NetEase, yes a Chinese stock

On Oct 12/2016, David Gardner posted, “there’s a new sheriff in town, __ fools, and its name is NetEase. The company just took over the ---- -------- scorecard’s all-time performance spot.”
Hey folks. I know a lot of people, including Saul, do not like to invest in Chinese companies. But I thought I would mention this company here for those who may be interested.
NetEase is a self described comprehensive internet company. As you can see from the table below, revenue and earnings are growing substantially.

Rev 2015 Q1 Q2 Q3 Q4 total
millions 626.8 779.5 1049.7 1220 3.6 billion

Rev 2016 Q1 Q2 Q3 Q4 total
1227.6 1347.1 1381.4 1742.6 5.6 billion

Non GAAP
Dil EPS
2015 Q1 Q2 Q3 Q4 total
1.68 1.81 2.32 2.56 8.3

2016 Q1 Q2 Q3 Q4 total
3.03 3.66 3.29 4.30 14.2

Revenue is broken down into 3 categories.
-online revenue which increased 62.8% in Q4
-advertising which increased 9.2%
-email, Ecommerce, which increased 38.2%

The largest driver of revenue was the mobile market. The company introduced 40 new mobile game titles last year and includes names such as Onmyoji, NewGhost, and licensed games from Blizzard such as Overwatch and WOW. It is planning to introduce Minecraft to its markets in July 17. It is beginning to introduce more of its games internationally with Onmyoji released to Southeast asia in December and coming releases to Japan, Canada, Europe and the US.
It believes its Ecommerce category including Kaola and Yanxuan is showing strong growth while still in development stage. In the CC it expects Kaola to grow faster than last year.
Increased its quarterly dividend by 30% to 1.01 per ADS
Board approved share repurchase program of up to 1 Billion US
The company does not give guidance but reiterated it expects strong growth
The stock rose substantially after reporting to a new high of 298$
Its TTM PE is 21

Scott

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Sorry, the tables didn’t come out well.
Scott

Scott - fwiw, leaving aside my holding in my former employer which I am selling down, NetEase has become my second largest holding behind SHOP. Interestingly it was also my second fastest double - again behind SHOP.

The results are spectacular and the longer term assurance coming from their re-up on the Activision Blizzard distribution deal is a good thing.

It has to be the best way to play the China gaming market and if it’s true that they have landed the deal to help Google Play get back into China then they have another killer franchise to operate with.

Whenever I consider selling out and transferring across to Ali Baba they just produce another killer set of results.

Ant

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Yes Ant. A Q4 earnings beat of 86cents, revenue beat of 160million.
TTM revenue growth approx. 50%
TTM earnings/share growth approx. 70%
The second best video selling game of all time, Minecraft,to be exclusively distributed in China set for July 17.
Increasing dividend
Increasing repurchase plan
No guidance given but comments for stronger growth next year
A TTM PE of 21 despite the recent run up in share price
I’m a happy investor

Scott