Netease Inc (9999) AI Stock Analysis

• Market Cap: HK$527.78B
• Dividend Yield: 2.38%
• Average Volume (3M): 6.04M
• Price to Earnings (P/E): 16.9
• Beta (1Y): 0.97
• Revenue Growth: -0.10%
• EPS Growth: -0.45%
• Country: HK
• Employees: 26,028
• Sector: Communication Services
• Sector Strength: 82
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 3.23
• Shares Outstanding: 3,222,469,000
• 10 Day Avg. Volume: 4,262,253
• 30 Day Avg. Volume: 6,042,287
• PEG Ratio: 2.08
• Price to Book (P/B): 3.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$193.33
• Price Target Upside: 14.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

Netease Inc demonstrates strong financial performance with robust profitability and cash flow management, along with a solid balance sheet. Technical analysis supports an upward trend, and valuation metrics suggest the stock is reasonably priced. The earnings call provided optimistic guidance, though tempered by declines in other segments. Overall, the company is well-positioned in the electronic gaming industry, making it an attractive investment.

Netease Inc Business Overview & Revenue Model

Company Description

NetEase, Inc. provides online services focusing on diverse content, community, communication, and commerce in the Peoples' Republic of China and internationally. The company operates in three segments: Online Game Services, Youdao, Cloud Music, and Innovative Businesses and Others. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Listening Pod, Youdao Smart Lamp, Youdao Pocket Translator, and Youdao Super Dictionary; online courses; interactive learning apps; enterprise services, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing and provides learning diagnosis through artificial intelligence technology at schools; and Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands and manufacturers to access advanced optical character recognition capabilities and neural machine translation engine. Its products and services also include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products, including consumer electronics, food, apparel, homeware, kitchenware, and other general merchandise; NetEase Media, an internet media platform; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.

How the Company Makes Money

NetEase Inc. generates revenue primarily through its online gaming segment, which accounts for the majority of its income. The company develops and publishes a wide range of games, including in-house creations and licensed titles, which monetize through game sales and in-game purchases. Besides gaming, NetEase also earns from its e-commerce platforms, such as Yanxuan and Kaola, which offer a variety of products ranging from apparel to electronics. Additionally, NetEase Cloud Music contributes to revenue through subscriptions and advertisements, while Youdao generates income through its educational services and products. Strategic partnerships and licensing agreements with international gaming companies further bolster its revenue.

Netease Inc Financial Statement Overview

Summary

Netease Inc is financially robust, demonstrating strong growth, profitability, and cash generation. The company benefits from solid revenue and profit growth, efficient cost management, and a conservative capital structure. With low leverage and substantial free cash flow, Netease is well-positioned to sustain operations and invest in future growth opportunities in the electronic gaming and multimedia industry.

Income Statement

Netease Inc demonstrates strong revenue growth with a year-on-year increase of 1.76% from 2023 to 2024 and consistent growth over the past five years. The gross profit margin has improved to 62.5% in 2024, indicating effective cost management. The net profit margin also reflects strong profitability at 28.2%. EBIT and EBITDA margins are robust at 28.1% and 30.4%, respectively, showing solid operational performance.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.09, reflecting conservative financial management. Return on equity is strong at 21.4%, indicating effective use of shareholder funds. The equity ratio is impressive at 70.7%, suggesting a solid capital structure with ample equity backing assets, minimizing risk.

Cash Flow

Netease Inc exhibits excellent cash flow management with a substantial free cash flow growth rate of 23.65% from 2023 to 2024. The operating cash flow to net income ratio of 1.34 indicates strong cash conversion from earnings. Free cash flow to net income ratio of 1.29 further highlights efficient cash generation and reinvestment capabilities.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
105.30B	103.47B	96.50B	87.61B	73.67B
	Gross Profit
65.81B	63.06B	52.77B	46.97B	38.98B
	EBIT
29.58B	27.71B	19.63B	16.42B	14.54B
	EBITDA
32.00B	30.76B	22.49B	19.69B	18.00B
	Net Income Common Stockholders
29.70B	29.42B	20.34B	16.86B	12.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
137.58B	126.72B	117.46B	97.53B	93.47B
	Total Assets
195.99B	185.92B	172.76B	153.64B	141.87B
	Total Debt
12.82B	20.48B	27.53B	20.63B	19.50B
	Net Debt
-38.57B	-945.42M	2.64B	6.13B	10.39B
	Total Liabilities
53.50B	57.84B	63.89B	54.37B	58.88B
	Stockholders Equity
138.69B	124.29B	104.73B	95.33B	82.13B
Cash Flow		Free Cash Flow
38.40B	31.06B	25.07B	21.82B	21.60B
	Operating Cash Flow
39.68B	35.33B	27.71B	24.93B	24.89B
	Investing Cash Flow
17.92B	-17.04B	-7.37B	-7.08B	-29.19B
	Financing Cash Flow
-27.34B	-21.47B	-10.24B	-12.59B	9.91B

