UBS: NetEase -S (09999) may achieve dual major listing on the Hong Kong Stock Exchange in early 2027 and reaffirms the “buy” rating

The Zhitong Finance App learned that UBS released a research report stating that NetEase S (09999) is expected to meet the two main listing standards of the Hong Kong Stock Exchange. According to Wande data, as of December 25, the transaction amount of NetEase Hong Kong listed shares already accounted for 57% of its global (Hong Kong+ADR) transaction amount, which is higher than the 55% threshold required for the Hong Kong Stock Exchange's dual major listing transaction migration test. UBS reaffirmed NetEase's “buy” rating and maintained the target price of HK$288.6.

Based on understanding the relevant rules of the Hong Kong Stock Exchange, and assuming that there is no significant increase in NetEase's US market turnover for the remaining trading days of 2025, the bank believes that NetEase is expected to promote compliance with the Hong Kong Stock Exchange's dual major listing qualifications in 2026, and probably achieve dual major listings in early 2027.

If NetEase were to successfully obtain dual major listing positions as expected by the bank, the core benefit would be to be eligible for inclusion in the Shanghai, Shenzhen, and Hong Kong Stock Connect. However, when Nanxiangtong was included in the evaluation, NetEase did not meet the “quick inclusion rules” (currently the requirements are the top 10 constituent stocks in the Hang Seng Index), so it is expected that the inclusion time will be around September 2027.

According to the report, Southbound investors have strong interest in NetEase and are mainly optimistic about its strong online game fundamentals and a more attractive valuation level compared to A-share game companies. The bank believes that if NetEase announces the launch of a dual major listing process, it will also be a favorable catalyst for the short term. Taking Bilibili-W (09626) as an example, its stock price performance outperformed the MSCI China Index by 12 percentage points within a week of announcing the commencement of dual major listing preparations.