Bernstein Starts NetEase.com (NTES) at Underperform

Bernstein initiates coverage on NetEase.com (NASDAQ: NTES) with a Underperform rating and a price target of $200.00.

Analyst Bhavtosh Vajpayee comments "NetEase derives up to three-quarters of its business from gaming, which is heavily constrained by user time. Ten percent of Chinese gamers drive 80% of industry revenue, and the committed gamer is already playing several hours daily. Pricing has driven much of industry growth thus far, but NetEase's gains, on a larger base, are likely to be more modest hereon, even as the gaming demographic (13-44 year olds) continues to decline. Meanwhile, the company's foray into cross-border ecommerce is likely to be margin dilutive for several years. Advertising from portal properties is a small buffer, but the future is hemmed in with a slowing main engine and a long road to travel in ecommerce."

For an analyst ratings summary and ratings history on NetEase.com click here. For more ratings news on NetEase.com click here.

Shares of NetEase.com closed at $239.98 yesterday.

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