高盛-網易深度-NetEase Inc. (NTES) Hands-on experience from Where Winds Meet Mobile,key pipeline for 4Q24;Buy 09042024

3September2024|2:10PMHKT

NetEaseInc.(NTES):Hands-onexperiencefromWhereWindsMeetMobile,keypipelinefor4Q24;Buy

WhereWindsMeet(燕云十六聲),NetEase’shighlyanticipatedopenworldARPG

title,commencedits1sttimelarge-scaledualversion(Mobile+PC)betatestingon

28Aug.Postourextensivein-gameexploration,wesummarizeourthoughtsfromthegame’stest,including:1)?rst-handfeedbackincludinginnovativegameplay,richcontents&mobileversionexperiencevs.PC,andcurrentconstraint&areaof

improvement;2)potentialengagementandmonetizationoutlookandresetmarketexpectationofthegame.

Lookingintorestof2024,weexpectafewkeylaunchestodriveNTESrevenue

growth:1)Marvelrivals,SuperHeroTeam-basedPVPShootersettoreleaseonDec6,2024globally,2)WhereWindsMeet:potentiallaunchby4Q24onboth

PC/Mobile/Consoleplatforms.

Keyhighlights:

nPotentialengagementandmonetizationoutlook.WenowexpectthegametoreachapotentialRmb5.6bn?rstyeargrossingcombiningPCandmobile

versions,byadopting:

o1.4mn/3.5mnaverageMAUforPC/mobile,thegamehasreachedanexpanding15mn+preregistrationonitsof?cialwebsitein1Q24.

BenchmarkingitsprevioustitlesNaraka:BladepointPC,whicheventuallygainedanannualMAUof5mnonPCandJusticeMobilewith40mn+

preregistrationtranslatingto11mnannualMAUon?rst12monthpostlaunch.

_

oAnnualARPUofRmb1,500/Rmb1,000forPC/mobile,adoptingthe

averageARPUof?agshipRPGgames(Justice,Naraka:Bladepointand

Yimengetc.)featuringtraditionalChineseculturewithadiscountgiventhemonetizationislikelylessinvasiveforWhereWindsMeetsperthis

dual-versiontest.Similarly,ourARPUestimateformobileversionatRmb1kareslightlybelowRmb1.3kofJusticeMobile.

oMarketexpectationofthegame.Whilethegamelaunchtimehasyettocon?rm,basedonourconversationswithinvestors,webelievethemarketexpectationforthistitlehasrangedaroundRMB5-6bn,andhasbeen

adjusteddownwardoverpast6monthsgiventhecompetitivemarket

LincolnKong,CFA

+852-2978-6603|lincoln.kong@GoldmanSachs(Asia)L.L.C.

RonaldKeung,CFA

+852-2978-0856|ronald.keung@GoldmanSachs(Asia)L.L.C.

SteveQiu

+852-2978-2672|steve.qiu@GoldmanSachs(Asia)L.L.C.

LuqingZhou

+852-3465-4207|luqing.zhou@GoldmanSachs(Asia)L.L.C.

GoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,

investorsshouldbeawarethatthe?rmmayhaveacon?ictofinterestthatcouldaffecttheobjectivityofthis

report.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcerti?cationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto

/research/hedge.html.Analystsemployedbynon-USaf?liatesarenotregistered/quali?edasresearchanalystswithFINRAintheU.S.

GoldmanSachsNetEaseInc.(NTES)

environment.

Exhibit1:WhereWindsMeet:annualizedrevenueestimate

Source:Companydata,GoldmanSachsGlobalInvestmentResearch

_

3September20242

GoldmanSachsNetEaseInc.(NTES)

Exhibit2:NTES:2H24-2025keypipeline

_

Source:NPPA,Companydata,GoldmanSachsGlobalInvestmentResearch

3September20243

GoldmanSachsNetEaseInc.(NTES)

nFeedbackfromusandotherbetatesters.Ourobservationsin-gameandacrosssocialmediaplatforms(Bilibili/Tieba/TapTap/NGA)suggeststhekeyfeedbackbelow:

oInnovativeGameplayexperience:Richcontentsandopenworld

explorationmode.MostplayersnotethatWhereWindMeetsoffersanopenworldRPGwithdiversi?edgameplaythatincludesboth1)single-player

experiencethatincludes50+hoursofnarratives,2)classicmulti-player

experiencewithoptimizationofthetime-consumingelements.Webelievethediversi?edgameplayisameantobroadenthegame’suserTAM,similaras

whatJusticeMobilereachedin2023(top10mn+MAUin?rst12month).

