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NetEase

Nasdaq:NTES
Snowflake Description

Excellent balance sheet with limited growth.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
NTES
Nasdaq
$34B
Market Cap
  1. Home
  2. US
  3. Media
Company description

NetEase, Inc. operates an interactive online community in the People’s Republic of China. The last earnings update was 20 days ago. More info.


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NTES Share Price and Events
7 Day Returns
0.1%
NasdaqGS:NTES
-4.2%
US Entertainment
-3.9%
US Market
1 Year Returns
6.5%
NasdaqGS:NTES
8.2%
US Entertainment
1.4%
US Market
NTES Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
NetEase (NTES) 0.1% -1.4% 15.1% 6.5% 62.5% 266.8%
US Entertainment -4.2% -2.8% 5% 8.2% 64.1% 92.9%
US Market -3.9% -3.6% 1.8% 1.4% 35.8% 40.8%
1 Year Return vs Industry and Market
  • NTES underperformed the Entertainment industry which returned 8.2% over the past year.
  • NTES outperformed the Market in United States of America which returned 1.4% over the past year.
Price Volatility
NTES
Industry
5yr Volatility vs Market

Value

 Is NetEase undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of NetEase to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for NetEase.

NasdaqGS:NTES Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 27 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.7%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:NTES
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Entertainment Unlevered Beta Simply Wall St/ S&P Global 0.95
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.95 (1 + (1- 25%) (5.92%))
0.995
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.99
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.995 * 5.96%)
8.66%

Discounted Cash Flow Calculation for NasdaqGS:NTES using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for NetEase is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:NTES DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (CNY, Millions) Source Present Value
Discounted (@ 8.66%)
2019 7,684.77 Analyst x6 7,072.31
2020 10,515.06 Analyst x7 8,905.79
2021 12,355.61 Analyst x4 9,630.65
2022 13,592.67 Est @ 10.01% 9,750.49
2023 14,656.63 Est @ 7.83% 9,675.79
2024 15,579.74 Est @ 6.3% 9,465.48
2025 16,394.22 Est @ 5.23% 9,166.50
2026 17,128.42 Est @ 4.48% 8,813.74
2027 17,805.66 Est @ 3.95% 8,432.02
2028 18,444.30 Est @ 3.59% 8,038.34
Present value of next 10 years cash flows CN¥88,951.11
NasdaqGS:NTES DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= CN¥18,444.30 × (1 + 2.73%) ÷ (8.66% – 2.73%)
CN¥319,526.32
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= CN¥319,526.32 ÷ (1 + 8.66%)10
CN¥139,254.94
NasdaqGS:NTES Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= CN¥88,951.11 + CN¥139,254.94
CN¥228,206.04
Equity Value per Share
(CNY)
= Total value / Shares Outstanding
= CN¥228,206.04 / 127.96
CN¥1783.41
NasdaqGS:NTES Discount to Share Price
Calculation Result
Exchange Rate CNY/USD
(Reporting currency to currency of NasdaqGS:NTES)
0.145
Value per Share
(USD)
= Value per Share in CNY x Exchange Rate (CNY/USD)
= CN¥1783.41 x 0.145
$259.38
Value per share (USD) From above. $259.38
Current discount Discount to share price of $262.04
= -1 x ($262.04 - $259.38) / $259.38
-1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of NetEase is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for NetEase's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are NetEase's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:NTES PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-12-31) in CNY CN¥47.54
NasdaqGS:NTES Share Price ** NasdaqGS (2019-05-15) in USD $262.04
NasdaqGS:NTES Share Price converted to CNY reporting currency Exchange rate (USD/ CNY) 6.876 CN¥1801.68
United States of America Entertainment Industry PE Ratio Median Figure of 21 Publicly-Listed Entertainment Companies 26.89x
United States of America Market PE Ratio Median Figure of 3,087 Publicly-Listed Companies 17.79x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of NetEase.

