NetEase.com (NTES)

[johnsyn]

MORE on it: 2:22 PM Chinese online game developer/portal NetEase (NTES +5.2%) makes new highs after reporting Q1 revenue of $318.2M (+39% Y/Y) and EPS of $1.14, beating Street estimates by $8.5M and $0.13. Growth was fueled by strong uptake for the company's Ghost and Tianxia III games. In addition, NetEase reported a 24% Q/Q increase for users of its microblogging service to 121M (Sina's Weibo has 300M+), and a 6.7% Q/Q increase in registered e-mail accounts to 480M. SEEKING ALPHA

[johnsyn]

Perhaps. I bought under $40, last year some time. Me happy.

[eastunder]

A view Since OCT.



I'm gonna have to search back on the board but I feel like it's not uncommon to rise on earnings and then drop back just a wee bit.

Intrady does show a gap at 58.46 - so that's a given. Perhaps tomorrow?

[johnsyn]

fantastic to beat analysts. We got beaten down when China economy slowing fears were shoved in our faces, but we'll prevail, nice to climb back.

[eastunder]

NetEase shares rise on strong results

http://finance.yahoo.com/news/netease-shares-rise-strong-results-155046961.html

(Reuters) - Shares of China-based internet company NetEase Inc (NSQ:NTES - News) rose as much as 8 percent after it posted quarterly results above analysts' estimates, helped by strong demand for its online games.

Online gaming revenue rose 31 percent in the first quarter to $289.2 million, the company said on Wednesday.

NetEase, which develops and licenses online games, also said it would start beta testing four new games in the second quarter.

Analysts at Macquarie Equities Research believe the new games would compete with Chinese rival Tencent Holdings Ltd's <0700.HK> most popular games like "DNF", "League of Legends", and "Blade and Soul".

The brokerage, which raised its price target on NetEase stock to $65 from $55, expects strong momentum in gaming to continue for the rest of the year. Lazard too raised its price target on the stock to $70 from $58, and maintained its "buy" rating.

Earnings for the first quarter were $149.5 million, or $1.14 per American Depository Share, on revenue of $318.2 million.

Analysts were expecting earnings of $1.05 per share on revenue of $310.4 million, according to Thomson Reuters I/B/E/S.

Shares of NetEase were up 3 percent at $60.55 on Thursday on the Nasdaq.

[johnsyn]

NetEase Reports First Quarter 2012 Unaudited Financial Results
Wed May 16, 2012 7:00 PM |BEIJING, /PRNewswire-Asia-FirstCall/ -- NetEase, Inc. (NASDAQ: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the first quarter ended March 31, 2012.

William Ding, Chief Executive Officer and Director of NetEase (NTES), stated, "The growing popularity of our self-developed games continues to drive our revenues. For the first quarter, our total online games revenue increased 31.4% year-over-year, with dynamic growth from our newer games Ghost and Tianxia III and increasing contribution from several of our flagship games, Fantasy Westward Journey, Westward Journey Online II and Heroes of Tang Dynasty."

"Our online games revenue has been driven by the successful execution of our strategy to continuously improve user experience and has been further demonstrated by Ghost's rapid growth since the launch of its full scale closed beta testing in September 2011. In the second quarter, we introduced a series of new features for Ghost in its open beta testing, which has been well received by users. Benefiting from the innovative game play mode, our newest game, Tianxia III, achieved record high revenue in the first quarter. We plan to continue developing new exciting content and launch open beta testing for Tianxia III in the second quarter."

"Moreover, players continue to respond enthusiastically to expansion packs for our long running self-developed games, Fantasy Westward Journey and Westward Journey Online II. We plan to launch new expansion packs combined with large-scale promotional activities for these games in the second and third quarters. Other expansion packs or new versions planned for the second quarter include Heroes of Tang Dynasty, Westward Journey Online III and Warsong of Westward Journey."

"Diversification through the introduction of self-developed games is a key theme in 2012. We are on track to commercialize a number of new titles this year that showcase innovative content and leading technology. In the second and third quarters of 2012, we plan to initiate beta testing of several highly anticipated games in our pipeline, including 3D ARPG, Soul of Warrior, 2.5D MMORPG, Wu Hun, 3D action real-time strategy (or DotA) game, Heroes of Three Kingdoms, and a next generation 3D action MMORPG, Dragon Sword. With respect to our licensed games, we are pleased to have renewed our contract with Blizzard Entertainment to continue our existing cooperation on Blizzard Entertainment's World of Warcraft®in mainland China. We look forward to releasing Mists of Pandaria", the fourth expansion to World of Warcraft, in mainland China as soon as possible."

"Our advertising revenue grew 13.1% year-over-year, with automobile, Internet services and food and beverage services as the top performing sectors. Advertising revenues declined 48.5% quarter-over-quarter, which reflects the typical industry seasonality. We expect the usual uptick in advertising revenues in the second quarter and through the second half of 2012. We remain committed to increasing our appeal to users by offering content innovation, synthesizing user feedback and providing service integration between different mobile device platforms. To leverage the opportunities offered by the upcoming 2012 London Olympics, we have secured a number of partnerships with content providers to offer comprehensive, accurate and in-depth reporting to our portal and mobile Internet users."

