强现实和虚拟现实游戏领域成为领导者。作为一家领先的游戏开发商，网易还拥有大量知识产权，该公司可以利用这些知识产权来推出其他产品，比如电影和商品。Tsang对网易的评级为买入，目标价为307美元。