Netease Inc (9999) AI Stock Analysis

• Market Cap: HK$630.59B
• Dividend Yield: 2.1%
• Average Volume (3M): 7.18M
• Price to Earnings (P/E): 18.6
• Beta (1Y): 0.95
• Revenue Growth: 0.85%
• EPS Growth: 6.37%
• Country: HK
• Employees: 26,028
• Sector: Communication Services
• Sector Strength: 83
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 3.79
• Shares Outstanding: 3,222,469,000
• 10 Day Avg. Volume: 4,440,820
• 30 Day Avg. Volume: 7,184,538
• PEG Ratio: 2.00
• Price to Book (P/B): 4.23
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.23
• 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$224.80
• Price Target Upside: 11.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 84 Outperform
• Price Target: HK$246.00 ▲(21.90%Upside)

Netease Inc. is well-positioned with excellent financial health, strong profitability, and robust technical indicators. The valuation is reasonable, and recent earnings call insights show growth in core gaming segments, despite some challenges in non-core areas. These factors contribute to a strong overall stock rating.

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 makes money primarily through its online gaming segment, which includes both mobile and PC games. The company generates revenue from game sales, in-game purchases, and subscriptions. Key to its success are popular titles such as 'Fantasy Westward Journey' and 'Knives Out'. Additionally, NetEase earns money from its music streaming service, NetEase Cloud Music, which operates on a freemium model that combines free access with advertising revenue and subscription fees for premium features. The company's e-commerce platform, Yanxuan, also contributes to its revenue, selling a variety of products directly to consumers. Strategic partnerships with foreign game developers and technology companies, alongside a strong focus on innovation and user engagement, further bolster NetEase's earnings.

Netease Inc Financial Statement Overview

Summary

Netease Inc. exhibits excellent financial health with strong profitability metrics, including a gross profit margin of 62.7% and a net profit margin of 30.2%. The company maintains a solid balance sheet with low leverage, evidenced by a debt-to-equity ratio of 0.07, and strong cash flow generation with a free cash flow growth rate of 4.1% TTM.

Income Statement

Netease Inc. demonstrates strong profitability with a gross profit margin of 62.7% and a net profit margin of 30.2% in TTM (Trailing-Twelve-Months). The company has shown consistent revenue growth with a 3.4% growth rate from the previous year. The EBIT and EBITDA margins are robust at 30.2% and 32.4%, respectively, indicating efficient operations and healthy earnings before interest and taxes.

Balance Sheet

The balance sheet is solid with a low debt-to-equity ratio of 0.07, indicating minimal leverage and financial risk. The return on equity is strong at 22.5%, reflecting efficient use of shareholder equity to generate profits. The equity ratio stands at 71.6%, showcasing a significant proportion of the company's assets financed by equity.

Cash Flow

Netease Inc. has a strong cash flow position with a free cash flow growth rate of 4.1% TTM. The operating cash flow to net income ratio is 1.31, showing that operating cash flows comfortably cover net income. The free cash flow to net income ratio of 1.24 further underscores the company's strong cash generation capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	107.27B	105.30B	103.47B	96.50B	87.61B	73.67B
Gross Profit	67.27B	65.81B	63.06B	52.77B	46.97B	38.98B
EBITDA	34.73B	32.00B	30.76B	22.49B	19.69B	18.00B
Net Income	32.36B	29.70B	29.42B	20.34B	16.86B	12.06B
Balance Sheet
Total Assets	200.86B	195.99B	185.92B	172.76B	153.64B	141.87B
Cash, Cash Equivalents and Short-Term Investments	140.11B	137.58B	126.72B	117.46B	97.53B	93.47B
Total Debt	9.82B	12.82B	20.48B	28.46B	21.69B	20.31B
Total Liabilities	52.99B	53.50B	57.84B	63.89B	54.37B	48.08B
Stockholders Equity	143.83B	138.69B	124.29B	104.73B	95.33B	82.13B
Cash Flow
Free Cash Flow	39.99B	38.40B	31.06B	25.07B	21.82B	21.60B
Operating Cash Flow	42.23B	39.68B	35.33B	27.71B	24.93B	24.89B
Investing Cash Flow	-7.78B	17.92B	-17.04B	-7.37B	-7.08B	-29.19B
Financing Cash Flow	-35.13B	-27.34B	-21.47B	-10.24B	-12.59B	9.91B

Netease Inc Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 201.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 201.8 is below the 20-day moving average (MA) of 206.75, above the 50-day MA of 194.84, and above the 200-day MA of 156.86, indicating a neutral trend. The MACD of 2.40 indicates Positive momentum. The RSI at 48.49 is Neutral, neither overbought nor oversold. The STOCH value of 19.00 is Positive, 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	84 Outperform	HK$630.59B	18.60	23.90%	2.10%	0.85%	6.37%
Sector *	58 Neutral	C$3.43B	8.16	-17.94%	5.52%	-2.58%	-15.59%
IGGGF	―	$619.21M	8.35	19.85%	1.51%	―	―
KSFTF	―	$5.82B	25.77	7.07%	0.46%	―	―
9626	71 Outperform	HK$70.40B	―	-4.30%	―	20.62%	87.94%
2400	70 Outperform	HK$23.68B	26.33	38.63%	0.82%	44.92%	―
6633	52 Neutral	HK$2.07B	37.45	2.87%	―	-31.60%	―

Netease Inc Corporate Events

NetEase Reports Strong Q1 2025 Financial Results with Revenue Growth

NetEase, Inc. announced its unaudited financial results for the first quarter of 2025, reporting a net revenue increase of 7.4% year-over-year to RMB28.8 billion. The company’s games and related services saw a significant revenue boost of 12.1%, while other segments like Youdao and NetEase Cloud Music experienced declines. Despite these mixed results, NetEase achieved a gross profit increase of 8.6% and a reduction in operating expenses by 14.4%, leading to a net income of RMB10.3 billion.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$210.00 price target. To see the full list of analyst forecasts on Netease Inc stock, see the HK:9999 Stock Forecast page.

NetEase Announces First Quarter Dividend for 2025

NetEase, Inc. has announced a cash dividend of USD 0.135 per share for the first quarter ending March 31, 2025, with the payment date set for June 10, 2025. This announcement reflects the company’s ongoing commitment to returning value to its shareholders and may positively impact investor sentiment and the company’s market positioning.

The most recent analyst rating on (HK:9999) stock is a Buy with a HK$191.00 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. 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.