Netease Inc (9999) AI Stock Analysis

• Market Cap: HK$665.64B
• Dividend Yield: 1.8%
• Average Volume (3M): 6.01M
• Price to Earnings (P/E): 18.9
• Beta (1Y): 0.93
• Revenue Growth: 2.48%
• EPS Growth: 19.49%
• Country: HK
• Employees: 26,028
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 3.23
• Shares Outstanding: 3,167,959,000
• 10 Day Avg. Volume: 5,642,123
• 30 Day Avg. Volume: 6,010,111
• PEG Ratio: 9.86
• Price to Book (P/B): 3.00
• Price to Sales (P/S): 3.95
• P/FCF Ratio: 10.83
• 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$252.64
• Price Target Upside: 15.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: HK$233.00 ▲(6.68% Upside)

Netease Inc's strong financial performance and positive earnings call sentiment are the most significant factors driving the stock score. The technical analysis supports a positive outlook, while the valuation is reasonable, providing a balanced investment case. The absence of significant corporate events does not detract from the overall positive assessment.

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 generates revenue primarily through its online gaming segment, which constitutes a substantial portion of its income, driven by both in-game purchases and subscription fees. The company also profits from its e-commerce operations, which include sales of products across various categories and commissions from third-party merchants. Advertising services contribute to revenue as well, as businesses pay to promote their products on Netease's platforms. Furthermore, Netease's partnerships with international gaming companies to distribute and operate games in China enhance its earnings potential. The diversification across these sectors allows Netease to maintain stable revenue streams and adapt to market trends.

Netease Inc Financial Statement Overview

Summary

Netease Inc exhibits strong financial performance with consistent revenue and profit growth, robust margins, and a solid balance sheet. The company's low leverage and high return on equity highlight its financial stability and efficient capital management. Strong cash flow generation further reinforces its ability to sustain growth and provide value to shareholders.

Income Statement

Netease Inc demonstrates strong financial performance with consistent revenue growth and robust profit margins. The TTM data shows a gross profit margin of 62.71% and a net profit margin of 30.17%, indicating efficient cost management and profitability. The EBIT and EBITDA margins are also impressive at 30.21% and 32.38%, respectively. The company has maintained a positive revenue growth trajectory, with a 2.24% increase in the TTM period, reflecting steady expansion in its operations.

Balance Sheet

The balance sheet of Netease Inc is solid, characterized by a low debt-to-equity ratio of 0.068, indicating conservative leverage and financial stability. The return on equity (ROE) is strong at 24.25%, showcasing effective utilization of shareholder funds to generate profits. The equity ratio stands at 71.75%, reflecting a healthy capital structure with a substantial portion of assets financed by equity.

Cash Flow

Netease Inc's cash flow position is robust, with a significant free cash flow growth rate of 10.99% in the TTM period. The operating cash flow to net income ratio is 0.86, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 0.95, demonstrating efficient conversion of earnings into cash, which supports the company's liquidity and potential for reinvestment or shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	109.68B	105.30B	103.47B	96.50B	87.61B	73.67B
Gross Profit	69.28B	65.81B	63.06B	52.77B	46.97B	38.98B
EBITDA	36.60B	32.00B	30.76B	22.49B	19.69B	18.00B
Net Income	34.21B	29.70B	29.42B	20.34B	16.86B	12.06B
Balance Sheet
Total Assets	208.50B	195.99B	185.92B	172.76B	153.64B	141.87B
Cash, Cash Equivalents and Short-Term Investments	146.69B	137.58B	126.72B	117.46B	97.53B	93.47B
Total Debt	11.28B	12.82B	20.48B	28.46B	21.69B	20.31B
Total Liabilities	54.39B	53.50B	57.84B	63.89B	54.37B	48.08B
Stockholders Equity	149.59B	138.69B	124.29B	104.73B	95.33B	82.13B
Cash Flow
Free Cash Flow	44.39B	38.40B	31.06B	25.07B	21.82B	21.60B
Operating Cash Flow	46.56B	39.68B	35.33B	27.71B	24.93B	24.89B
Investing Cash Flow	10.96B	17.92B	-17.04B	-7.37B	-7.08B	-29.19B
Financing Cash Flow	-21.16B	-27.34B	-21.47B	-10.24B	-12.59B	9.91B

Netease Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 218.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• 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 Negative. The current price of 218.4 is below the 20-day moving average (MA) of 223.59, below the 50-day MA of 229.10, and above the 200-day MA of 193.60, indicating a neutral trend. The MACD of -2.71 indicates Positive momentum. The RSI at 42.64 is Neutral, neither overbought nor oversold. The STOCH value of 63.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9999.

Netease Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9999	78 Outperform	HK$665.64B	18.88	24.23%	1.80%	2.48%	19.49%
3888	71 Outperform	$46.63B	24.51	7.25%	0.43%	15.08%	84.20%
9626	71 Outperform	HK$93.72B	405.65	5.32%	―	16.59%	―
0799	70 Outperform	$4.41B	7.69	17.91%	3.79%	4.02%	-23.98%
2400	61 Neutral	HK$34.02B	22.49	57.06%	0.57%	51.87%	4031.49%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6633	51 Neutral	HK$2.45B	32.35	4.10%	―	-41.86%	―

Netease Inc Corporate Events

NetEase Files Proxy Voting Record with SEC

NetEase, Inc. has filed Form N-PX with the U.S. Securities and Exchange Commission, disclosing its proxy voting record on executive compensation matters for the year ending June 30, 2025. Despite being an institutional investment manager with discretion over significant U.S. securities, NetEase did not exercise voting power on proxies during the reporting period, indicating a passive stance in its investment management activities.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$233.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.

NetEase Appoints New Independent Director to Strengthen Governance

NetEase, Inc. has announced the appointment of a new independent director, as disclosed in a Form 6-K filed with the U.S. Securities and Exchange Commission. This move is part of the company’s ongoing efforts to enhance its corporate governance structure, potentially impacting its operational strategies and stakeholder relations.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$182.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.

NetEase Files Form 13F, Revealing U.S. Market Engagement

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 June 30, 2025. This filing, required for companies managing over $100 million in equity securities, highlights NetEase’s role as an institutional investment manager and reflects its strategic financial engagements in the U.S. market, potentially impacting its investment strategy and stakeholder interests.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$182.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.

NetEase, Inc. Declares Second Quarter Cash Dividend

NetEase, Inc. has announced a cash dividend of USD 0.114 per share for the second quarter ending June 30, 2025, with the payment date set for September 8, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and may positively impact its market positioning by demonstrating financial stability and shareholder focus.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$182.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.

NetEase to Announce Q2 2025 Financial Results and Dividend

NetEase, Inc. announced that its board of directors will meet on August 13, 2025, to approve the company’s unaudited financial results for the second quarter and first half of 2025, along with the quarterly dividend. The results will be published on August 14, 2025, on the Hong Kong Stock Exchange’s website. An earnings teleconference call will follow the announcement, providing stakeholders an opportunity to discuss the results with the company’s management.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$182.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.