What’s New: Chinese internet giant NetEase Inc. reported better-than-expected results for the second quarter, boosted by strong growth in online gaming and music.
Second-quarter net revenue rose 25.9% year-on-year to 18.2 billion yuan ($2.6 billion), NetEase said in an unaudited financial report, the first since its $2.7 billion secondary listing in Hong Kong. Net profit increased 48% to 4.65 billion yuan.
More to know: The upbeat quarterly results reflected growth in NetEase’s online gaming and music businesses, said William Ding, chief executive officer of NetEase.
Net revenue from the company’s game services totaled 13.8 billion yuan, an increase of 20.9% from a year ago. Innovative businesses including NetEase Cloud Music recorded 3.7 billion yuan of revenue, up 38.7% year-on-year, the company said. Earlier this week, NetEase Cloud Music secured a multi-year music distribution licensing agreement with Universal Music Group, strengthening NetEase’s position in the online music market dominated by Tencent Holdings.
Ding said NetEase will maintain its momentum to expand overseas despite growing geopolitical tensions.
“We saw steady growth in our overseas revenue in the second quarter,” he said without giving details. Overseas businesses contributed 10% of NetEase’s revenue in the first quarter.
NetEase’s Hong Kong-traded stock closed 3.57% higher Thursday before the earning report. Its shares on Nasdaq dropped 1.78% in morning trading.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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