NTES
NetEase, Inc.
$125.25
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 66.6% below fair value
You pay
$125.25
Bear
$257.53
Fair
$375.07
Bull
$503.77
Bear
$257.53
+105.6%
9% stage 1 growth, 11% discount
Fair
$375.07
+199.5%
14% stage 1 growth, 11% discount
Bull
$503.77
+302.2%
19% stage 1 growth, 11% discount
Adjust Assumptions
14.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
7.7x
Market is pricing in (growth)
-4.3%
vs 14.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (33 analysts)
$168.00
Divergence from AlphaVal
123%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $375.07 per share.
Warnings
Wall Street's average price target is $168.00 (from 33 analysts). Our estimate is 123% above the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1497 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