NetEase, 46% increase in profits

09/08/2019

 

The company has resisted a constantly evolving macroeconomic environment for 22 years

 

NetEase, one of the first Chinese Internet companies, posted net revenues of RMB 18.8 billion ($ 2.7 billion) in the second quarter of this year, up 15% from the previous year. With this new success, its net income reached RMB 3.07 billion ($ 447.4 million), an increase of 46% over the previous year.

NetEase’s continued growth has been present since 1997, when the brand was known as a free email service provider. Today his net income is almost equal to all the turnover of another important protagonist of the first Internet era in China, Sohu, which in the past was one of the largest online information portals along with NetEase and Sina.

 

NetEase has maintained its growth by exploring various sectors including games

 

NetEase, although lagging behind revenue compared to the younger giants Alibaba, Tencent and Baidu, has maintained its growth by exploring various sectors including games, e-commerce, education and online music.

NetEase’s market diversification is working. In the second quarter, in fact, NetEase earned RMB 11.4 billion ($ 1.67 billion) from online gaming services, up 13.6% year-on-year and raised RMB 5.2 billion ($ 764 million) from e-commerce that started as part of its e-mail services in 2012, up 20.2% on an annual basis.

 

NetEase has raised RMB 1.5 billion ($ 219.5 million) from its innovative business

 

NetEase has raised RMB 1.5 billion ($ 219.5 million) from its innovative business, including cloud music, live broadcast CC and Youdao Online Education. The profit margin for this segment reached 1.4%, compared to the gross loss margin of 13.1% in the previous quarter.

Management has revealed to analysts that the number for its cloud music users has reached 800 million. This is a big leap compared to the 600 million NetEase released in November last year.

 

 

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