BRIEF: NetEase’s profit jumps nearly 30% as game revenue rises 12%

NetEase Inc. (9999.HK; NTES.US) reportedon Thursday that its revenue rose more than 8% year-on-year to 28.36 billion yuan ($13 billion) in the third quarter, slowing from its 9.4% growth in the previous quarter. Its non-GAAP net profit reached 9.5 billion yuan, up 27% from a year earlier.

The company’s main revenue source from games and related value-added services increased nearly 12% to 23.3 billion yuan during the quarter, with online games accounting for 97.6% of the total. Revenue from its Youdao educational services unit grew 3.56% to 1.63 billion yuan, while its NetEase Cloud Music slipped 1.8% to 1.96 billion yuan. Revenue from its innovative and other businesses fell nearly 19%.

Founder and Chairman William Ding said the company will continue to focus on games that have already demonstrated strong performance, adopting a premium-content strategy for future releases to avoid allocating resources to projects with weaker prospects. He added that NetEase has invested heavily in exploring AI applications across game development and operations.

NetEase’s stock rose 0.4% to $133.95 on Thursday in New York after the results were announced. The stock is up 52.7% so far this year.

By Lee Shih Ta

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