NasdaqGS:NTES PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:NTES Share Price ÷ EPS (both in CNY)

= 1801.68 ÷ 47.54

37.9x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • NetEase is overvalued based on earnings compared to the US Entertainment industry average.
  • NetEase is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does NetEase's expected growth come at a high price?
Raw Data
NasdaqGS:NTES PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 37.9x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 27 Analysts
13.8%per year
United States of America Entertainment Industry PEG Ratio Median Figure of 17 Publicly-Listed Entertainment Companies 2.65x
United States of America Market PEG Ratio Median Figure of 2,113 Publicly-Listed Companies 1.52x

*Line of best fit is calculated by linear regression .

NasdaqGS:NTES PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 37.9x ÷ 13.8%

2.74x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • NetEase is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on NetEase's assets?
Raw Data
NasdaqGS:NTES PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-12-31) in CNY CN¥353.48
NasdaqGS:NTES Share Price * NasdaqGS (2019-05-15) in USD $262.04
NasdaqGS:NTES Share Price converted to CNY reporting currency Exchange rate (USD/ CNY) 6.876 CN¥1801.68
United States of America Entertainment Industry PB Ratio Median Figure of 55 Publicly-Listed Entertainment Companies 3.07x
United States of America Market PB Ratio Median Figure of 5,195 Publicly-Listed Companies 1.83x
NasdaqGS:NTES PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:NTES Share Price ÷ Book Value per Share (both in CNY)

= 1801.68 ÷ 353.48

5.1x

* Primary Listing of NetEase.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • NetEase is overvalued based on assets compared to the US Entertainment industry average.
X
Value checks
We assess NetEase's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Entertainment industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Entertainment industry average (and greater than 0)? (1 check)
  5. NetEase has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is NetEase expected to perform in the next 1 to 3 years based on estimates from 27 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
13.8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is NetEase expected to grow at an attractive rate?
  • NetEase's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • NetEase's earnings growth is positive but not above the United States of America market average.
  • NetEase's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:NTES Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:NTES Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 27 Analysts 13.8%
NasdaqGS:NTES Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 27 Analysts 17.9%
United States of America Entertainment Industry Earnings Growth Rate Market Cap Weighted Average 15.3%
United States of America Entertainment Industry Revenue Growth Rate Market Cap Weighted Average 11.5%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:NTES Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 27 Analyst Estimates (S&P Global) See Below
All numbers in CNY Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:NTES Future Estimates Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 116,369 13,815 9,364 16
2020-12-31 100,951 12,208 7,556 26
2019-12-31 84,562 9,867 6,299 27
NasdaqGS:NTES Past Financials Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income *
2018-12-31 67,156 13,416 6,152
2018-09-30 61,920 11,362 5,740
2018-06-30 57,542 9,400 6,671
2018-03-31 54,634 9,763 7,537
2017-12-31 54,102 11,889 10,708
2017-09-30 51,593 13,387 13,105
2017-06-30 48,327 15,461 13,318
2017-03-31 43,904 16,427 13,066
2016-12-31 38,179 15,488 11,605
2016-09-30 33,983 13,223 10,086
2016-06-30 31,443 11,695 9,228
2016-03-31 27,058 9,245 7,931

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • NetEase's earnings are expected to grow by 13.8% yearly, however this is not considered high growth (20% yearly).
  • NetEase's revenue is expected to grow by 17.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:NTES Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 27 Analyst Estimates (S&P Global) See Below

All data from NetEase Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:NTES Future Estimates Data
Date (Data in CNY Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 75.18 115.68 40.19 10.00
2020-12-31 61.49 89.16 39.33 15.00
2019-12-31 49.74 60.27 36.39 16.00
NasdaqGS:NTES Past Financials Data
Date (Data in CNY Millions) EPS *
2018-12-31 47.54
2018-09-30 44.06
2018-06-30 50.89
2018-03-31 57.29
2017-12-31 81.36
2017-09-30 99.60
2017-06-30 101.34
2017-03-31 99.56
2016-12-31 88.40
2016-09-30 76.80
2016-06-30 70.21
2016-03-31 60.30

