网易-S(09999) - 2022 - 中期财报

Financial Performance - NetEase's net revenue for Q2 2022 was RMB 23.2 billion (USD 3.5 billion), representing a year-over-year increase of 12.8%[4] - Revenue from games and related value-added services reached RMB 18.1 billion (USD 2.7 billion), up 15.0% year-over-year[4] - Youdao's net revenue was RMB 956.2 million (USD 142.8 million), a decrease of 26.1% year-over-year[4] - Cloud Music's net revenue increased to RMB 2.2 billion (USD 327.2 million), reflecting a year-over-year growth of 29.5%[4] - Gross profit for Q2 2022 was RMB 12.9 billion (USD 1.9 billion), a 15.7% increase compared to the previous year[4] - The company reported a net profit attributable to shareholders from continuing operations of RMB 4.7 billion (USD 696.7 million)[5] - Net revenue for the six months ended June 30, 2022, was RMB 46,714,920, representing an increase from RMB 41,041,712 for the same period in 2021, a growth of approximately 13.5%[32] - Gross profit for the six months ended June 30, 2022, was RMB 25,777,870, up from RMB 22,242,253 in the previous year, indicating a growth of about 15.4%[32] - Net profit attributable to shareholders for the six months ended June 30, 2022, was RMB 9,685,499, an increase from RMB 7,980,906 in the same period of 2021, representing a growth of around 21.3%[32] - Basic earnings per share for the six months ended June 30, 2022, was RMB 2.96, compared to RMB 2.38 for the same period in 2021, an increase of approximately 24.4%[32] Operating Expenses and Margins - Total operating expenses in Q2 2022 amounted to RMB 7,995.2 million (USD 1,193.6 million), an increase from RMB 7,329.3 million in the previous quarter and RMB 7,431.5 million year-over-year, mainly due to higher marketing expenses for games and increased personnel and R&D costs[12] - The gross margin for online education was 42.8%, down from 53.1% in the previous quarter and 52.3% year-over-year, primarily due to the cessation of subject-based extracurricular training services[11] - The gross margin for cloud music improved to 13.0% in Q2 2022, compared to 12.2% in the previous quarter and 4.1% year-over-year, driven by increased revenue from membership subscriptions and social entertainment services[11] - The total operating costs for the six months ended June 30, 2022, were RMB 20,937,050, an increase from RMB 18,799,459 in the same period of 2021, representing a rise of about 11.4%[34] - The gross profit margin for online games and related value-added services was 64.9% for the six months ended June 30, 2022, compared to 63.5% for the same period in 2021[34] Cash Flow and Investments - The net cash inflow from operating activities in Q2 2022 was RMB 6.6 billion (USD 990.0 million), compared to RMB 4.6 billion in the previous quarter and RMB 4.7 billion year-over-year[19] - The company reported a net cash outflow from investing activities of RMB 5,543,230 for the six months ended June 30, 2022, compared to RMB 11,037,737 in the same period of 2021, showing a significant reduction in cash outflow[33] - The net cash inflow from financing activities for the six months ended June 30, 2022, was RMB 1,977,256, an increase from RMB 2,288,974 in the previous year, reflecting a decrease of approximately 13.6%[33] - The company experienced a decrease in cash and cash equivalents at the end of the period, with a balance of RMB 17,376,115 compared to RMB 19,552,450 at the end of the previous year, representing a decline of about 11.1%[33] Shareholder Returns - The company approved a quarterly dividend of USD 0.0720 per share (USD 0.3600 per American Depositary Share) for Q2 2022, with payment expected on September 13, 2022[17] - The company repurchased approximately 23.6 million American Depositary Shares for a total of about USD 2.3 billion under its buyback plan as of June 30, 2022[22] Game Development and Updates - The popular game "Naraka: Bladepoint" received significant updates and launched its Xbox version in June 2022[5] - The game "Diablo® Immortal™," co-developed with Blizzard Entertainment, topped iOS download charts in multiple regions[5] - NetEase plans to expand its game development pipeline with upcoming titles including mobile versions of "Naraka: Bladepoint" and "Harry Potter: Magic Awakened" for overseas markets[5] Company Overview and Strategy - NetEase is a leading internet technology company in China, focusing on content innovation and a rich product matrix in the gaming ecosystem[24] - The company has developed and operated several popular mobile and PC games in China, leveraging its strong internal R&D capabilities[25] - NetEase's other businesses include Youdao, which provides intelligent learning services, and Cloud Music, a leading online music service in China[25] - The company has received an A rating from MSCI for its ESG performance, highlighting its commitment to environmental, social, and governance standards[25] Risks and Future Outlook - Forward-looking statements indicate potential risks, including market growth stagnation and regulatory changes affecting operations[26] - Non-GAAP financial metrics are used to assess operational performance, excluding stock-based compensation expenses[28] - NetEase defines non-GAAP net profit attributable to shareholders as net profit excluding stock-based compensation expenses[28] - The company emphasizes the importance of considering all financial indicators rather than relying solely on non-GAAP metrics[29] Conference Call Information - The earnings conference call is scheduled for August 18, 2022, to discuss quarterly performance and answer questions[23] - The conference call will be available for replay until August 31, 2022, providing further insights into the company's performance[23] Balance Sheet Highlights - Total assets increased from RMB 153.64 billion to RMB 168.18 billion, representing a growth of 9.99%[31] - Current assets rose from RMB 113.12 billion to RMB 128.01 billion, an increase of 13.12%[31] - Cash and cash equivalents increased from RMB 14.50 billion to RMB 16.46 billion, a growth of 13.54%[31] - Total liabilities increased from RMB 54.22 billion to RMB 63.27 billion, reflecting a rise of 16.93%[31] - Short-term borrowings increased significantly from RMB 19.35 billion to RMB 28.03 billion, a jump of 44.73%[31] - Shareholders' equity rose from RMB 99.28 billion to RMB 104.76 billion, an increase of 5.00%[31] - Inventory decreased from RMB 964.73 million to RMB 843.77 million, a decline of 12.52%[31] - Non-current assets totaled RMB 40.52 billion, slightly down from RMB 40.17 billion, a decrease of 0.86%[31] - Accounts receivable net value decreased from RMB 5.51 billion to RMB 5.21 billion, a decline of 5.45%[31] - The company reported a total of RMB 12.13 billion in contract liabilities, a slight increase from RMB 12.32 billion, reflecting a growth of 1.64%[31]