- Netease reported a 1Q revenue of 26.85 billion yuan, meeting estimated values.
- Games and related services generated a revenue of 21.46 billion yuan, slightly below the predicted 21.56 billion yuan.
- The profit from games and related services was 14.91 billion yuan, slightly above the estimated 14.8 billion yuan.
- Netease’s Innovative Businesses and Others had a net revenue of 1.97 billion yuan, close to the estimated figure of 2 billion yuan.
- Youdao’s net revenue was a bit higher than estimated, coming in at 1.39 billion yuan against the estimated 1.33 billion yuan.
- Netease’s Cloud Music service generated a revenue of 2.03 billion yuan, slightly above the estimated value of 2 billion yuan.
- Gross profit for the quarter hit 17.02 billion yuan, outshining the estimated 16.59 billion yuan.
- Games and related services had a gross profit margin of 69.5%, slightly higher than the estimated 68.9%.
- Youdao’s gross profit margin came in at 49%, just below the estimated 49.4%.
- Cloud Music significantly exceeded estimated gross profit margin, reaching 38% against an estimated 26.6%.
- Innovative Businesses & Others also exceeded estimated gross profit margin, achieving 33.4% against an estimated 24.6%.
- However, Netease’s shares fell by 2% in pre-market trading
- Out of 37 opinions, 36 advise to buy while one suggests to hold and none to sell.
NetEase Inc on Smartkarma
On Smartkarma, independent analyst Ying Pan has recently provided bullish coverage on NetEase Inc. According to reports titled “Strong Games Pipelines Offering More Potentials” and “Strong In-House Game Performance Drives Margins,” Ying Pan highlights the positive outlook for NetEase. In the first report, NetEase’s mixed Q4 results are noted, with a particular focus on the accelerated launch of Naraka Mobile, leading to a raised price target of US$122. The second report emphasizes NetEase’s strong revenue growth in C4Q23, driven by games like Justice Mobile and a strategic focus on low-price legacy titles, resulting in an increased target price of US$118.
A look at NetEase Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 4 | |
| Growth | 5 | |
| Resilience | 5 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 4.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
NetEase Inc, a prominent Internet technology company in China, has received impressive Smartkarma Smart Scores across various categories. With a stellar rating in Growth, Resilience, and Momentum, the company seems poised for long-term success. Its strong focus on innovation and adapting to market dynamics bodes well for future expansion and profitability.
NetEase Inc‘s solid Dividend score further enhances its attractiveness to investors seeking stable returns. While the Value score may not be the highest, the overall outlook for the company appears promising. With a diverse portfolio of services including online gaming, advertising, and e-commerce, NetEase Inc demonstrates versatility and a strong competitive edge in the digital landscape.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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