Netease Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 168.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9999, the sentiment is Positive. The current price of 168.9 is above the 20-day moving average (MA) of 161.00, above the 50-day MA of 158.65, and above the 200-day MA of 142.83, indicating a bullish trend. The MACD of 2.80 indicates Negative momentum. The RSI at 53.25 is Neutral, neither overbought nor oversold. The STOCH value of 31.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9999.

Netease Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9999	83 Outperform	HK$527.78B	16.95	22.64%	2.38%	-0.10%	-0.45%
9988	81 Outperform	HK$2.50T	18.94	11.98%	0.74%	3.92%	27.80%
9618	77 Outperform	HK$401.18B	9.60	19.79%	2.78%	4.83%	76.96%
Sector *	60 Neutral	$13.80B	7.25	-2.76%	3.77%	2.19%	-42.55%

Netease Inc Corporate Events

NetEase Files Form 13F, Revealing U.S. Equity Holdings

NetEase, Inc. announced the filing of Form 13F with the U.S. Securities and Exchange Commission, detailing its holdings in publicly traded companies as of March 31, 2025. This filing, required for companies managing over $100 million in equity securities, highlights NetEase’s role as an institutional investment manager and underscores its involvement in the U.S. financial markets, potentially impacting its strategic positioning and stakeholder interests.

NetEase, Inc. Schedules First Quarter 2025 Earnings Announcement

NetEase, Inc. has announced that its board of directors will meet on May 14, 2025, to approve the company’s unaudited results for the first quarter of 2025 and discuss the quarterly dividend. The results will be published on May 15, 2025, followed by an earnings teleconference call where the company’s management will discuss the results and answer questions. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction for the upcoming quarters.

NetEase Announces 2025 Annual General Meeting Details

NetEase, Inc. has announced its 2025 Annual General Meeting of Shareholders, scheduled for June 25, 2025, in Hangzhou, China. The meeting will address the re-election of five directors, ratification of auditors for the fiscal year ending December 31, 2025, and presentation of the company’s audited financial statements for 2024. This meeting is crucial for stakeholders as it will shape the company’s governance and financial oversight for the upcoming year.

NetEase Files Annual Report for Fiscal Year 2024

NetEase, Inc. has announced the filing of its annual report on Form 20-F for the fiscal year ending December 31, 2024, with the U.S. Securities and Exchange Commission. This filing is a regulatory requirement and provides stakeholders with detailed financial and operational information, reflecting the company’s compliance and transparency in its operations.

NetEase Deregisters Unissued Securities in Strategic Move

NetEase, Inc. has announced the filing of a post-effective amendment with the U.S. Securities and Exchange Commission to deregister unissued securities under its 2009 Restricted Share Unit Plan. This move is part of the company’s strategic decision to terminate the effectiveness of the registration statement, potentially impacting its financial structuring and signaling a shift in its equity management strategy.

NetEase Reports Mixed Financial Results for Q4 and Fiscal Year 2024

NetEase, Inc. announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024. The company reported net revenues of RMB26.7 billion, a 1.4% decrease from the same quarter in 2023. Despite a rise in games and related services revenue by 1.5%, declines were noted in various other segments, including Youdao, NetEase Cloud Music, and innovative businesses. The gross profit saw a slight decrease of 3.3%, while total operating expenses decreased significantly by 15.1%. These results reflect a mixed financial performance with a focus on cost management.

NetEase, Inc. Declares Fourth Quarter Cash Dividend

NetEase, Inc. announced a cash dividend of USD 0.24405 per share for the fourth quarter ending December 31, 2024. The payment of this ordinary dividend reflects NetEase’s ongoing commitment to delivering shareholder value. The ex-dividend date is set for March 5, 2025, with the payment date scheduled for March 17, 2025. This announcement underscores the company’s strong financial performance and stability, potentially reinforcing investor confidence and solidifying its market position.