Stocks inched higher this morning after President Biden said he would bring tariffs on Chinese products imposed by the Trump administration into focus. The president said he was considering reducing tariffs on some products imported from China. “I am considering it. We did not impose any of those tariffs. They were imposed by the last administration, and they’re under consideration.”
President Biden’s comments boosted tickers that stand to benefit from easing of the so-called “Trump Tariffs” and added to positive sentiment from last week when China’s Vice Premier Liu He said that Beijing would encourage the further development of digital platforms and that regulators would try to “properly manage” the relationship between the government and the market and support more public listings of China’s tech companies, both domestically and overseas.
With trade regulations back in focus and Beijing signaling an easement of its crackdown on tech, the bullish case for today’s featured stock is taking shape. The share price is down 28% from its February 2021 record high, but it might not be at this level for long.
NetEase Inc (NTES) develops and operates mobile and PC games, communities, and eCommerce platforms. Its titles include some of the most popular games in China, such as the Westward Journey series, Ghost, and partnering with Activision Blizzard (ATVI) to deliver Chinese versions of Blizzard games to its users.
NetEase became a public company in 2000. Since then, the video game industry has gone from a $20 billion industry to worth nearly $200 billion. NTES has ridden this wave to become one of the world’s most valuable video game companies. It’s looking to maintain its standing as one of the leading gaming companies in China with new products, including a VR-based, open-world, role-playing game that is highly anticipated by the gaming community. The company’s leading position in the video game market is expected to grow at a double-digit CAGR over the next decade. Since its Feb 2021 peak, NTES’s share price is down more than 28%. The stock garners a solid Buy rating from the Wall Street pros offering recommendations and a median price target of $128.14, representing a 24% increase from Friday’s closing price.
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