NetEase.com Succeeds With WoW And Strong Advertising, PT Raised To $48

Piper Jaffray has published a research report on NetEase.com NTES after the company reports the successes of WoW and strong advertising business. In the report, Piper Jaffray writes "Our Neutral rating is primarily based on valuation and our concern over the age of NetEase's three flagship games (6-8 years old) and correspondingly, the possibility of disappointing game metrics and margin pressure in the quarters ahead as these games mature. Despite its aging games, NetEase posted impressive Q4 results across its online games, advertising and WVAS businesses, exceeding our expectations. Upside to our online games revenue estimates, we understand, was primarily driven by the successful launch of WoW expansion Wrath of the Lich King (WLK) at the end of August 2010." Piper Jaffray maintains its Neutral rating and has raised the price target from $41 to $48. NetEase.com closed yesterday at $42.88.