NetEase (NTES) increases revenue as expenses reduce profits
China-based video game developer NetEase reported an increase in quarterly revenue thanks to strong performance in its personal computer (PC) games segment and its Youdao e-learning unit.
NetEase said Third-quarter net income rose about 19% to CNY 22.2 billion ($ 3.4 billion), beating market expectations.
The company declared a dividend of $ 0.0450 per Hong Kong-listed share and $ 0.2250 per U.S.-listed US Depository Share (ADS) for the quarter.
The net result drops
However, the company said quarterly net profit was slightly lower to CNY 3.2 billion from a year ago due to a 14.5% increase in operating expenses.
Basic net earnings per share for the third quarter was CNY 0.89 compared to CNY 0.96 a year ago. Basic net income per ADS was $ 4.43 compared to $ 4.78 a year ago.
Hong Kong-listed shares in NetEase fell 3.6% to HKD 176.50 on Wednesday. Shares were up 18.7% year-to-date in Hong Kong, as of Wednesday’s close.
NetEase said quarterly net revenue from online gaming services grew nearly 15% year-on-year to CNY 15.9 billion, with mobile games contributing around 69.2% of the total.
Youdao’s net income jumped about 55% year-on-year to CNY 1.4 billion.
NetEase said Youdao plans to divest its extracurricular tutoring business for academic subjects included in China’s compulsory education system by the end of 2021.
Cloud Village’s IPO reboots
The company said it bought 0.1 million ADS Youdao in open market transactions for $ 1.8 million, as of September 30, as part of a 50 million dollars announced earlier.
Separately, NetEase also announced that its music streaming unit, Cloud Village, has relaunched its initial public offering (IPO) request in Hong Kong, months after the listing plans were abandoned as part of the regulatory sweep of Beijing on the Chinese private sector.
âIt has been a very successful diversification season for our online games. Our flagship titles remained strong and we introduced several new hits for PC and mobile platforms. Said Managing Director William Ding.
Read more: Music streaming company Cloud Village restarts the Hong Kong IPO
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