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 with proven track record.


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

1.7%

NTES

0.1%

US Entertainment

1.0%

US Market


1 Year Return

31.3%

NTES

1.9%

US Entertainment

8.0%

US Market

Return vs Industry: NTES exceeded the US Entertainment industry which returned 1.9% over the past year.

Return vs Market: NTES exceeded the US Market which returned 8% over the past year.


Shareholder returns

NTESIndustryMarket
7 Day1.7%0.1%1.0%
30 Day4.4%-0.9%-0.07%
90 Day14.8%-4.5%-1.0%
1 Year32.7%31.3%2.7%1.9%10.4%8.0%
3 Year8.7%5.3%52.9%47.9%46.2%36.7%
5 Year225.1%205.9%95.5%82.9%64.3%46.2%

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 compared to its fair value and its price relative to the market?

33.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NTES ($281.38) is trading below our estimate of fair value ($423.41)

Significantly Below Fair Value: NTES is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: NTES is good value based on its PE Ratio (29.2x) compared to the Entertainment industry average (43.2x).

PE vs Market: NTES is poor value based on its PE Ratio (29.2x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: NTES is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: NTES is overvalued based on its PB Ratio (5x) compared to the US Entertainment industry average (2.8x).


Next Steps

Future Growth

How is NetEase forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

15.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NTES's forecast earnings growth (15% per year) is above the savings rate (2.7%).

Earnings vs Market: NTES's earnings (15% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: NTES's earnings are forecast to grow, but not significantly.

Revenue vs Market: NTES's revenue (6.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: NTES's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NTES's Return on Equity is forecast to be low in 3 years time (18.4%).


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

Earnings Trend: NTES's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: NTES's earnings growth over the past year (31.1%) exceeds its 5-year average (9.5% per year).

Earnings vs Industry: NTES earnings growth over the past year (31.1%) exceeded the Entertainment industry 12%.


Return on Equity

High ROE: NTES's Return on Equity (15.6%) is considered low.


Return on Assets

ROA vs Industry: NTES has a higher Return on Assets than the Entertainment industry average last year.


Return on Capital Employed

ROCE Improving: NTES's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is NetEase's financial position?


Financial Position Analysis

Short Term Liabilities: NTES's short term assets (CN¥73.0B) exceeds its short term liabilities (CN¥33.9B)

Long Term Liabilities: NTES's short term assets (73.0B) exceeds its long term liabilities (1.4B)


Debt to Equity History and Analysis

Debt Level: NTES's debt to equity ratio (23.6%) is considered satisfactory

Reducing Debt: NTES's debt to equity ratio has increased from 9.6% to 23.6% over the past 5 years.

Debt Coverage: NTES's debt is well covered by operating cash flow (128.4%).

Interest Coverage: NTES earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: NTES has a low level of unsold assets or inventory.

Debt Coverage by Assets: NTES's debt is covered by short term assets (assets are 5.389140x debt).


Next Steps

Dividend

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

0.60%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years1.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: NTES's dividend (0.6%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: NTES's dividend (0.6%) is low compared to the top 25% of dividend payers in the US market (3.68%).

Stable Dividend: NTES is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: NTES is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: NTES is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NTES's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

12.2yrs

Average management tenure


CEO

William Ding (47yo)

13.9yrs

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 is a Director of Youdao, In ...


Management Age and Tenure

12.2yrs

Average Tenure

44yo

Average Age

Experienced Management: NTES's management team is seasoned and experienced (12.2 years average tenure).


Board Age and Tenure

17.3yrs

Average Tenure

56yo

Average Age

Experienced Board: NTES's board of directors are seasoned and experienced ( 17.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • William Ding (47yo)

    Founder

    • Tenure: 13.9yrs
  • Onward Choi (48yo)

    Consultant

    • Tenure: 0yrs
  • Feng Zhou (41yo)

    Senior Vice President of Search Operations

    • Tenure: 12.2yrs
  • Charles Yang (36yo)

    Chief Financial Officer

    • Tenure: 2.3yrs
  • Margaret Shi

    IR Director

    • Tenure: 0yrs

Board Members

  • William Ding (47yo)

    Founder

    • Tenure: 13.9yrs
  • Michael Tong (48yo)

    Director

    • Tenure: 19.8yrs
  • Denny Lee (52yo)

    Director

    • Tenure: 17.5yrs
    • Compensation: CN¥12.00k
  • Lun Feng (60yo)

    Director

    • Tenure: 14.3yrs
    • Compensation: CN¥14.32k
  • Michael Leung (65yo)

    Director

    • Tenure: 17.3yrs
    • Compensation: CN¥54.00k
  • Joseph Tong (56yo)

    Director

    • Tenure: 16.6yrs
    • Compensation: CN¥54.00k
  • Alice Cheng (58yo)

    Independent Non-Executive Director

    • Tenure: 12.3yrs
    • 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$36.006b
  • 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 Analysis2019/10/21 23:42
End of Day Share Price2019/10/21 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.