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • NetEase is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess NetEase's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
NetEase has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has NetEase performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare NetEase's growth in the last year to its industry (Entertainment).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • NetEase's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.
  • NetEase's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • NetEase's 1-year earnings growth is negative, it can't be compared to the US Entertainment industry average.
Earnings and Revenue History
NetEase's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from NetEase Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:NTES Past Revenue, Cash Flow and Net Income Data
Date (Data in CNY Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-12-31 67,156.45 6,152.41 12,718.01 7,792.55
2018-09-30 61,919.81 5,740.32 12,536.67 6,879.35
2018-06-30 57,542.30 6,671.48 11,602.31 5,771.53
2018-03-31 54,634.46 7,537.07 10,888.26 4,905.58
2017-12-31 54,102.02 10,707.94 9,387.45 4,371.43
2017-09-30 51,593.40 13,105.43 8,031.35 4,006.33
2017-06-30 48,327.26 13,318.00 7,453.13 3,673.64
2017-03-31 43,904.03 13,066.49 6,679.29 3,348.42
2016-12-31 38,178.84 11,604.52 5,987.97 3,046.98
2016-09-30 33,982.78 10,085.88 5,483.40 2,756.62
2016-06-30 31,442.92 9,227.77 4,954.33 2,559.89
2016-03-31 27,058.00 7,931.48 4,346.54 2,330.42
2015-12-31 22,802.90 6,735.11 3,972.62 2,158.89
2015-09-30 18,362.93 5,841.91 3,605.77 1,963.72
2015-06-30 14,807.88 5,119.16 3,130.89 1,736.64
2015-03-31 13,007.57 4,897.19 2,764.02 1,531.97
2014-12-31 11,712.83 4,756.62 2,362.67 1,323.50
2014-09-30 10,672.26 4,722.38 1,924.93 1,169.87
2014-06-30 9,912.16 4,611.53 1,639.98 1,030.77
2014-03-31 9,409.10 4,504.28 1,510.83 962.25
2013-12-31 9,196.18 4,443.91 1,443.44 921.62
2013-09-30 9,044.63 4,215.42 1,424.16 873.00
2013-06-30 8,689.95 3,979.06 1,382.14 817.32
2013-03-31 8,387.92 3,759.26 1,245.05 766.08
2012-12-31 8,200.96 3,637.45 1,192.93 718.32
2012-09-30 8,029.27 3,527.54 1,138.05 671.48
2012-06-30 7,985.20 3,541.36 1,088.79 591.49

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • NetEase has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • NetEase used its assets less efficiently than the US Entertainment industry average last year based on Return on Assets.
  • NetEase's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess NetEase's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Entertainment industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
NetEase has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is NetEase's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up NetEase's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • NetEase is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • NetEase's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of NetEase's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 5x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from NetEase Company Filings, last reported 4 months ago.