Mr. Ding concluded, "Portal traffic grew steadily in the first quarter as we continued to optimize our user experience and mobile access by introducing leading applications and cutting edge technology. Usage of our micro-blogging services is also expanding. In the first quarter, the number of micro-blogging users reached 121.0 million, up 24.0% from December 31, 2011. As the leading free email provider in China, our mailbox services also performed well as we continued to optimize services through mobile access and upgrades to enhance users' experience. As of March 31, 2012, we had approximately 480 million registered email users, up 6.7% quarter-over-quarter. In addition, the number of users and paying subscribers for our corporate mailbox services have grown in their third year of operation. During the first quarter, we were named one of the top corporate mailbox service providers in China.

"With continued execution on expanding and diversifying our game portfolio and user base, as well as driving innovation in content, technology and entertainment across all demographics in China, we look forward to another great year for NetEase in 2012," Mr. Ding concluded.

First Quarter 2012 Financial Results

Revenues

Total revenues for the first quarter of 2012 were RMB2.0 billion (US$318.2 million), compared to RMB2.1 billion and RMB1.5 billion for the preceding quarter and the first quarter of 2011, respectively.

Revenues from online games were RMB1.8 billion (US$289.2 million) for the first quarter of 2012, compared to RMB1.8 billion and RMB1.4 billion for the preceding quarter and the first quarter of 2011, respectively.

Revenues from advertising services were RMB143.5 million (US$22.8 million) for the first quarter of 2012, compared to RMB278.5 million and RMB126.8 million for the preceding quarter and the first quarter of 2011, respectively.

Revenues from e-mail, wireless value-added services and others ("E-mail, WVAS and others") were RMB39.6 million (US$6.3 million) for the first quarter of 2012, compared to RMB37.2 million and RMB25.7 million for the preceding quarter and the first quarter of 2011, respectively.


Gross Profit

Gross profit for the first quarter of 2012 was RMB1.3 billion (US$211.4 million), compared to RMB1.5 billion and RMB985.0 million for the preceding quarter and the first quarter of 2011, respectively. The quarter-over-quarter decrease in gross profit was primarily attributable to a seasonal decline in advertising revenue.

The year-over-year increase in gross profit was primarily attributable to increased revenues from the Company's self-developed games, Ghost, Tianxia III and Fantasy Westward Journey, which were partially offset by a decline in revenue from Blizzard Entertainment's World of Warcraft. Revenue from Ghost has grown rapidly since the launch of its full scale closed beta testing in September 2011, coupled with successful promotional activities. Tianxia III was released in late October of 2011, and its significant growth was leveraged from the strong Tianxia II user base as well as its attractive and innovative game play mode. The year-over-year increase in cost of revenues was primarily due to increased headcount-related costs and server custody costs.


Gross Profit (Loss) Margin

Gross profit margin for the online game business for the first quarter of 2012 was 73.0%, compared to 72.6% and 70.0% for the preceding quarter and the first quarter of 2011, respectively.

Gross profit margin for the advertising business for the first quarter of 2012 was 19.8%, compared to 54.5% and 33.4% for the preceding quarter and the first quarter of 2011, respectively. The quarter-over-quarter decrease in gross profit margin was primarily due to a decrease in advertising revenues as explained above. The year-over-year decrease in gross profit margin was primarily due to increased headcount-related costs and content purchase costs in the first quarter of 2012.

Gross loss margin for the E-mail, WVAS and others business for the first quarter of 2012 was 18.0%, compared to gross profit margin of 2.2% and gross loss margin of 21.6% for the preceding quarter and the first quarter of 2011, respectively. The quarter-over-quarter change was mainly due to increased customer services costs and technology support costs in the first quarter of 2012.

Operating Expenses

Total operating expenses for the first quarter of 2012 were RMB355.7 million (US$56.5 million), compared to RMB529.0 million and RMB292.0 million for the preceding quarter and the first quarter of 2011, respectively. The quarter-over-quarter decrease in operating expenses was mainly due to the fact that there were less selling and marketing promotional activities in the first quarter of 2012. In addition, an impairment provision of RMB50.3 million on the initial online game license fee for Blizzard Entertainment's StarCraft® II was recorded in the fourth quarter of 2011. The year-over-year increase in operating expenses was primarily due to increased headcount-related costs and increased research and development costs related to product development.


Net Profit

Net profit for the first quarter of 2012 totaled RMB941.7 million (US$149.5 million), compared to RMB898.6 million and RMB737.4 million for the preceding quarter and the first quarter of 2011, respectively.

During the first quarter of 2012, the Company reported a net foreign exchange gain of RMB17.6 million (US$2.8 million), compared to a net foreign exchange loss of RMB36.4 million and a net foreign exchange gain of RMB25.3 million for the preceding quarter and the first quarter of 2011, respectively. The quarter-over-quarter and year-over-year changes in foreign exchange gains and losses were mainly due to the unrealized exchange gains and losses arising from the Company's Euro-denominated bank deposit balances as of March 31, 2012 as the exchange rate of the Euro against the RMB fluctuated over the periods.