oLeadinggraphicstechnologyembeddedsolidcombatingsystem.Manytestersbelievethegameoffersthebest-in-classgraphicsamongsimilartitles,anddiversi?edcombatingtechniquesanduserexperience,esponPC

platform.SomealsocommentedtheexperienceiscappedbyPerformanceissuethatisbothattributabletolimitationofphonespecsandperformanceoptimization.

oMonetizationupsideisapotentialconcernashowthegamewillpositionasasingleplayerorMMOgame.

SimilartoJusticeMobile,WhereWindMeetspresentthroughalessinvasivemannerwheretheconventionalpay-to-winelementsarelesssubtle.

Monetizationismoreviacharacterout?tetc.,ratherthanpay-to-win.However,thegameplayandrichcontentssofarfocusmoreonthesingleplayersmodethatmayless?tthissetofmonetizationintheinitialstage.

Thatsaid,wenotethecurrentmonetizationsystemisstillsubjecttochangebeforetheof?ciallaunchversion,andwhetherthedeveloperscouldarriveata

balancebetweenengagementofnon-coreusers(throughlessinvasive

monetization)andcoreusers(whodemandmoremonetizationtostayaheadotherusers)remainstobeseen.

WeareBuyratedonNetEase,withour12-monthSOTP-basedtargetpricesat

_

US$115/HK$179forNTES/9999.HK.Keyrisks:1)weakerperformanceoflegacygames;

2)slower-than-expectedmonetizationramp-upofnewgames;3)moreintensivecompetitioningamesandotherbusinessareas.

3September20244

GoldmanSachsNetEaseInc.(NTES)

Exhibit3:WhereWindsMeet:in-gamescreenshot

Source:Companydata

Exhibit4:WhereWindsMeet:in-gamecharacterandgraphics

-

_

Source:Companydata

3September20245

GoldmanSachsNetEaseInc.(NTES)

Exhibit5:WhereWindsMeet:in-gamecharacterandskin

Source:Companydata

_

3September20246

GoldmanSachsNetEaseInc.(NTES)

Exhibit6:WhereWindsMeet:monetization

Source:Companydata

NTES

12mpriceTarget:$115.00

price:$80.44

upside:43.0%

9999.HK

12mpriceTarget:HK$179.00

price:HK$125.30

upside:42.9%

_

BuyGSForecast

Marketcap:$51.8bnEnterpriSevalue:$35.0bn 3mADTV:$153.6mnchina

chinaGameS,Entertainment&HealthcareTech

M&ARank:3

LeaSeSincl.innetdebt&EV?:No

Revenue(Rmbmn)

EBITDA(Rmbmn)EPS($)

P/E(X)P/B(X)

Dividendyield(%)

Ndebt/EBITDA(exlease,X)CROCI(%)

FCFyield(%)

EPS($)

12/23

103,468.2

33,956.27.0613.7 3.6 1.8(3.2)30.97.4

9/23

1.82

12/24E

107,930.6

36,316.07.0411.2 2.7 3.2(3.3)28.28.5

12/23

1.60

12/25E

117,558.4

40,020.07.8610.2 2.5 3.5(3.5)31.810.2

--

--

12/26E

126,910.5

43,867.78.46 9.5 2.23.8

(3.5)31.310.2

--

--

Source:Companydata,GoldmanSachsResearchestimates,FactSet.Priceasof30Aug2024close.

3September20247

GoldmanSachsNetEaseInc.(NTES)

DisclosureAppendix

RegAC

We,LincolnKong,CFA,RonaldKeung,CFA,SteveQiuandLuqingZhou,herebycertifythatalloftheviewsexpressedinthisreportaccuratelyre?ectourpersonalviewsaboutthesubjectcompanyorcompaniesanditsortheirsecurities.Wealsocertifythatnopartofourcompensationwas,isorwillbe,directlyorindirectly,relatedtothespeci?crecommendationsorviewsexpressedinthisreport.

Unlessotherwisestated,theindividualslistedonthecoverpageofthisreportareanalystsinGoldmanSachs’GlobalInvestmentResearchdivision.

