NasdaqGS:NTES

Stock Analysis Report

Executive Summary

NetEase, Inc. operates an interactive online community in the People’s Republic of China.

Snowflake

Fundamentals

Excellent balance sheet and fair value.


Similar Companies

Share Price & News

How has NetEase's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

11.5%

NasdaqGS:NTES

0.4%

US Entertainment

0.9%

US Market


1 Year Return

25.0%

NasdaqGS:NTES

5.1%

US Entertainment

0.3%

US Market

NTES outperformed the Entertainment industry which returned 5.1% over the past year.

NTES outperformed the Market in United States of America which returned -0.5% over the past year.


Share holder returns

NTESIndustryMarket
7 Day11.5%0.4%0.9%
30 Day7.6%-0.5%-1.9%
90 Day-0.1%-0.9%1.6%
1 Year26.2%25.0%5.8%5.1%2.6%0.3%
3 Year27.3%23.4%64.9%59.5%41.0%31.8%
5 Year211.2%192.9%87.1%75.5%55.2%38.0%

Price Volatility Vs. Market

How volatile is NetEase's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

45%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

NetEase's share price is below the future cash flow value, and at a moderate discount (> 20%).

NetEase's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

NetEase is good value 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

NetEase is poor value based on expected growth next year.


Price Based on Value of Assets

NetEase is overvalued based on assets compared to the US Entertainment industry average.


Next Steps

Future Growth

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

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

NetEase's revenue is expected to grow by 12.3% yearly, however this is not considered high growth (20% yearly).

NetEase's earnings are expected to grow by 11.1% yearly, however this is not considered high growth (20% yearly).

NetEase's revenue growth is expected to exceed the United States of America market average.

NetEase's earnings growth is positive but not above the United States of America market average.

NetEase's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

NetEase is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has NetEase performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

NetEase's year on year earnings growth rate has been positive over the past 5 years.

NetEase's 1-year earnings growth exceeds its 5-year average (31.1% vs 9.5%)

NetEase's earnings growth has not exceeded the US Entertainment industry average in the past year (31.1% vs 31.1%).


Return on Equity

NetEase has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

NetEase used its assets more efficiently than the US Entertainment industry average last year based on Return on Assets.


Return on Capital Employed

NetEase's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is NetEase's financial position?


Financial Position Analysis

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.


Debt to Equity History and Analysis

NetEase's level of debt (23.6%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has increased over the past 5 years (9.6% vs 23.6% today).

Debt is well covered by operating cash flow (128.4%, greater than 20% of total debt).

NetEase earns more interest than it pays, coverage of interest payments is not a concern.


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 5.4x debt.


Next Steps

Dividend

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

1.07%

Expected Dividend Yield


Dividend Yield and Payments Analysis

NetEase's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.49%).

NetEase's dividend is below the markets top 25% of dividend payers in United States of America (3.84%).

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

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 (5x coverage).


Next Steps

Management

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

12.0yrs

Average management tenure


CEO

William Ding (47yo)

13.8yrs

Tenure

0

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 Gua ...


Management Age and Tenure

12.0yrs

Average Tenure

47yo

Average Age

The average tenure for the NetEase management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

17.1yrs

Average Tenure

56yo

Average Age

The average tenure for the NetEase board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • William Ding (47yo)

    Founder

    • Tenure: 13.8yrs
  • Onward Choi (48yo)

    Consultant

    • Tenure: 0.0yrs
  • Feng Zhou

    Senior Vice President of Search Operations

    • Tenure: 12.0yrs
  • Charles Yang (36yo)

    Chief Financial Officer

    • Tenure: 2.2yrs
  • Margaret Shi

    IR Director

    • Tenure: 0.0yrs

Board Members

  • William Ding (47yo)

    Founder

    • Tenure: 13.8yrs
  • Michael Tong (48yo)

    Director

    • Tenure: 19.7yrs
  • Denny Lee (52yo)

    Director

    • Tenure: 17.3yrs
    • Compensation: CN¥12.00k
  • Lun Feng (60yo)

    Director

    • Tenure: 14.1yrs
    • Compensation: CN¥14.32k
  • Michael Leung (65yo)

    Director

    • Tenure: 17.1yrs
    • Compensation: CN¥54.00k
  • Joseph Tong (56yo)

    Director

    • Tenure: 16.4yrs
    • Compensation: CN¥54.00k
  • Alice Cheng (58yo)

    Independent Non-Executive Director

    • Tenure: 12.2yrs
    • Compensation: CN¥66.86k

Company Information

NetEase, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NetEase, Inc.
  • Ticker: NTES
  • Exchange: NasdaqGS
  • Founded: 1997
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: US$33.558b
  • Shares outstanding: 127.96m
  • Website: https://ir.netease.com

Number of Employees


Location

  • NetEase, Inc.
  • Building No. 7, West Zone
  • Zhongguancun Software Park (Phase II)
  • Beijing
  • 100193
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NTESNasdaqGS (Nasdaq Global Select)YesADR EACH REPR 25 COM STK USD0.0001USUSDJun 2000
NEHDB (Deutsche Boerse AG)YesADR EACH REPR 25 COM STK USD0.0001DEEURJun 2000
NTES NBMV (Bolsa Mexicana de Valores)YesADR EACH REPR 25 COM STK USD0.0001MXMXNJun 2000
NTESSWX (SIX Swiss Exchange)YesADR EACH REPR 25 COM STK USD0.0001CHCHFJun 2000
NTESWBAG (Wiener Boerse AG)YesADR EACH REPR 25 COM STK USD0.0001ATEURJun 2000
0K6GLSE (London Stock Exchange)YesADR EACH REPR 25 COM STK USD0.0001GBUSDJun 2000

Biography

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 Busi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/19 23:40
End of Day Share Price2019/08/19 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.