网易-S(09999) - 2023 - 中期业绩

Financial Performance - NetEase reported Q2 2023 net revenue of RMB 24.01 billion (USD 3.31 billion), a year-over-year increase of 3.7%[4] - Revenue from games and related value-added services reached RMB 18.80 billion (USD 2.59 billion), up 3.6% year-over-year[4] - Youdao's net revenue was RMB 1.21 billion (USD 166.4 million), reflecting a strong year-over-year growth of 26.2%[4] - Cloud Music's net revenue decreased to RMB 1.95 billion (USD 268.7 million), down 11.1% year-over-year[4] - Gross profit for Q2 2023 was RMB 14.40 billion (USD 2.00 billion), representing an 11.1% increase year-over-year[4] - Operating expenses totaled RMB 8.30 billion (USD 1.10 billion), an increase of 4.0% compared to the previous year[4] - Net profit attributable to shareholders was RMB 8.20 billion (USD 1.10 billion), with non-GAAP net profit from continuing operations at RMB 9.00 billion (USD 1.20 billion)[5] - Basic earnings per share were USD 0.35, with non-GAAP basic earnings per share from continuing operations at USD 0.39[5] Game Development and Strategy - The company launched several popular new games in June, enhancing its international presence and expanding its game portfolio[6] - NetEase is a leading internet and gaming service provider, continuously expanding its gaming ecosystem with a rich product matrix[19] - The company has a strong in-house R&D team focused on mobile, PC, and console games, contributing to an exceptional gaming experience[19] - The company aims to integrate cultural and educational elements into its games, enhancing their value and engagement[19] Profitability and Margins - The gross margin for online games and related value-added services in Q2 2023 was 67.4%, up from 66.7% in the previous quarter and 64.9% year-over-year[9] - The gross margin for Youdao in Q2 2023 was 47.0%, down from 51.7% in the previous quarter but up from 42.8% year-over-year[9] - The gross margin for Cloud Music in Q2 2023 was 27.0%, an increase from 22.4% in the previous quarter and 13.0% year-over-year, driven by increased subscription revenue and cost control improvements[9] Cash Flow and Financial Position - As of June 30, 2023, the net cash and cash equivalents, after deducting short-term and long-term borrowings, amounted to RMB 99.6 billion (USD 13.7 billion), an increase from RMB 95.6 billion at the end of 2022[15] - The company declared a quarterly dividend of USD 0.1050 per share (USD 0.5250 per American Depositary Share) for Q2 2023, compared to USD 0.0930 per share in Q1 2023[16] - The company has a share repurchase plan approved for up to USD 5 billion, with approximately 6.1 million American Depositary Shares repurchased for about USD 536.4 million as of June 30, 2023[17] Tax and Regulatory Environment - The effective tax rate for Q2 2023 was 8.0%, significantly lower than 19.5% in the previous quarter and 22.0% year-over-year, primarily due to the recognition of tax incentives[12] Assets and Liabilities - As of June 30, 2023, the total assets of NetEase amounted to RMB 172.76 billion, a decrease from RMB 167.91 billion as of December 31, 2022, representing a decline of approximately 5.1%[23] - The total liabilities increased significantly to RMB 63.89 billion as of June 30, 2023, compared to RMB 49.64 billion at the end of 2022, marking an increase of about 28.7%[23] - Cash and cash equivalents decreased to RMB 12.77 billion from RMB 24.89 billion, reflecting a decline of approximately 48.7%[23] - The total current liabilities rose to RMB 56.83 billion, up from RMB 42.34 billion, indicating an increase of approximately 34.3%[23] - The company's equity attributable to shareholders decreased to RMB 104.73 billion from RMB 114.26 billion, a decline of about 8.3%[23] Future Outlook and Risks - Forward-looking statements indicate potential risks, including market growth stagnation and challenges in maintaining market position[21] - NetEase's global expansion efforts may face risks related to economic uncertainty and currency fluctuations[21] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[24] Research and Development - Research and development expenses for the six months ended June 30, 2023, totaled RMB 2,153,825 thousand, slightly up from RMB 2,128,524 thousand in the same period last year[24] - Research and development expenses for the company were RMB 282,466 for the three months ended June 30, 2023, compared to RMB 260,899 for the same period in 2022, reflecting an increase of 8.5%[28] Non-GAAP Financial Metrics - Non-GAAP financial metrics are used to assess operational performance, excluding stock-based compensation expenses[22] - The non-GAAP net profit attributable to shareholders is defined as net profit excluding stock-based compensation expenses[22] - The company emphasizes the importance of considering all financial indicators rather than relying on a single metric[22]