GSFactorPro?le

TheGoldmanSachsFactorPro?leprovidesinvestmentcontextforastockbycomparingkeyattributestothemarket(i.e.ourcoverageuniverse)anditssectorpeers.Thefourkeyattributesdepictedare:Growth,FinancialReturns,Multiple(e.g.valuation)andIntegrated(acompositeofGrowth,FinancialReturnsandMultiple).Growth,FinancialReturnsandMultiplearecalculatedbyusingnormalizedranksforspeci?cmetricsforeachstock.The

normalizedranksforthemetricsarethenaveragedandconvertedintopercentilesfortherelevantattribute.Theprecisecalculationofeachmetricmayvarydependingonthe?scalyear,industryandregion,butthestandardapproachisasfollows:

Growthisbasedonastock’sforward-lookingsalesgrowth,EBITDAgrowthandEPSgrowth(for?nancialstocks,onlyEPSandsalesgrowth),withahigherpercentileindicatingahighergrowthcompany.FinancialReturnsisbasedonastock’sforward-lookingROE,ROCEandCROCI(for?nancial

stocks,onlyROE),withahigherpercentileindicatingacompanywithhigher?nancialreturns.Multipleisbasedonastock’sforward-lookingP/E,P/B,price/dividend(P/D),EV/EBITDA,EV/FCFandEV/DebtAdjustedCashFlow(DACF)(for?nancialstocks,onlyP/E,P/BandP/D),withahigherpercentileindicatingastocktradingatahighermultiple.TheIntegratedpercentileiscalculatedastheaverageoftheGrowthpercentile,FinancialReturns

percentileand(100%-Multiplepercentile).

FinancialReturnsandMultipleusetheGoldmanSachsanalystforecastsatthe?scalyear-endatleastthreequartersinthefuture.Growthusesinputsforthe?scalyearatleastsevenquartersinthefuturecomparedwiththeyearatleastthreequartersinthefuture(onaper-sharebasisforallmetrics).

ForamoredetaileddescriptionofhowwecalculatetheGSFactorPro?le,pleasecontactyourGSrepresentative.

M&ARank

Acrossourglobalcoverage,weexaminestocksusinganM&Aframework,consideringbothqualitativefactorsandquantitativefactors(whichmayvaryacrosssectorsandregions)toincorporatethepotentialthatcertaincompaniescouldbeacquired.WethenassignaM&Arankasameansofscoringcompaniesunderourratedcoveragefrom1to3,with1representinghigh(30%-50%)probabilityofthecompanybecominganacquisitiontarget,2

representingmedium(15%-30%)probabilityand3representinglow(0%-15%)probability.Forcompaniesranked1or2,inlinewithourstandarddepartmentalguidelinesweincorporateanM&Acomponentintoourtargetprice.M&Arankof3isconsideredimmaterialandthereforedoesnotfactorintoourpricetarget,andmayormaynotbediscussedinresearch.

Quantum

QuantumisGoldmanSachs’proprietarydatabaseprovidingaccesstodetailed?nancialstatementhistories,forecastsandratios.Itcanbeusedforin-depthanalysisofasinglecompany,ortomakecomparisonsbetweencompaniesindifferentsectorsandmarkets.

Disclosures

Therating(s)forNetEaseInc.(ADR)andNetEaseInc.(H)is/arerelativetotheothercompaniesinits/theircoverageuniverse:37InteractiveEntertainment,AlibabaHealth,BInc.(ADR),BInc.(H),BilibiliInc.(ADR),BilibiliInc.(H),FocusMediaInformationTech,G-Bits,JD

HealthInternational,KuaishouTechnology,MangoExcellentMedia,NetEaseInc.(ADR),NetEaseInc.(H),PerfectWorld,TencentMusicEntertainmentGroup(ADR),TencentMusicEntertainmentGroup(H),XDInc.,ZhihuInc.(ADR),ZhihuInc.(H),iQIYIInc.

Company-speci?cregulatorydisclosures

_

ThefollowingdisclosuresrelatetorelationshipsbetweenTheGoldmanSachsGroup,Inc.(withitsaf?liates,“GoldmanSachs”)andcompaniescoveredbyGoldmanSachsGlobalInvestmentResearchandreferredtointhisresearch.

