1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:HSBC Qianhai Securities Limited View HSBC Qianhai Securities Research at:https:/ Equity Research Report NTE

2、performs well in beta test 2.0 and is likely to become the companys most iconic blockbuster anime game in 2026 We are optimistic about the companys earnings growth in 2026 Maintain Buy;raise TP to RMB 20.90 from RMB16.30 NTE may become a key earnings driver in 2026,which we believe has not been full

3、y priced in.Perfect World released its 2Q25 preliminary results,expecting net profit of RMB178m-RMB218m in the quarter(vs a net loss in 2Q24),in line with our expectation.Gross billings of existing products remained stable,and Jade Dynasty:World,a game launched in 1Q25 already started to contribute

4、revenue in 1H25.Its share price has risen 11%since the beginning of June 2025(CSI 300 up 7%over the same period),driven by strong performance in the second round of beta test for NTE in end-June.The stock is trading at 13x 2026e PE,still c1x SD below its historical average.New games such as NTE and

5、Jade Dynasty 2 will be further tested or launched in 2H25.We expect NTE,a potential blockbuster,to boost its profit in 2026 after the official launch,which we believe has not been fully priced in.Potential share price catalysts:The third round of beta test for NTE in 4Q25e;Jade Dynasty 2 to be launc

6、hed on 7 August 2025.NTE performs well in beta test 2.0 and will likely become the companys most iconic blockbuster comic game in 2026.In the second round of beta test launched in China in end-June,NTE performed significantly better than in its first beta test,allowing users to engage more in terms