NetEase reported basic and diluted earnings per ADS of US$1.14 each for the first quarter of 2012. The Company reported basic and diluted earnings per ADS of US$1.09 for the preceding quarter, and reported basic and diluted earnings per ADS of US$0.90 and US$0.89, respectively, for the first quarter of 2011.

Income Taxes

The Company recorded a net income tax charge of RMB163.1 million (US$25.9 million) for the first quarter of 2012, compared with RMB122.6 million and RMB37.2 million for the preceding quarter and the first quarter of 2011, respectively. The effective tax rate for the first quarter of 2012 was 14.9%, compared to 11.8% and 4.8% for the preceding quarter and the first quarter of 2011, respectively.

The Company's various principal subsidiaries have renewed their qualifications as High and New Technology Enterprises in 2011, and enjoy the preferential enterprise income tax rate of 15% from 2011 to 2013, subject to annual review by the relevant tax authorities in China.

The quarter-over-quarter increase in effective tax rate was mainly due to the expiration of the enterprise income tax exemption period for certain subsidiaries that were qualified as Software Enterprises, which resulted in an increase in their applicable tax rate from 0% to 12.5%. The year-over-year increase in effective tax rate was primarily due to the recognition of a tax benefit of RMB47.1 million upon receipt of the Key Software Enterprise status by certain subsidiaries during the first quarter of 2011.

Other Information

As of March 31, 2012, the Company's total cash and time deposits balance was RMB13.1billion (US$2.1 billion), compared to RMB11.9 billion as of December 31, 2011. Cash flow generated from operating activities was RMB1.3 billion (US$212.3 million) for the first quarter of 2012, compared to RMB1.2 billion and RMB969.3 million for the preceding quarter and the first quarter of 2011, respectively.


** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.2975 on the last trading day of March 2012 (March 30, 2012) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on March 30, 2012, or at any other certain date. The percentages stated are calculated based on RMB.

Conference Call


NetEase's management team will host a conference call at 9:00 p.m. Eastern Time on Wednesday, May 16, 2012 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, May 17, 2012). NetEase's management will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 1-877-941-2068 (international: 1-480-629-9712), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-800-406-7325 (international: 1-303-590-3030), and entering passcode 4533318#. The replay will be available through June 7, 2012.

This call is being webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com.

About NetEase, Inc.

NetEase, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites, which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia III, Heroes of Tang Dynasty, Datang and Ghost, as well as the licensed games, Blizzard Entertainment's World of Warcraft® and StarCraft® II.

NetEase also offers online advertising on its websites, which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the web that are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.

Other community services that the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. The Company believes that it is also the largest provider of free e-mail services in China. Furthermore, the NetEase websites as well as its micro-blogging services provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

[eastunder]

NTES 1Q earnings 5-16-12 AMC

NetEase to Report First Quarter 2012 Financial Results on May 16, 2012

Wednesday, May 02, 2012 07:00ET



BEIJING, May 2, 2012 /PRNewswire-Asia/ -- NetEase, Inc. (Nasdaq: NTES) today announced that it will report its financial results for the first quarter 2012 on Wednesday, May 16, 2012, after the close of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 9:00 p.m. Eastern Time on Wednesday, May 16, 2012 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, May 17, 2012). NetEase's management will be on the call to discuss the quarterly results and answer questions.

Interested parties may participate in the conference call by dialing 1-877-941-2068 (international: 1-480-629-9712), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-800-406-7325 (international: 1-303-590-3030), and entering passcode 4533318#. The replay will be available through June 7, 2012.

This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://corp.netease.com.

About NetEase, Inc.

NetEase, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites, which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia III, Heroes of Tang Dynasty, Datang and Ghost, as well as the licensed games, Blizzard Entertainment's World of Warcraft® and StarCraft II®.

NetEase also offers online advertising on its websites, which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the web that are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.

Other community services that the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. The Company believes that it is also the largest provider of free e-mail services in China. Furthermore, the NetEase websites as well as its micro-blogging services provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

[eastunder]

Excellent. I still hope they close that gap sooner rather than later.

[johnsyn]

NTES looking good again, LAZARD raised their P/T estimate from $58 to $65

[eastunder]

Well done!

[eastunder]

NTES : Gap 56.52

Open Gaps

Direction Date range  
 up Mar-21-2012 56.52 to 57.21 

[johnsyn]

Our long patience is now being rewarded, I'm almost 100% up, and they haven't even started letting customers play yet.

[johnsyn]

This was very huge. Our sleeper is now awake.

[eastunder]

Blizzard Entertainment® and NetEase Renew License for World of Warcraft® in Mainland China

http://finance.yahoo.com/news/blizzard-entertainment-netease-renew-license-000000523.html

New agreement sets the stage for collaboration between the companies on the game’s upcoming fourth expansion set, Mists of Pandaria™


SHANGHAI--(BUSINESS WIRE)--

Blizzard Entertainment (NASDAQ: ATVI - News) and NetEase.com (NASDAQ: NTES - News) today announced that they will continue their existing cooperation on Blizzard Entertainment’s World of Warcraft® in mainland China. The new license will continue for an additional three years following the expiration of the current license agreement.

The companies have been working together to bring World of Warcraft to Chinese gamers since 2009. In that time, they have successfully launched Wrath of the Lich King® and Cataclysm®, the game’s second and third expansion sets, in mainland China, and earned the enthusiastic support of gamers across the country. In addition to World of Warcraft, Blizzard Entertainment and NetEase’s existing partnership covers Blizzard Entertainment’s Warcraft® III and StarCraft® II, as well as the Battle.net® gaming platform.

The extended license agreement further reinforces the existing partnership between Blizzard Entertainment and NetEase and lays the groundwork to bring Mists of Pandaria™, the upcoming fourth expansion to World of Warcraft, to mainland China. First unveiled at BlizzCon® 2011, Mists of Pandaria features a variety of elements influenced by Eastern culture and introduces a new playable race (the pandaren), a new class (the monk), an expansive new continent to explore, an all-new pet battle system, scenarios, challenge modes, and more.

“We’re grateful for the tremendous enthusiasm Chinese gamers have shown for World of Warcraft over the years, and we’re pleased to be renewing our agreement for the game in China,” said Mike Morhaime, CEO and cofounder of Blizzard Entertainment. “We look forward to working with NetEase to deliver all of the new features and content of Mists of Pandaria to Chinese players as soon as possible.”

“We are excited to continue our partnership with Blizzard Entertainment after three years of highly effective cooperation on World of Warcraft,” stated William Ding, CEO of NetEase. “Both companies have complementary business strategies and share a similar corporate culture. I am confident that with Blizzard Entertainment’s expertise in developing world-class games and NetEase’s experience in local game operation, we will be able to provide the best gaming experiences for players in China.”

About Blizzard Entertainment, Inc.

Best known for blockbuster hits including World of Warcraft® and the Warcraft®, StarCraft®, and Diablo® franchises, Blizzard Entertainment, Inc. (www.blizzard.com), a division of Activision Blizzard (NASDAQ: ATVI - News), is a premier developer and publisher of entertainment software renowned for creating some of the industry’s most critically acclaimed games. Blizzard Entertainment’s track record includes thirteen #1-selling games and multiple Game of the Year awards. The company’s online-gaming service, Battle.net®, is one of the largest in the world, with millions of active players.

About NetEase.com Inc.

NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase’s online communities and personalized premium services have established a large and stable user base for the NetEase websites, which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through its in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II and III, Tianxia III, Heroes of Tang Dynasty, Datang and Ghost, as well as the licensed Blizzard Entertainment games World of Warcraft and StarCraft II.

[johnsyn]

GOOD NTES news today, EAST. What we've been waiting for.....

[johnsyn]

9:14 AM Activision's (ATVI) Blizzard division and NetEase.com (NTES) have agreed to a 3-year renewal of their deal to offer World of Warcraft in China - news that should please Chinese users who were denied access to the game for months in 2009 after Activision switched partners. The renewal comes as Activision witnesses a major decline in its Western World of Warcraft base.

[eastunder]

NTES Finviz chart:

Tracking: Blue line

[eastunder]

NetEase Q4 Beats; Investors Worry About New Games

By KEVIN SHALVEY, INVESTOR'S BUSINESS DAILY Posted 02/16/2012 04:10 PM ET

http://news.investors.com/Article.aspx?id=601408&p=1&ibdbot=1

NetEase executives late Wednesday disappointed investors by giving no word about any deals with game-maker Activision, and U.S. shares of the Chinese firm closed down 4% to 48.68 on Thursday.

Besides producing its own games such as "Ghost" and "Fantasy Westward Journey," Chinese game website NetEase (NTES) licenses the popular "World of Warcraft" franchise from U.S.-based Activision Blizzard (ATVI).

WoW has powered growth at NetEase, but its Q4 WoW revenue fell 10% from Q3, Roth Capital analyst Adam Krejcik wrote in a research note Thursday.


Workers test games at a NetEase R&D center in Hangzhou, China. View Enlarged Image

NetEase's overall game revenue rose 4.7% compared with Q3 and rose 29% from the year-earlier quarter. The rise was "primarily attributable" to an increase in revenue from in-house games, the company says.

"The company's internally produced games are doing well," Doug Creutz, a Cowen & Co. analyst, told IBD. "But the games they license from Activision aren't doing well. That was a little concerning."

Investors agreed Thursday, though the stock is still up more than 35% since early October.

"Given the recent strength in shares of NTES, we would not be surprised to see a shallow pullback," Krejcik wrote in his Thursday note.

NetEase said total revenue rose 35% to $333.5 million. Wall Street had estimated sales at $317.3 million, according to analysts polled by Thomson Reuters.

Per-share profit minus items rose 31% to $1.09 from 83 cents, the company says. Analysts had expected $1.02. The company didn't provide an outlook.

"I think there are always questions about what comes next," Creutz said.

Most observers have been assuming that NetEase also will get exclusive Chinese licensing for popular Activision franchises "Call of Duty" and "Diablo III," says Andy Yeung, an analyst with Oppenheimer & Co.

NetEase already has proven itself able to handle Activision Blizzard games, so it would be the logical choice for such a license in China, analysts say.

But in a conference call with analysts late Wednesday, company executives offered no details.

"We do maintain a good and smooth cooperation with Blizzard," acting Chief Financial Officer Onward Choi said, in answer to a question. That was about it.

Analysts are keeping alert.

Deal Is Up For Renewal

"The Activision partnership is going to come up for renewal in the summer," analyst Yeung said. He says it's likely the two companies will renew the deal.

Because WoW has driven revenue growth at NetEase, it's unlikely the company will want to sever ties with Activision Blizzard, says Creutz.

Richard Ji, an analyst with Morgan Stanley Research, writes in a note that NetEase's "Ghost" game seems to be growing in popularity.

"According to Baidu's (BIDU) search queries, which are typically the leading indicators for gamers' interest and hence game sales, "Ghost" rapidly rose to No. 11 in Q4, which it was not in the top 50 in Q3," wrote Ji, who rates NetEase as overweight, or buy.

NetEase's non-gaming products provide about 10% of revenue, mostly advertising. But the Internet portal is getting a lot of eyeballs.

In Q4, NetEase says its number of email users rose 5% from Q3 to 450 million.

And its microblog users now number 98 million, up 10% from Q3, NetEase says. But that lags the 250 million users for rival Sina's (SINA) Weibo microblog.

There's another possible hurdle for NetEase and other Chinese Internet companies in Q1. The Chinese economy's growth could slow, and the just-ended, multiweek Chinese New Year typically reduces Internet usage.

"What investors and analysts are concerned about is that there might be a drop in advertising spending online in China during the first quarter of this year," Yeung said.

That fear rose on Monday, when NetEase rival Sohu.com (SOHU) gave tepid guidance for the current quarter. It said it expects profit minus items of 50 cents to 55 cents a share, less than half the $1.20 Wall Street had expected.

Analysts have since dropped Sohu Q1 earnings-per-share forecasts to 48 cents, according to analysts polled by Thomson Reuters. The outlook for NetEase dropped just a penny on Thursday, down to 97 cents EPS minus items.

That 97 cents would mark its first sequential EPS decline since Q1 2009.

"Obviously the economic situation, overseas and locally, was moderating toward the end of last year, so people coming into the new year have been a little cautious about committing to an advertising contract," Yeung said.

[eastunder]

NTES

[eastunder]

Netease.com (NTES) Tops Q4 EPS by 7c, Sales Top Expectations

February 15, 2012 6:01 PM EST

Netease.com (NASDAQ: NTES) reported Q4 EPS of $1.09, $0.07 better than the analyst estimate of $1.02. Revenue for the quarter came in at $341.4 million versus the consensus estimate of $314.08 million.

[eastunder]

NetEase Earnings Grow 31%, Beating Street Forecasts

By KEVIN SHALVEY, INVESTOR'S BUSINESS DAILY Posted 06:52 PM ET

http://news.investors.com/Article/601338/201202151852/netease-q4-profit-beats-analyst-expectations.htm?ven=yahoocp,yahoo


NetEase (NTES) is still in the game.

The Chinese Internet portal and gaming site late Wednesday reported sales of $333.5 million, up 35% from $247.5 million in its fourth-quarter 2010.

Wall Street had estimated sales would be $317.3 million, according to analysts polled by Thomson Reuters.

Per-share profit minus items rose 31% to $1.09 from 83 cents. Analyst consensus was $1.02.

NetEase has grown fast, buoyed by its gaming division, which accounted for 86% of sales in the quarter.

Along with its own "Fantasy Westward Journey," NetEase has exclusive Chinese licensing of Activision Blizzard's (ATVI) "World of Warcraft" first-person shooter franchise.

WoW is showing signs of age, and the company is hoping other games, mostly developed in-house, will pick up the slack. It's long been rumored, too, that NetEase eventually will pick up licensing for "Call of Duty," "Diablo III" and other popular Activision Blizzard franchises.

For the current quarter, analysts are expecting EPS minus items of 98 cents, up 14% from the year-earlier quarter. But that would mark the first decline in sequential quarters since Q1 2009.

Analysts expect Q1 revenue of $300.2 million, up 31%.

Company executives were slated to hold a conference call with analysts at 8 p.m. EST.

NetEase shares were up 2.5% after hours, after it released its results.

[eastunder]

NetEase.com Reports Fourth Quarter and Fiscal Year 2011 Unaudited Financial Results

Wednesday, February 15, 2012 18:00ET

http://www.knobias.com/story.htm?eid=3.1.ee26a2ac86c13d5ff8a09c1615268a34b736f14e7ee67112443916f11a7a33e5

BEIJING, Feb. 15, 2012 /PRNewswire-Asia-FirstCall/ -- NetEase.com, Inc. (NASDAQ: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2011.


William Ding, Chief Executive Officer and Director of NetEase, stated, "2011 was a year of strong growth for our company. Providing our loyal and growing community of users with the highest quality content continues to fortify NetEase's industry leadership. Our success was highlighted by a 32.0% increase in total revenues for 2011, driven by an increase in online game services revenue of 32.5%, followed by strong growth in our advertising services revenue of 25.6% for the year."


"Our fast growing self-developed games Tianxia III and Ghost led our fourth quarter increase in online game services revenue of 4.4% quarter-over-quarter and 28.9% year-over-year. In October 2011, we launched our 3D MMORPG Tianxia III, a comprehensive upgrade that builds on the strong user base of its predecessor, Tianxia II. Tianxia III demonstrated dramatic growth in the fourth quarter, generating record revenue and user statistics. In addition, following the launch of Ghost's unlimited closed beta testing in April and full scale closed beta testing in September, it became one of the most popular 2.5D MMORPGs of 2011 in China, reaching record user statistics in the fourth quarter. Fantasy Westward Journey, Westward Journey Online II and Heroes of Tang Dynasty also delivered solid performances during the 2011 fourth quarter and full year. Both Fantasy Westward Journey and Westward Journey Online II reached their record high revenue in 2011, and these games, along with World of Warcraft(®), a game licensed from Blizzard Entertainment, were the primary drivers of our growth in online game services revenue for 2011."


"Our approach to technology innovation and product diversification to satisfy user demand is the core of our 2012 growth strategy. In the first half of 2012, we plan to enhance our portfolio of popular games with numerous expansion packs, including updates for Heroes of Tang Dynasty, Westward Journey Online II, Warsong of Westward Journey, New Fly For Fun and Legend of Fairy, as well as commence open beta testing for Ghost and Tianxia III. We also have two new self-developed games in process that are scheduled for beta testing in mid-2012."


Mr. Ding continued, "Internet advertising is rapidly increasing as a dominant media platform for advertisers in China. In 2011, revenue growth from our advertising services segment was consistently strong, led by the financial services, food and beverage products, and Internet services sectors. Seasonality and increased recognition by advertisers of our innovative content, service integration, and NetEase's user appeal drove a 26.3% sequential increase and a 19.2% year-over-year increase in advertising services revenue for the fourth quarter of 2011."


"We continue to evaluate the market and enhance our products and service offerings to meet the demands of a dynamic and competitive market. As the No. 1 free email provider in China, registered email users grew to 450 million as of December 31, 2011, an increase of 4.7% over the third quarter. The number of micro-blogging users grew to 97.6 million users, an increase of 10.3% over the third quarter."


Mr. Ding concluded, "We hold a long history of innovation and community in China's Internet market. Our main priority for 2012 is to continue to satisfy the demand of Internet users by providing high quality and innovative products and services to the market."


Fourth Quarter 2011 Financial Results


Revenues

Total revenues for the fourth quarter of 2011 were RMB2.1 billion (US$341.4 million), compared to RMB2.0 billion and RMB1.7 billion for the preceding quarter and the fourth quarter of 2010, respectively.


Revenues from online game services were RMB1.8 billion (US$291.3 million) for the fourth quarter of 2011, compared to RMB1.8 billion and RMB1.4 billion for the preceding quarter and the fourth quarter of 2010, respectively.


Revenues from advertising services were RMB278.5 million (US$44.2 million) for the fourth quarter of 2011, compared to RMB220.5 million and RMB233.7 million for the preceding quarter and the fourth quarter of 2010, respectively.


Revenues from wireless value-added services and others ("WVAS and others") were RMB37.2 million (US$5.9 million) for the fourth quarter of 2011, compared to RMB31.3 million and RMB23.3 million for the preceding quarter and the fourth quarter of 2010, respectively.


Gross Profit

Gross profit for the fourth quarter of 2011 was RMB1.5 billion (US$230.9 million), compared to RMB1.3 billion and RMB1.1 billion for the preceding quarter and the fourth quarter of 2010, respectively. The quarter-over-quarter and year-over-year increases in gross profit were primarily attributable to increased revenues from both the online games and advertising services businesses, partially offset by increased cost of revenues, such as royalties and consultancy fees related to licensed games operations and increased staff-related costs.


The quarter-over-quarter and year-over-year increases in games revenues were primarily attributable to the increased revenues from the Company's self-developed games, which were partially offset by a decline in revenue from Blizzard Entertainment's World of Warcraft.


Tianxia III has performed well since its launch in October. Ghost, Fantasy Westward Journey and Westward Journey Online II also continued their strong performances in the fourth quarter, which was mainly attributable to enhanced game content from their latest expansion packs. The quarter-over-quarter and year-over-year increases in advertising services revenue was primarily attributable to seasonality and the increasing appeal of the Company's portal to users and advertisers, and improved portal and search traffic on the NetEase websites.


Gross Profit (Loss) Margin

Gross profit margin for the online games business for the fourth quarter of 2011 was 72.6%, compared to 71.5% and 71.8% for the preceding quarter and the fourth quarter of 2010, respectively.


Gross profit margin for the advertising business for the fourth quarter of 2011 was 54.5%, compared to 48.4% and 53.5% for the preceding quarter and the fourth quarter of 2010, respectively. The quarter-over-quarter increase in gross profit margin was mainly due to economies of scale as advertising revenue increased in the fourth quarter without a corresponding increase in advertising related costs.


