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Netease Inc (HK:9999)
:9999
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Netease Inc (9999) AI Stock Analysis

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HK:9999

Netease Inc

(9999)

Rating:78Outperform
Price Target:
HK$233.00
▲(8.07% Upside)
Netease Inc's overall stock score is driven by its strong financial performance and positive earnings call, which highlight robust revenue growth and strategic expansion. The fair valuation and mixed technical indicators provide a balanced view, with the financial health and growth prospects being the most significant factors.

Netease Inc (9999) vs. iShares MSCI Hong Kong ETF (EWH)

Netease Inc Business Overview & Revenue Model

Company DescriptionNetEase Inc. (9999) is a leading Chinese technology company that operates in various sectors including online gaming, e-commerce, education, and music streaming. Founded in 1997 and headquartered in Hangzhou, China, the company is best known for its robust portfolio of online games, which includes both self-developed titles and licensed games. NetEase also provides a range of Internet services, including email and advertising services, and has expanded into other digital content areas such as online education and music streaming through its various subsidiaries.
How the Company Makes MoneyNetEase 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 Earnings Call Summary

Earnings Call Date:Aug 14, 2025
(Q2-2025)
|
% Change Since: 0.09%|
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, successful new game launches, and profitability in segments like Youdao, indicating positive business momentum. However, there were challenges such as sequential declines in online games revenue and long-term growth challenges for certain titles. Overall, the positive aspects significantly outweigh the negatives.
Q2-2025 Updates
Positive Updates
Revenue Growth
Total revenues increased 9% year-over-year, driven by a diverse portfolio of games. Revenue from games and related VAS rose 14% compared to the same period last year.
Successful Game Launches
The launch of new global titles like MARVEL Mystic Mayhem and FragPunk saw strong player engagement and topped regional download charts.
Strong Performance of Existing Franchises
Fantasy Westward Journey Online reached a new all-time high peak in concurrent players in August, surpassing 2.93 million after 22 years of operation.
Operational Profit for Youdao
Youdao delivered its first second-quarter operating profit, driven by effective execution of its AI native strategy.
Cloud Music Growth
NetEase Cloud Music saw healthy growth in subscription-based membership revenues, with a 36.1% gross profit margin in the second quarter.
Strong Cash Position
Net cash of approximately RMB 142.1 billion as of June 30, 2025, compared with RMB 137 billion at the end of the last quarter.
Negative Updates
Sequential Decline in Online Games Revenue
Net revenues from online games saw a quarter-over-quarter decrease of 6%, primarily due to decreased revenue after the Chinese New Year push.
Challenges in Long-term Growth for MARVEL Mystic Mayhem
Facing long-term growth challenges for the game MARVEL Mystic Mayhem, despite initial success.
Decline in Net Revenue from Innovative Businesses
Net revenue from innovative businesses and others declined 18% year-over-year, mainly due to decreased net revenue from Yanxuan advertising services and other businesses.
Company Guidance
During NetEase's second quarter 2025 earnings call, the company highlighted a 9% year-over-year increase in total revenues, driven by a 14% rise in revenue from games and related value-added services (VAS). Several new game releases contributed to this growth, including MARVEL Mystic Mayhem, which surpassed 1 million players, and FragPunk, which ranked #2 on PlayStation's North America free-to-play download chart. The company's gross profit margin reached 64.7%, with non-GAAP net income attributable to shareholders up 22% year-over-year to RMB 9.5 billion. Additionally, NetEase emphasized its commitment to global expansion, with plans for several upcoming game releases and enhancements to its existing games. The call also noted NetEase Cloud Music's subscriber growth and Youdao's first second-quarter operating profit, highlighting the effective execution of its AI-native strategy.

Netease Inc Financial Statement Overview

Summary
Netease Inc. exhibits excellent financial health with strong profitability metrics, a solid balance sheet with low leverage, and robust cash flow generation. The company is well-positioned for sustainable growth with its consistent revenue increases and efficient operations. The low debt levels and high equity ratio reduce financial risk, while strong cash flows provide flexibility for future investments.
Income Statement
92
Very Positive
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
88
Very Positive
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
90
Very Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue109.68B105.30B103.47B96.50B87.61B73.67B
Gross Profit69.28B65.81B63.06B52.77B46.97B38.98B
EBITDA36.60B32.00B30.76B22.49B19.69B18.00B
Net Income34.21B29.70B29.42B20.34B16.86B12.06B
Balance Sheet
Total Assets208.50B195.99B185.92B172.76B153.64B141.87B
Cash, Cash Equivalents and Short-Term Investments146.69B137.58B126.72B117.46B97.53B93.47B
Total Debt11.28B12.82B20.48B28.46B21.69B20.31B
Total Liabilities54.39B53.50B57.84B63.89B54.37B48.08B
Stockholders Equity149.59B138.69B124.29B104.73B95.33B82.13B
Cash Flow
Free Cash Flow44.39B38.40B31.06B25.07B21.82B21.60B
Operating Cash Flow46.56B39.68B35.33B27.71B24.93B24.89B
Investing Cash Flow10.96B17.92B-17.04B-7.37B-7.08B-29.19B
Financing Cash Flow-21.16B-27.34B-21.47B-10.24B-12.59B9.91B

Netease Inc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price215.60
Price Trends
50DMA
207.79
Positive
100DMA
191.62
Positive
200DMA
168.93
Positive
Market Momentum
MACD
0.87
Negative
RSI
58.60
Neutral
STOCH
69.52
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 215.6 is above the 20-day moving average (MA) of 206.29, above the 50-day MA of 207.79, and above the 200-day MA of 168.93, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 58.60 is Neutral, neither overbought nor oversold. The STOCH value of 69.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9999.

Netease Inc Risk Analysis

Netease Inc disclosed 94 risk factors in its most recent earnings report. Netease Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Netease Inc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
HK$679.96B17.8724.23%1.82%2.48%19.49%
60
Neutral
$43.56B3.79-13.01%4.09%1.89%-42.25%
$744.26M9.2219.85%3.00%
$6.39B25.447.25%0.38%
71
Outperform
HK$75.97B329.861.58%22.43%
67
Neutral
HK$38.45B42.3138.63%0.51%44.92%
61
Neutral
HK$2.32B41.822.87%-31.60%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:9999
Netease Inc
215.60
90.85
72.83%
IGGGF
IGG
0.67
0.35
109.38%
KSFTF
Kingsoft
4.51
1.84
68.91%
HK:9626
Bilibili, Inc. Class Z
180.10
69.50
62.84%
HK:2400
XD, Inc.
79.30
59.93
309.40%
HK:6633
Qingci Games, Inc.
3.35
0.59
21.38%

Netease Inc Corporate Events

NetEase Appoints New Independent Director to Strengthen Governance
Aug 14, 2025

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
Aug 14, 2025

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
Aug 14, 2025

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
Jul 31, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 22, 2025