GoldmanSachshasreceivedcompensationforinvestmentbankingservicesinthepast12months:NetEaseInc.(ADR)($80.44)andNetEaseInc.(H)(HK$125.30)

GoldmanSachsexpectstoreceiveorintendstoseekcompensationforinvestmentbankingservicesinthenext3months:NetEaseInc.(ADR)($80.44)andNetEaseInc.(H)(HK$125.30)

GoldmanSachshadaninvestmentbankingservicesclientrelationshipduringthepast12monthswith:NetEaseInc.(ADR)($80.44)andNetEaseInc.(H)(HK$125.30)

GoldmanSachsmakesamarketinthesecuritiesorderivativesthereof:NetEaseInc.(ADR)($80.44)andNetEaseInc.(H)(HK$125.30)

Distributionofratings/investmentbankingrelationships

GoldmanSachsInvestmentResearchglobalEquitycoverageuniverse

RatingDistributionInvestmentBankingRelationships

Buy64%

Sell17%

Sell41%

Hold35%

Hold57%

Global

Buy48%

AsofJuly1,2024,GoldmanSachsGlobalInvestmentResearchhadinvestmentratingson2,925equitysecurities.GoldmanSachsassignsstocksas

BuysandSellsonvariousregionalInvestmentLists;stocksnotsoassignedaredeemedNeutral.SuchassignmentsequatetoBuy,HoldandSellforthepurposesoftheabovedisclosurerequiredbytheFINRARules.See‘Ratings,Coverageuniverseandrelatedde?nitions’below.TheInvestmentBankingRelationshipschartre?ectsthepercentageofsubjectcompanieswithineachratingcategoryforwhomGoldmanSachshasprovided

investmentbankingserviceswithintheprevioustwelvemonths.

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Pricetargetandratinghistorychart(s)

Regulatorydisclosures

DisclosuresrequiredbyUnitedStateslawsandregulations

Seecompany-speci?cregulatorydisclosuresaboveforanyofthefollowingdisclosuresrequiredastocompaniesreferredtointhisreport:managerorco-managerinapendingtransaction;1%orotherownership;compensationforcertainservices;typesofclientrelationships;managed/co-managedpublicofferingsinpriorperiods;directorships;forequitysecurities,marketmakingand/orspecialistrole.GoldmanSachstradesormaytradeasa

principalindebtsecurities(orinrelatedderivatives)ofissuersdiscussedinthisreport.

Thefollowingareadditionalrequireddisclosures:Ownershipandmaterialcon?ictsofinterest:GoldmanSachspolicyprohibitsitsanalysts,professionalsreportingtoanalystsandmembersoftheirhouseholdsfromowningsecuritiesofanycompanyintheanalyst’sareaofcoverage.

Analystcompensation:Analystsarepaidinpartbasedonthepro?tabilityofGoldmanSachs,whichincludesinvestmentbankingrevenues.Analystasof?cerordirector:GoldmanSachspolicygenerallyprohibitsitsanalysts,personsreportingtoanalystsormembersoftheirhouseholdsfrom

servingasanof?cer,directororadvisorofanycompanyintheanalyst’sareaofcoverage.Non-U.S.Analysts:Non-U.S.analystsmaynotbeassociatedpersonsofGoldmanSachs&Co.LLCandthereforemaynotbesubjecttoFINRARule2241orFINRARule2242restrictionson

communicationswithsubjectcompany,publicappearancesandtradingsecuritiesheldbytheanalysts.

Distributionofratings:Seethedistributionofratingsdisclosureabove.Pricechart:Seethepricechart,withchangesofratingsandpricetargetsinpriorperiods,above,or,ifelectronicformatorifwithrespecttomultiplecompanieswhicharethesubjectofthisreport,ontheGoldmanSachs

websiteat

/research/hedge.html

.

AdditionaldisclosuresrequiredunderthelawsandregulationsofjurisdictionsotherthantheUnitedStates

Thefollowingdisclosuresarethoserequiredbythejurisdictionindicated,excepttotheextentalreadymadeabovepursuanttoUnitedStateslawsandregulations.Australia:GoldmanSachsAustraliaPtyLtdanditsaf?liatesarenotauthoriseddeposit-takinginstitutions(asthattermisde?nedinthe

