NTES
NetEase, Inc.
$116.55
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 62.8% below fair value
You pay
$116.55
Bear
$211.52
Fair
$313.71
Bull
$427.31
Bear
$211.52
+81.5%
9% stage 1 growth, 11% discount
Fair
$313.71
+169.2%
15% stage 1 growth, 11% discount
Bull
$427.31
+266.6%
19% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
43%
Implied Market Multiple
7.1x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $148.00 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $313.71 per share.
Warnings
Wall Street's average price target is $148.00 (from 32 analysts). Our estimate is 160% above the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1474 USD per CNY.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions