Tech stock under pressure: NetEase Inc (NASDAQ: NTES)

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NetEase Inc (NASDAQ: NTES) stock fell over 0.3% in the pre-market session on November 21st, 2019 (Source: Google finance) after the company posted mixed results for the third quarter of FY 19. The company’s net income from continuing operations attributable to the company’s shareholders for the third quarter of 2019 grew to RMB 12.89 billion or US$1.80 billion from RMB 2.06 billion in the third quarter of 2018. At the end of September, the company has generated total cash and cash equivalents, current and non-current time deposits and short-term investments balance of RMB61,431.7 million (US$8,594.6 million), compared to RMB49,663.5 million as of December 31, 2018. The company has generated the cash flow from continuing operating activities of RMB3,846.3 million (US$538.1 million) for the third quarter of 2019.

NTES in the third quarter of FY 19 has reported the adjusted earnings per ADS of $5.08, beating the analysts’ estimates for the adjusted earnings per share of $3.12, according to analysts polled by Thomson Reuters. The company had reported the adjusted revenue growth of 11.2 percent to $2.05 billion (RMB 14.64 billion) in the third quarter of FY 19, missing the analysts’ estimates for revenue of $2.45 billion.

Moreover, the company posted the net revenues from online game services of RMB11,534.8 million (US$1,613.8 million) for the third quarter of 2019, compared to RMB11,433.4 million and RMB10,348.4 million for the preceding quarter and the third quarter of 2018, respectively. The company’s net revenues from mobile games formed approximately 71% of net revenues from online game services for the third quarter of 2019, compared to 72.2% and 68.0% for the preceding quarter and the third quarter of 2018, respectively. The net revenues from Youdao of RMB345.9 million (US$48.4 million) for the third quarter of 2019, compared to RMB322.8 million and RMB174.4 million for the preceding quarter and the third quarter of 2018, respectively. The net revenues from innovative businesses and others of RMB2,755.0 million (US$385.4 million) for the third quarter of 2019, compared to RMB2,692.3 million and RMB2,637.4 million for the preceding quarter and the third quarter of 2018, respectively.

Additionally, the company has declared a dividend of US$7.59 per ADS for the third quarter of 2019, including the special dividend of US$3.45 per ADS. The company will pay the total dividend of approximately US$1 billion on December 13, 2019 to shareholders of record as of the close of business on December 6, 2019. The company has recently announced the share repurchase program of up to US$1 billion of the Company’s outstanding ADSs beginning on November 16, 2018.

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