BankingAct1959(Cth))inAustraliaanddonotprovidebankingservices,norcarryonabankingbusiness,inAustralia.Thisresearch,andanyaccesstoit,isintendedonlyfor“wholesaleclients”withinthemeaningoftheAustralianCorporationsAct,unlessotherwiseagreedbyGoldmanSachs.In

producingresearchreports,membersofGlobalInvestmentResearchofGoldmanSachsAustraliamayattendsitevisitsandothermeetingshostedbythecompaniesandotherentitieswhicharethesubjectofitsresearchreports.InsomeinstancesthecostsofsuchsitevisitsormeetingsmaybemetinpartorinwholebytheissuersconcernedifGoldmanSachsAustraliaconsidersitisappropriateandreasonableinthespeci?ccircumstancesrelatingtothesitevisitormeeting.Totheextentthatthecontentsofthisdocumentcontainsany?nancialproductadvice,itisgeneraladviceonlyandhas

_

beenpreparedbyGoldmanSachswithouttakingintoaccountaclient’sobjectives,?nancialsituationorneeds.Aclientshould,beforeactingonany

suchadvice,considertheappropriatenessoftheadvicehavingregardtotheclient’sownobjectives,?nancialsituationandneeds.Acopyofcertain

GoldmanSachsAustraliaandNewZealanddisclosureofinterestsandacopyofGoldmanSachs’AustralianSell-SideResearchIndependencePolicy

Statementareavailableat:

/disclosures/australia-new-zealand/index.html

.Brazil:DisclosureinformationinrelationtoCVMResolutionn.20isavailableat

/worldwide/brazil/area/gir/index.html.Where

applicable,theBrazil-registeredanalystprimarilyresponsibleforthecontentofthisresearchreport,asde?nedinArticle20ofCVMResolutionn.20,isthe?rstauthornamedatthebeginningofthisreport,unlessindicatedotherwiseattheendofthetext.Canada:Thisinformationisbeingprovidedtoyouforinformationpurposesonlyandisnot,andundernocircumstancesshouldbeconstruedas,anadvertisement,offeringorsolicitationbyGoldmanSachs&Co.LLCforpurchasersof

securitiesinCanadatotradeinanyCanadiansecurity.GoldmanSachs&Co.LLCisnotregisteredasadealerinanyjurisdictioninCanadaunder

applicableCanadiansecuritieslawsandgenerallyisnotpermittedtotradeinCanadiansecuritiesandmaybeprohibitedfromsellingcertainsecuritiesandproductsincertainjurisdictionsinCanada.IfyouwishtotradeinanyCanadiansecuritiesorotherproductsinCanadapleasecontactGoldman

SachsCanadaInc.,anaf?liateofTheGoldmanSachsGroupInc.,oranotherregisteredCanadiandealer.HongKong:Furtherinformationonthe

securitiesofcoveredcompaniesreferredtointhisresearchmaybeobtainedonrequestfromGoldmanSachs(Asia)L.L.C.India:FurtherinformationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(India)SecuritiesPrivateLimited,Research

Analyst-SEBIRegistrationNumberINH000001493,951-A,RationalHouse,AppasahebMaratheMarg,Prabhadevi,Mumbai400025,India,CorporateIdentityNumberU74140MH2006FTC160634,Phone+912266169000,Fax+912266169001.GoldmanSachsmaybene?ciallyown1%ormoreofthesecurities(assuchtermisde?nedinclause2(h)theIndianSecuritiesContracts(Regulation)Act,1956)ofthesubjectcompanyorcompanies

referredtointhisresearchreport.Investmentinsecuritiesmarketaresubjecttomarketrisks.Readalltherelateddocumentscarefullybefore

investing.RegistrationgrantedbySEBIandcerti?cationfromNISMinnowayguaranteeperformanceoftheintermediaryorprovideanyassuranceofreturnstoinvestors.GoldmanSachs(India)SecuritiesPrivateLimitedInvestorGrievanceE-mail:india-client-support@.ComplianceOf?cer:AnilRajput|Tel:+912266169000|Email:anil.m.rajput@.Japan:Seebelow.Korea:Thisresearch,andanyaccesstoit,isintendedonlyfor

“professionalinvestors”withinthemeaningoftheFinancialServicesandCapitalMarketsAct,unlessotherwiseagreedbyGoldmanSachs.Further

informationonthesubjectcompanyorcompaniesreferredtointhisresearchmaybeobtainedfromGoldmanSachs(Asia)L.L.C.,SeoulBranch.NewZealand:GoldmanSachsNewZealandLimitedanditsaf?liatesareneither“registeredbanks”nor“deposittakers”(asde?nedintheReserveBankofNewZealandAct1989)inNewZealand.Thisresearch,andanyaccesstoit,isintendedfor“wholesaleclients”(asde?nedintheFinancialAdvisersAct2008)unlessotherwiseagreedbyGoldmanSachs.AcopyofcertainGoldmanSachsAustraliaandNewZealanddisclosureofinterestsisavailableat:

