Sell-side reaction to Netease Q2 2005 earnings results (NTES)

| About: NetEase, Inc (NTES)

Piper Jaffray analyst Safa Rashtchy raised his estimates on Netease (ticker: NTES) after the company reported Q2 2005 results last night. Here are key extracts from his note to clients:

....NetEase continues to successfully differentiate its games and has built a highly defensible positioning with its two highly popular games.

....Now the company is poised to repeat this success in 2006 with its new 3-D game that has been in development for two years, as well as a new 2.5d game, and a series of casual games that it recently launched.

....We are significantly increasing our estimates to reflect continued growth in the gaming segment and improving margins. For 2005, we move from $182.8M in net revenues and $2.54 in GAAP EPS to $200.3M and $3.10. For 2006, we move from net revenues of $261.6M and GAAP EPS of $3.42 to $301.7M and $4.37, respectively.

....We raise our price target from $65 to $90.

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