NetEase.com (NTES) Layoff Rumors Should Have No Impact on EPS - Morgan Stanley

Morgan Stanley analyst Alex Poon reiterated an Overweight rating and $130.00 price target on NetEase.com (NASDAQ: NTES) after the South China Morning Post reported that the company has downsized some games studios and projects affecting dozens of employees although there were no official layoffs. The company has not commented on the story to date.

The analyst seemed unconcerned, stating "We think the news is immaterial. NetEase had 28.2K staff at the end of 2020 (games: 15.0K; education: 4.9K; others 8.3K). R&D staff amounted to 13.6K, 48% of the total, with the majority in games. NetEase total R&D staff numbers increased 30% YoY in 2Q. NetEase is the second-largest games developer in China, and has hundreds of ongoing projects. We think the practices of shuffling staff between projects and filtering different quality projects are regular parts of operations."

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 $84.52 yesterday.

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