/disclosures/australia-new-zealand/index.html

.Russia:ResearchreportsdistributedintheRussianFederationarenot

3September20249

GoldmanSachsNetEaseInc.(NTES)

advertisingasde?nedintheRussianlegislation,butareinformationandanalysisnothavingproductpromotionastheirmainpurposeanddonot

provideappraisalwithinthemeaningoftheRussianlegislationonappraisalactivity.Researchreportsdonotconstituteapersonalizedinvestment

recommendationasde?nedinRussianlawsandregulations,arenotaddressedtoaspeci?cclient,andarepreparedwithoutanalyzingthe?nancial

circumstances,investmentpro?lesorriskpro?lesofclients.GoldmanSachsassumesnoresponsibilityforanyinvestmentdecisionsthatmaybetakenbyaclientoranyotherpersonbasedonthisresearchreport.Singapore:GoldmanSachs(Singapore)Pte.(CompanyNumber:198602165W),whichisregulatedbytheMonetaryAuthorityofSingapore,acceptslegalresponsibilityforthisresearch,andshouldbecontactedwithrespecttoanymatters

arisingfrom,orinconnectionwith,thisresearch.Taiwan:Thismaterialisforreferenceonlyandmustnotbereprintedwithoutpermission.Investorsshouldcarefullyconsidertheirowninvestmentrisk.Investmentresultsaretheresponsibilityoftheindividualinvestor.UnitedKingdom:PersonswhowouldbecategorizedasretailclientsintheUnitedKingdom,assuchtermisde?nedintherulesoftheFinancialConductAuthority,shouldreadthis

researchinconjunctionwithpriorGoldmanSachsresearchonthecoveredcompaniesreferredtohereinandshouldrefertotheriskwarningsthathavebeensenttothembyGoldmanSachsInternational.Acopyoftheseriskswarnings,andaglossaryofcertain?nancialtermsusedinthisreport,are

availablefromGoldmanSachsInternationalonrequest.

EuropeanUnionandUnitedKingdom:DisclosureinformationinrelationtoArticle6(2)oftheEuropeanCommissionDelegatedRegulation(EU)

(2016/958)supplementingRegulation(EU)No596/2014oftheEuropeanParliamentandoftheCouncil(includingasthatDelegatedRegulationis

implementedintoUnitedKingdomdomesticlawandregulationfollowingtheUnitedKingdom’sdeparturefromtheEuropeanUnionandtheEuropeanEconomicArea)withregardtoregulatorytechnicalstandardsforthetechnicalarrangementsforobjectivepresentationofinvestment

recommendationsorotherinformationrecommendingorsuggestinganinvestmentstrategyandfordisclosureofparticularinterestsorindicationsofcon?ictsofinterestisavailableat

/disclosures/europeanpolicy.html

whichstatestheEuropeanPolicyforManagingCon?ictsof

InterestinConnectionwithInvestmentResearch.

Japan:GoldmanSachsJapanCo.,Ltd.isaFinancialInstrumentDealerregisteredwiththeKantoFinancialBureauunderregistrationnumberKinsho69,andamemberofJapanSecuritiesDealersAssociation,FinancialFuturesAssociationofJapanTypeIIFinancialInstrumentsFirmsAssociation,The

InvestmentTrustsAssociation,Japan,andJapanInvestmentAdvisersAssociation.Salesandpurchaseofequitiesaresubjecttocommission

pre-determinedwithclientsplusconsumptiontax.Seecompany-speci?cdisclosuresastoanyapplicabledisclosuresrequiredbyJapanesestockexchanges,theJapaneseSecuritiesDealersAssociationortheJapaneseSecuritiesFinanceCompany.

Ratings,coverageuniverseandrelatedde?nitions

Buy(B),Neutral(N),Sell(S)AnalystsrecommendstocksasBuysorSellsforinclusiononvariousregionalInvestmentLists.BeingassignedaBuyorSellonanInvestmentListisdeterminedbyastock’stotalreturnpotentialrelativetoitscoverageuniverse.Anystocknotassignedas