Gross profit margin for the WVAS and others business for the fourth quarter of 2011 was 2.2%, compared to gross loss margin of 13.2% and 19.7% for the preceding quarter and the fourth quarter of 2010, respectively. The quarter over quarter and year-over-year improvements in gross profit margin are mainly due to increased revenues from the e-commence business and mailbox services.


Operating Expenses

Total operating expenses for the fourth quarter of 2011 were RMB529.0 million (US$84.0 million), compared to RMB408.2 million and RMB320.7 million for the preceding quarter and the fourth quarter of 2010, respectively. The quarter-over-quarter increase in operating expenses was primarily due to increased selling and marketing expenses, mainly resulting from increased marketing promotional activities for Tianxia III, World of Warcraft and Ghost, and increased research and development staff-related costs, as well as an impairment provision of RMB50.3 million (US$8.0 million) on the initial online game license fee of Blizzard Entertainment's StarCraft II(®). The year-over-year increase in operating expenses was primarily due to increased selling and marketing expenses, staff-related costs and the aforementioned impairment provision in general and administrative expenses.


Net Profit

Net profit for the fourth quarter of 2011 totaled RMB898.6 million (US$142.8 million), compared to RMB825.8 million and RMB712.5 million for the preceding quarter and the fourth quarter of 2010, respectively. During the fourth quarter of 2011, the Company reported a net foreign exchange loss of RMB36.4 million (US$5.8 million), compared to a net foreign exchange loss of RMB65.0 million and RMB36.4 million for the preceding quarter and the fourth quarter of 2010, respectively.


The quarter-over-quarter and year-over-year foreign exchange losses were mainly due to the exchange losses arising from the Company's Euro-denominated bank deposit balances as of December 31, 2011 as the exchange rate of the Euro against the RMB fluctuated over the periods.


NetEase reported basic and diluted earnings per American depositary share ("ADS") of US$1.09 each for the fourth quarter of 2011. The Company reported basic and diluted earnings per ADS of US$1.00 each for the preceding quarter, and basic and diluted earnings per ADS of US$0.87 each for the fourth quarter of 2010.


Income Taxes

The Company recorded a net income tax charge of RMB122.6 million (US$19.5 million) for the fourth quarter of 2011, compared to RMB140.5 million and RMB83.2 million for the preceding quarter and for the fourth quarter of 2010, respectively. The effective tax rate for the fourth quarter of 2011 was 11.8%, compared to 14.7% for the preceding quarter and 10.3% for the fourth quarter of 2010.


The Company's various principal subsidiaries enjoyed the preferential enterprise income tax rate of 15% as High and New Technology Enterprises from 2008 to 2010. As these subsidiaries have recently renewed their qualifications as High and New Technology Enterprises, the preferential enterprise income tax rate will remain in effect for 2011 through 2013, subject to annual review by the relevant tax authorities in China.


Fiscal Year 2011 Financial Results


Revenues

Total revenues for fiscal year 2011 were RMB7.5 billion (US$1.2 billion), compared to RMB5.7 billion for the preceding fiscal year. Revenues from online games were RMB6.6 billion (US$1.0 billion) for fiscal year 2011, compared to RMB4.9 billion for the preceding fiscal year. Revenues from advertising services were RMB795.4 million (US$126.4 million) for fiscal year 2011, compared to RMB633.2 million for the preceding fiscal year.


Revenues from WVAS and others were RMB124.9 million (US$19.8 million) for fiscal year 2011, compared to RMB82.1 million for the preceding fiscal year.


Gross Profit

Gross profit for fiscal year 2011 was RMB4.9 billion (US$781.4 million), compared to RMB3.7 billion for the preceding fiscal year. The increase in gross profit for fiscal year 2011 was primarily driven by increased revenue, which was partially offset by increased cost of revenue from the online game and advertising service businesses.


The significant increase in online game services revenue in 2011 was principally attributable to the increased revenues from the Company's self-developed games such as Ghost, Fantasy Westward Journey, Heroes of Tang Dynasty, Tianxia III and Westward Journey Online II for the reasons explained above, as well as increased revenue from games licensed from Blizzard Entertainment.


The increase in advertising services revenue in 2011 was attributable to a combination of factors, including the growing Chinese online advertising market and increasing appeal of the Company's portal to users, which improved portal and search traffic on the NetEase websites.


Operating Expenses

Total operating expenses for fiscal year 2011 were RMB1.6 billion (US$253.4 million), compared to RMB1.2 billion for the preceding fiscal year. The increase in operating expenses in 2011 was primarily due to increased selling and marketing expenses comprising mainly marketing and promotional activities for Ghost, Heroes of Tang Dynasty, Blizzard Entertainment's World of Warcraft and StarCraft II, and increased staff-related costs resulting from increased headcount in general and administration and research and development areas, as well as the impairment provision of an initial online game license fee as mentioned above.


Net Profit

Net profit for fiscal year 2011 totaled RMB3.2 billion (US$513.9 million), compared to RMB2.2 billion for the preceding fiscal year. For fiscal year 2011, the Company reported a net foreign exchange loss of RMB79.1 million (US$12.6 million), compared to a net foreign exchange loss of RMB89.5 million for the preceding fiscal year. The net foreign exchange losses for 2011 and 2010 were mainly due to exchange losses arising from the Company's Euro-denominated bank deposit balances as the exchange rate of the Euro against the RMB fluctuated over these periods. NetEase reported basic and diluted earnings per ADS of US$3.93 and US$3.92 for fiscal year 2011, respectively. The Company reported basic and diluted earnings per ADS of US$2.74 and US$2.72 for the preceding fiscal year, respectively.


