BRIEF: NetEase profit inches up as gaming revenue stays strong

Gaming giant NetEase Inc. (9999.HK; NTES.US) announced on Thursday its revenue rose 6.1% year-on-year to 30.6 billion yuan ($4.5 billion) in the first quarter, while its net profit increased 3.6% to 10.67 billion yuan. Its non-GAAP net profit edged up 0.3% year-on-year to 11.28 billion yuan.

Gaming and related value-added services remained the company’s main revenue source, with first-quarter revenue for that segment up 6.9% year-on-year to 25.71 billion yuan, accounting for 84% of the total. The increase was mainly driven by self-developed titles including the “Fantasy Westward Journey” series and “Where Winds Meet.”

Among its other businesses, revenue for NetEase’s Youdao (DAO.US) education arm rose 3.8% year-on-year to 1.3 billion yuan, while NetEase Cloud Music’s (9899.HK) revenue increased 6.6% to 2 billion yuan. Revenue from the company’s innovative and other businesses fell 4.6% year-on-year to 1.5 billion yuan.

NetEase CEO William Ding said the company will continue strengthening its technological capabilities while focusing on content and R&D innovation. By integrating advanced technologies with operational capabilities, the company aims to deliver premium content and richer experiences to a broader global player base.

NetEase’s stock opened higher on Friday in Hong Kong and traded at HK$186.2, up 8.44%, by the midday break. The stock has fallen about 13% so far this year.

By Lee Shih Ta

To subscribe to Bamboo Works weekly free newsletter, click here