NasdaqGS:NTES Past Debt and Equity Data
Date (Data in CNY Millions) Total Equity Total Debt Cash & Short Term Investments
2018-12-31 51,411.58 13,658.55 50,088.26
2018-09-30 46,238.94 13,645.93 42,436.61
2018-06-30 45,188.22 12,725.74 44,127.91
2018-03-31 45,474.73 9,516.16 43,337.67
2017-12-31 47,049.84 6,623.50 43,248.81
2017-09-30 46,284.01 5,732.59 40,679.80
2017-06-30 44,732.12 5,377.69 41,140.48
2017-03-31 42,480.23 4,483.44 40,143.10
2016-12-31 38,462.94 3,815.69 36,538.73
2016-09-30 35,246.54 3,005.01 30,859.95
2016-06-30 32,910.82 2,320.92 28,188.00
2016-03-31 31,148.35 2,261.42 27,019.77
2015-12-31 29,323.60 2,272.76 25,713.17
2015-09-30 27,243.13 2,226.46 24,309.03
2015-06-30 25,898.60 2,139.76 22,906.48
2015-03-31 24,749.47 1,228.34 23,730.27
2014-12-31 23,491.79 2,049.87 22,576.58
2014-09-30 22,290.51 2,061.09 21,420.20
2014-06-30 21,350.46 2,061.19 20,559.04
2014-03-31 20,329.49 1,784.11 19,822.30
2013-12-31 20,168.26 975.50 18,984.95
2013-09-30 18,888.58 983.68 17,727.43
2013-06-30 17,809.71 988.59 17,295.98
2013-03-31 16,683.45 1,003.02 16,299.47
2012-12-31 15,601.49 0.00 15,762.97
2012-09-30 15,811.09 0.00 14,935.88
2012-06-30 15,011.74 0.00 14,352.62
  • NetEase's level of debt (26.6%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (4.9% vs 26.6% today).
  • Debt is well covered by operating cash flow (98.2%, greater than 20% of total debt).
  • NetEase earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess NetEase's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. NetEase has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is NetEase's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0.66%
Current annual income from NetEase dividends. Estimated to be 0.86% next year.
If you bought $2,000 of NetEase shares you are expected to receive $13 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • NetEase's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.46%).
  • NetEase's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:NTES Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 27 Analyst Estimates (S&P Global) See Below
United States of America Entertainment Industry Average Dividend Yield Market Cap Weighted Average of 11 Stocks 1.3%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1997 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.5%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:NTES Future Dividends Estimate Data
Date (Data in CN¥) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 18.43 12.00
2020-12-31 16.34 18.00
2019-12-31 12.56 17.00
NasdaqGS:NTES Past Annualized Dividends Data
Date (Data in CN¥) Dividend per share (annual) Avg. Yield (%)
2019-04-26 11.909 0.650
2019-02-20 11.828 0.720
2018-04-20 18.951 1.290
2018-02-07 18.859 1.022
2017-05-11 27.066 1.434
2017-04-21 27.812 1.498
2017-02-15 27.695 1.421
2016-11-09 21.144 1.333
2016-08-18 20.679 1.301
2016-05-12 19.025 1.601
2016-02-25 13.102 1.442
2015-11-11 14.263 1.388
2015-04-24 9.043 1.097
2015-02-09 8.953 1.364
2014-08-13 9.044 1.552
2014-05-14 8.368 1.766
2014-02-14 8.554 2.056

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • NetEase is not paying a notable dividend for United States of America, therefore no need to check if the payments are stable.
  • NetEase is not paying a notable dividend for United States of America, therefore no need to check if the payments are increasing.
Current Payout to shareholders
What portion of NetEase's earnings are paid to the shareholders as a dividend.
  • No need to calculate the sustainability of NetEase's dividends as it is not paying a notable one for United States of America.
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (5.5x coverage).
X
Income/ dividend checks
We assess NetEase's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can NetEase afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. NetEase has a total score of 1/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of NetEase's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
William Ding
COMPENSATION CN¥0
AGE 46
TENURE AS CEO 13.5 years
CEO Bio

Mr. Lei Ding, also known as William, founded NetEase, Inc. and has been its Chief Executive Officer since November 2005. Mr. Ding founded NetEase Capital in April 2012. Mr. Ding established NetEase and Guangzhou Netease in May 1997 and has been a major force in the development of the Internet in China. He served as the Chief Architect of NetEase.com, Inc. from March 2001 to November 2005. Mr. Ding served as Acting Chief Executive Officer and Chief Operating Officer of Netease Com Inc. from June 2001 to September 2001. He served as the Co-Chief Technology Officer from July 1999 to March 2001 and Interim Chief Executive Officer of NetEase.com, Inc. from July 1999 to April 2000. During NetEase's initial two years of operation, he focused on Internet application systems. In November 1997, he introduced China's first dual language free email service to users, which was a decisive factor in the prevalence and growth of China's Internet industry. He has accumulated rich and varied experience in his professional life in the Internet world. Mr. Ding spent one year at Guangzhou Feijie Co. as a systems analyst, from June 1996 to April 1997, one year at Sybase (China) as a project manager/technical support engineer from May 1995 to May 1996 and two years at China Telecom Ningbo Branch as a technical engineer from June 1993 to May 1995. He served as the Chairman of the Board of Directors at NetEase.com, Inc. until September 2001. Mr. Ding has been a Director of NetEase, Inc. since July 1999. Mr. Ding holds a Bachelor of Science degree in Communication Technology from the University of Electronic Science and Technology of China.

