NetEase Set To Grow With China Online Game Market

2015-10-27 10:55 yangbingbing

NtEase (NASDAQ:NTES), a leader in online gaming in China, has posted accelerating sales and profit growth in recent quarters amid strong growth in its gaming, advertising and e-commerce divisions.

Profit for Q3 is seen rising 24% to $1.78 a share, matching the prior quarter's gain.

Revenue growth has picked up for five straight quarters, jumping 65% to $736.6 million in the latest period. Q3 results are due Nov. 11.


More than three quarters of NetEase's revenue still comes from multiplayer games such as its popular "Westward Journey Online" franchise. NetEase also offers the blockbuster game "World of Warcraft" under license from Activision Blizzard (NASDAQ:ATVI).

The company is expanding into mobile games. UBS said last month that it expects revenue from China's mobile games market to grow at a 27.7% compound annual growth rate in 2015-18.

Still, mobile games have lower margins. NetEase's annual pretax margin was 48.6% last year, the lowest in four years but still well above rivals in the highly ranked computer game software industry.

NetEase has entered the e-commerce market via its shopping site.


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