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NTES 
NetEase Inc (NTES)
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Upturn Advisory Summary
12/09/2025: NTES (1-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Number of Analysts
31 Analysts rated it
Highly popular stock, broad analyst coverage, trusted insights, strong investor interest.
1 Year Target Price $165.66
1 Year Target Price $165.66
| 22 | Strong Buy |
| 7 | Buy |
| 2 | Hold |
| 0 | Sell |
| 0 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit -26.44% | Avg. Invested days 35 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  3.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 12/09/2025 |
Key Highlights
Company Size Large-Cap Stock | Market Capitalization 88.03B USD | Price to earnings Ratio 17.15 | 1Y Target Price 165.66 |
Price to earnings Ratio 17.15 | 1Y Target Price 165.66 | ||
Volume (30-day avg) 31 | Beta 0.91 | 52 Weeks Range 85.45 - 158.90 | Updated Date 12/9/2025 |
52 Weeks Range 85.45 - 158.90 | Updated Date 12/9/2025 | ||
Dividends yield (FY) 2.22% | Basic EPS (TTM) 7.98 |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date 2025-11-13 | When Before Market | Estimate 14.85 | Actual 14.73 |
Profitability
Profit Margin 32.45% | Operating Margin (TTM) 28.26% |
Management Effectiveness
Return on Assets (TTM) 11.06% | Return on Equity (TTM) 25.18% |
Valuation
Trailing PE 17.15 | Forward PE 16 | Enterprise Value 67755635868 | Price to Sales(TTM) 0.79 |
Enterprise Value 67755635868 | Price to Sales(TTM) 0.79 | ||
Enterprise Value to Revenue 4.34 | Enterprise Value to EBITDA 12.92 | Shares Outstanding 633198284 | Shares Floating 1708329779 |
Shares Outstanding 633198284 | Shares Floating 1708329779 | ||
Percent Insiders 1.4 | Percent Institutions 10.39 |
Upturn AI SWOT
NetEase Inc
Company Overview
History and Background
NetEase, Inc. was founded in 1997 by William Ding. It started as an internet technology company, evolving rapidly into a leading online game developer and publisher in China. Key milestones include its IPO on NASDAQ in 2000, the launch of its pioneering online game 'Fantasy Westward Journey' in 2001, and its expansion into music streaming, e-commerce, and education. The company has consistently adapted to the dynamic Chinese internet landscape, solidifying its position as a major player in the digital entertainment industry.
Core Business Areas
- Online Games: NetEase is primarily known for its development and publishing of massively multiplayer online role-playing games (MMORPGs) and other online game genres. It boasts a diverse portfolio of popular titles, both self-developed and licensed.
- Innovative Businesses: This segment encompasses a range of newer ventures including e-commerce platforms (like Yanxuan), cloud music services (NetEase Cloud Music), and educational technology services (NetEase Education).
- Advertising Services: NetEase provides advertising services through its various online platforms, leveraging its user base to offer targeted advertising solutions.
Leadership and Structure
NetEase is a publicly traded company. William Ding (Ding Lei) is the founder, Chairman, and CEO. The company operates with a hierarchical management structure, with various departments overseeing game development, operations, marketing, R&D, and its innovative business segments. Specific details on the entire leadership team are dynamic and best sourced from the company's official investor relations portal.
Top Products and Market Share
Key Offerings
- Fantasy Westward Journey: A long-standing and highly profitable MMORPG developed and published by NetEase. It has a massive and dedicated player base in China and has been a consistent revenue driver. Competitors include other MMORPG developers and publishers like Tencent Games, Perfect World, and Shanda Games.
- Identity V: A popular asymmetrical survival horror mobile game developed by NetEase. It has achieved significant international success. Competitors include Dead by Daylight Mobile (Behaviour Interactive), Mobile Legends: Bang Bang (Moonton), and other mobile competitive games.
- Naraka: Bladepoint: A successful PC and console battle royale game with a focus on melee combat and fantasy elements. It has gained considerable traction in the global market. Competitors include titles like Apex Legends (Respawn Entertainment/EA), PlayerUnknown's Battlegrounds (Krafton), and Fortnite (Epic Games).
- NetEase Cloud Music: A leading music streaming service in China, offering a vast library of music, original content, and artist interaction features. Competitors include Tencent Music Entertainment (QQ Music, Kugou Music, Kuwo Music) and other smaller platforms.
- Yanxuan: A lifestyle e-commerce platform that focuses on private label products, often inspired by high-quality overseas brands. Competitors include Alibaba's Tmall and Taobao, JD.com, and Pinduoduo.
Market Dynamics
Industry Overview
NetEase operates primarily in the rapidly growing online gaming and digital entertainment sectors, with significant presence in China's burgeoning tech and e-commerce markets. The online gaming industry is characterized by high competition, evolving player preferences, and stringent regulatory environments. The digital entertainment sector is also competitive, with a strong demand for music, video, and interactive content.
Positioning
NetEase is a dominant player in the Chinese online gaming market, known for its strong IP development capabilities and consistent delivery of high-quality games. Its diversification into music and e-commerce provides additional revenue streams and a broader user base, mitigating risks associated with reliance on a single segment. Its competitive advantages lie in its deep understanding of the Chinese market, robust R&D, and established user community.