CEO Compensation
  • Insufficient data for William to compare compensation growth.
  • Insufficient data for William to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the NetEase management team in years:

11.8
Average Tenure
46
Average Age
  • The average tenure for the NetEase management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

William Ding

TITLE
Founder
AGE
46
TENURE
13.5 yrs

Onward Choi

TITLE
Consultant
AGE
47

Charles Yang

TITLE
Chief Financial Officer
AGE
35
TENURE
1.9 yrs

Margaret Shi

TITLE
IR Director

Feng Zhou

TITLE
Senior Vice President of Search Operations
TENURE
11.8 yrs
Board of Directors Tenure

Average tenure and age of the NetEase board of directors in years:

16.8
Average Tenure
55
Average Age
  • The average tenure for the NetEase board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Michael Leung

TITLE
Director
COMPENSATION
CN¥54K
AGE
64
TENURE
16.8 yrs

William Ding

TITLE
Founder
AGE
46
TENURE
19.8 yrs

Denny Lee

TITLE
Director
COMPENSATION
CN¥12K
AGE
51
TENURE
17.1 yrs

Michael Tong

TITLE
Director
AGE
47
TENURE
19.4 yrs

Joseph Tong

TITLE
Director
COMPENSATION
CN¥54K
AGE
55
TENURE
16.2 yrs

Lun Feng

TITLE
Director
COMPENSATION
CN¥14K
AGE
59
TENURE
13.8 yrs

Alice Cheng

TITLE
Independent Non-Executive Director
COMPENSATION
CN¥67K
AGE
57
TENURE
11.9 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
X
Management checks
We assess NetEase's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. NetEase has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Calculating The Fair Value Of NetEase, Inc. (NASDAQ:NTES)

Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) forecast 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF (CN¥, Millions) CN¥7.68k CN¥10.52k CN¥12.36k CN¥13.59k CN¥14.66k CN¥15.58k CN¥16.39k CN¥17.13k CN¥17.81k CN¥18.44k Growth Rate Estimate Source Analyst x6 Analyst x7 Analyst x4 Est @ 10.01% Est @ 7.83% Est @ 6.3% Est @ 5.23% Est @ 4.48% Est @ 3.95% Est @ 3.59% Present Value (CN¥, Millions) Discounted @ 8.66% CN¥7.07k CN¥8.91k CN¥9.63k CN¥9.75k CN¥9.68k CN¥9.47k CN¥9.17k CN¥8.81k CN¥8.43k CN¥8.04k Present Value of 10-year Cash Flow (PVCF)= CN¥88.95b "Est" = FCF growth rate estimated by Simply Wall St The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. … Terminal Value (TV) = FCF2029 × (1 + g) ÷ (r – g) = CN¥18b × (1 + 2.7%) ÷ (8.7% – 2.7%) = CN¥320b Present Value of Terminal Value (PVTV) = TV / (1 + r)10 = CN¥CN¥320b ÷ ( 1 + 8.7%)10 = CN¥139.26b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥228.22b. … NasdaqGS:NTES Intrinsic value, May 14th 2019 Important assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.

Simply Wall St -

A Note On NetEase, Inc.'s (NASDAQ:NTES) ROE and Debt To Equity

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … Our data shows NetEase has a return on equity of 13% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Is NetEase, Inc. (NASDAQ:NTES) Undervalued After Accounting For Its Future Growth?

(NASDAQ:NTES) is considered a high growth stock. … However its last closing price of $270.54 left investors wondering whether this growth has already been factored into the share price. … Analysts are predicting good growth prospects for NetEase over the next couple of years

Simply Wall St -

Can You Imagine How Chuffed NetEase's (NASDAQ:NTES) Shareholders Feel About Its 275% Share Price Gain?

And in the last month, the share price has gained 3.9%. … One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. … This EPS growth is slower than the share price growth of 30% per year, over the same period.

