News Alert: NetEase and Tencent received new game licenses (+ve)
- Chinese regulator issued a new batch of 73 new game licenses on 13 Sep 2022
- NetEase and Tencent got their first new license after the resumption of game license approval in Apr 2022
- The news should ease investor concerns about regulators’ reluctance to grant licenses to big players
- Expect positive share price reaction to NetEase (9999 HK / NTES US) and Tencent (700 HK), CMGE (302 HK)
What’s New
– The National Press and Publication Administration (NPPA) issued a new batch of 73 new game licenses on 13 Sep 2022 after HK market closed.
– NetEase and Tencent got their first new license after the resumption of game license approval in Apr 2022.
– NetEase’s new game is called “???????” and the new title for Tencent’s wholly-own subsidiary(??????????) is called “?????”.
– CMGE also received one title this time, namely “???: ????”, which is targeted to launch in 2H22.
Our View:
– We expect positive share price reaction to NetEase, Tencent and CMGE on receiving new licenses.
– This should ease investor concerns about regulators’ reluctance to grant licenses to big players.
– Noted that game approval process has accelerated in the past few months, with the number of new titles increasing from 45 in Apr to 73 in Sep. We expect the number of new titles will continue to increase in the next few rounds.
– In terms of game genre, casual games remain the key focus with 31 titles approved out of total of 73 in this batch.
– Maintain BUY for NetEase (9999 HK/ NTES US) with TP of HK$225/US$144; Tencent (700 HK) with TP of HK$432; CMGE(302 HK) with TP of HK$3.2.