Total Addressable Market (TAM)
The total addressable market for online gaming and digital entertainment in China is substantial and continues to grow. While specific TAM figures vary by research firm and segment, the Chinese gaming market alone is projected to reach hundreds of billions of USD. NetEase, as one of the top two players in this market, holds a significant share and is well-positioned to capture further growth through its established titles and new product pipelines.
Upturn SWOT Analysis
Strengths
- Strong brand recognition and player loyalty in China.
- Proven track record of developing and publishing successful, long-lasting game IPs.
- Diversified revenue streams beyond gaming (music, e-commerce).
- Significant R&D capabilities and investment in technology.
- Experienced leadership team with deep market knowledge.
Weaknesses
- Heavy reliance on the Chinese market, which faces regulatory uncertainties.
- Intense competition from domestic and international players.
- Potential challenges in replicating international success of certain game genres.
- Need to continuously innovate to keep pace with evolving player tastes.
Opportunities
- Continued expansion into international gaming markets.
- Growth of cloud gaming and emerging technologies.
- Leveraging its established user base for cross-promotion of new services.
- Potential for further diversification into new digital entertainment verticals.
- Opportunities presented by the metaverse and Web3 technologies.
Threats
- Increasingly stringent government regulations on gaming and internet companies in China.
- Potential for disruptive innovation from competitors.
- Macroeconomic headwinds impacting consumer spending.
- Rising user acquisition costs in a saturated market.
- Intellectual property infringement risks.
Competitors and Market Share
Key Competitors
- Tencent Holdings Ltd. (TCEHY)
- Perfect World Co., Ltd. (PAWS)
- Shanda Games Limited (SDSGY)
Competitive Landscape
NetEase's primary competitive advantage lies in its strong product pipeline and deep understanding of the Chinese gaming market. However, it faces immense competition from Tencent, which holds a dominant market share and possesses extensive resources. While NetEase has expanded internationally, replicating its domestic success globally remains a challenge. Diversification into music and e-commerce provides a buffer, but competition in those sectors is also fierce.
Growth Trajectory and Initiatives
Historical Growth: NetEase has demonstrated a consistent historical growth trajectory, largely fueled by the sustained success of its online game portfolio and the expansion of its innovative business segments. Its ability to adapt and launch new popular titles has been critical to this growth.
Future Projections: Future projections for NetEase are generally optimistic, driven by the continued strength of the Chinese gaming market, its expanding international presence, and the growth potential of its non-gaming ventures. Analyst estimates often point to continued revenue and profit growth, though the pace may vary depending on market conditions and regulatory factors.
Recent Initiatives: Recent initiatives include continued investment in AAA game development for global markets, expansion of NetEase Cloud Music's services and content offerings, and strategic partnerships to enhance its e-commerce and other innovative businesses. The company is also actively exploring opportunities in emerging areas like AI and the metaverse.
Summary
NetEase is a robust player in the online gaming and digital entertainment space, demonstrating strong historical growth and consistent profitability. Its diversified business model, particularly in music and e-commerce, provides resilience. However, it faces significant competition, especially from Tencent, and operates within a dynamic regulatory environment in China. Continued innovation, international expansion, and navigating regulatory challenges will be key to its future success.
Similar Stocks
Sources and Disclaimers
Data Sources:
- Company Investor Relations Filings (e.g., SEC filings)
- Financial News Outlets (e.g., Bloomberg, Reuters)
- Market Research Reports (e.g., Newzoo, Statista)
- Industry Analysis Publications
Disclaimers:
This analysis is based on publicly available information and is intended for informational purposes only. It does not constitute financial advice. Market share data and TAM figures are estimates and can vary significantly based on the source and methodology. Financial performance and future projections are subject to change and market volatility. Investors should conduct their own due diligence before making any investment decisions.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About NetEase Inc
Exchange NASDAQ | Headquaters - | ||
IPO Launch date 2000-06-30 | Founder, CEO & Director Mr. Lei Ding | ||
Sector Communication Services | Industry Electronic Gaming & Multimedia | Full time employees 26028 | Website https://ir.netease.com |
Full time employees 26028 | Website https://ir.netease.com | ||
NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally. The company operates through Games and Related Value-Added Services; Youdao; NetEase Cloud Music; and Innovative Businesses and Others segments. It develops and operates mobile and PC games; and offers games licensed from other developers. The company also provides live streaming service, and other related or ancillary value-added services related to games, such as the sale of game-themed merchandise. In addition, it offers digital content services with interactive learning features, including Youdao Lingshi and Youdao Literature; STEAM courses consisting computer coding courses and other STEAM courses; and adult courses, such as China University massive open online course. Further, the company provides Youdao Dictionary, an online language tool; Confucius, a large language model for the education sector; Hi Echo, an AI-driven virtual English-speaking tutor; Mr. P AI Tutor, a conversation-based tool; Youdao Desktop Translation, a desktop dictionary tool; U-Dictionary, an online dictionary and translation app; iRecord, an audio transcription tool; LectMate, an interpretation software for study-abroad lecture scenarios; iArch, an AI home design software; Baby Genius, an AI baby generator; and One Translate Translator, a translation tool for travelers. It also offers online marketing services consisting of performance-based advertising services, and global marketing and promotion services through banners, text links, videos, logos, buttons, and rich media. Additionally, the company develops and offers smart devices, including Youdao Dictionary Pen, Youdao Listening Pod, and Youdao Smart Learning Pad. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.
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