Simply Wall St -

NetEase, Inc. (NASDAQ:NTES): What's The Analyst Consensus Outlook?

NetEase, Inc.'s (NASDAQ:NTES) most recent earnings announcement in December 2018a … showed … business

Simply Wall St -

What You Must Know About NetEase, Inc.'s (NASDAQ:NTES) Financial Health

Common characteristics for these big stocks are their strong balance sheet and high liquidity, which means there's plenty of stocks available to the public for trading. … In times of low liquidity in the market, these firms won’t be left high and dry. … Today I will analyse the latest financial data for NTES to determine is solvency and liquidity and whether the stock is a sound investment.

Simply Wall St -

Does NetEase, Inc. (NASDAQ:NTES) Have A Place In Your Dividend Stock Portfolio?

A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. … Check out our latest analysis for NetEase? … Take the survey and be part of one of the most advanced studies of stock market investors to date

Simply Wall St -

Is NetEase, Inc.'s (NASDAQ:NTES) ROE Of 13% Impressive?

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … Our data shows NetEase has a return on equity of 13% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Are NetEase, Inc.’s (NASDAQ:NTES) High Returns Really That Great?

Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … What is Return On Capital Employed (ROCE)? … ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business.

Simply Wall St -

Should You Think About Buying NetEase Inc (NASDAQ:NTES) Now?

led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. … As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock

Simply Wall St -

Company Info

Description

NetEase, Inc. operates an interactive online community in the People’s Republic of China. The company operates in four segments: Online Games Services, E-Commerce, Advertising Services, and Innovative Businesses and Other Services. It offers various games in a range of genres through mobile devices and PCs, including role-playing games, MMORPGs, battle arena games, simulation games, collectible card games, first-person shooter games, sandbox games, and other types of games to the Chinese market. The company also operates Kaola that sells imported maternity and baby products, skincare and cosmetics, and other general merchandise; and Yanxuan, which sells its private label products, including apparel, homeware, kitchenware, and other general merchandise. In addition, it operates NetEase News App and NetEase Websites, which provide Internet users with Chinese language-based online services that are centered around content and interactive community. Further, the company provides online advertising services comprising banner advertising, channel sponsorships, direct email, interactive media-rich sites, sponsored special events, games, contests, and other activities. Additionally, it offers online services, such as NetEase CC, a live video streaming platform; NetEase Cloud Music, a music-streaming platform; NetEase Youdao Education, an online platform offering educational content and solutions; EaseRead, an online reading platform; and NetEase Pay, a payment platform, as well as email services to individuals and corporates. 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 Beijing, the People’s Republic of China.

Details
Name: NetEase, Inc.
NTES
Exchange: NasdaqGS
Founded: 1997
$33,530,827,068
127,960,720
Website: http://ir.netease.com
Address: NetEase, Inc.
Building No. 7, West Zone,
Zhongguancun Software Park (Phase II),
Beijing,
100193,
China
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS NTES ADR EACH REPR 25 COM STK USD0.0001 Nasdaq Global Select US USD 30. Jun 2000
DB NEH ADR EACH REPR 25 COM STK USD0.0001 Deutsche Boerse AG DE EUR 30. Jun 2000
LSE 0K6G ADR EACH REPR 25 COM STK USD0.0001 London Stock Exchange GB USD 30. Jun 2000
SWX NTES ADR EACH REPR 25 COM STK USD0.0001 SIX Swiss Exchange CH CHF 30. Jun 2000
WBAG NTES ADR EACH REPR 25 COM STK USD0.0001 Wiener Boerse AG AT EUR 30. Jun 2000
BMV NTES N ADR EACH REPR 25 COM STK USD0.0001 Bolsa Mexicana de Valores MX MXN 30. Jun 2000
Number of employees
Current staff
Staff numbers
23,687
NetEase employees.
Industry
Interactive Home Entertainment
Media
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/16 01:27
End of day share price update: 2019/05/15 00:00
Last estimates confirmation: 2019/05/14
Last earnings filing: 2019/04/26
Last earnings reported: 2018/12/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.