Income Taxes

The Company recorded a net income tax charge of RMB392.8 million (US$62.4 million) and RMB344.4 million at an effective tax rate of 10.9% and 13.4% for fiscal years 2011 and 2010, respectively.


Other Information

As of December 31, 2011, the Company's total cash and time deposit balance was RMB11.9 billion (US$1.9 billion), compared to RMB9.5 billion as of December 31, 2010. Total held-to-maturity investments balance was RMB993.6 million (US$157.9 million) as of December 31, 2011 (there were no such investments as of December 31, 2010). Cash flow generated from operating activities was RMB1.2 billion (US$197.6 million) for the fourth quarter of 2011, compared to RMB864.9 million and RMB901.5 million for the preceding quarter and the fourth quarter of 2010, respectively.


On December 1, 2011, the Company's Board authorized a share repurchase program of up to US$50 million of the Company's outstanding ADSs. No ADSs have been repurchased as of December 31, 2011. The share repurchase program will end on February 29, 2012.


** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.2939 on the last trading day of 2011 (December 30, 2011) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on December 30, 2011, or at any other certain date. The percentages stated are calculated based on RMB.


Notes to Unaudited Financial Information

The unaudited financial information disclosed in this press release is preliminary. The audit of the financial statements and related notes to be included in the Company's annual report on Form 20-F for the year ended December 31, 2011 is still in progress. In addition, because an audit of the Company's internal controls over financial reporting in connection with section 404 of the Sarbanes-Oxley Act of 2002 has not yet been completed, the Company makes no representation as to the effectiveness of those internal controls as of the end of fiscal year 2011.


Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between the Company's audited financial statements and this preliminary unaudited financial information.


Conference Call

NetEase's management team will host a teleconference call with simultaneous webcast at 8:00 p.m. Eastern Time on Wednesday, February 15, 2012 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, February 16, 2012). NetEase's management will be on the call to discuss the quarterly and annual results and answer questions.


Interested parties may participate in the conference call by dialing 1-877-941-4774 (international: 1-480-629-9760), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-800-406-7325 (international 1-303-590-3030), and entering passcode 4507729#. The replay will be available through March 1, 2012.


This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://ir.netease.com.


About NetEase

NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites, which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia III, Heroes of Tang Dynasty, Datang and Ghost, as well as the licensed games, Blizzard Entertainment's World of Warcraft and StarCraft II.


NetEase also offers online advertising on its websites, which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the web that are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.


Other community services that the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. The Company believes that it is also the largest provider of free e-mail services in China. Furthermore, the NetEase websites as well as its micro-blogging services provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

[eastunder]

CONSENSUS ESTIMATES:

From Knobias

NTES: To Release Q4 Results Feb 15 [AMC]

Wednesday, February 15, 2012 08:30ET

Netease.com Incorated ADS (Nasdaq NM: NTES) is scheduled to release its Q4 financial results on February 15, 2012, after the close of the market (AMC).

CONSENSUS ESTIMATES:

Q4 Revenue: $313.50 million
Q4 EPS: $1.01 per share

FY Revenue: $1119.66 million
FY EPS: $3.73 per share

PREVIOUS PERIOD:

Prev Q4 Revenue: $247.54 million
Prev Q4 EPS: $0.83 per share

Prev FY Revenue: $834.50 million
Prev FY EPS: $2.60 per share

ADDITIONAL INFORMATION

Original Confirmation

The Company will also hold a related conference call to discuss these results.

[johnsyn]

Chinese Internet Stocks on the Upswing -- Ctrip.com and NetEase.com Showing Growth
Netease.Com ADS, Each Representing 25 Ordinary Shares (MM) (NASDAQ:NTES)

Today : Wednesday 15 February 2012

Chinese Internet stocks have been on the upswing of late, outperforming the S&P 500 by a sizeable margin over the last month. Over that period, TickerSpy's Chinese Internet Stocks Index (CHDOT) is up more than 9 percent -- helping Chinese shares traded in New York to a five-month high, Bloomberg reports. Five Star Equities examines investing opportunities in China's Internet Sector and provides Stock research on Ctrip.com International Ltd. (NASDAQ: CTRP) and NetEase.com, Inc. (NASDAQ: NTES). Access to the full company reports can be found at:

www.fivestarequities.com/CTRP

www.fivestarequities.com/NTES

Chinese internet stocks listed in the U.S. often move in accordance with investor sentiment towards China's economy. According to a recent report from Barron's "Chinese Internet stocks are prominently listed on U.S. exchanges, and are among the most widely-held Chinese stocks." Fears of a hard economic landing in China pushed shares of internet firms towards 52-week lows in the early stages of 2012. However recent measures from China's government have restored some optimism regarding the direction of China's economy.

China's economy expanded by 9.2 percent in 2011 from a year earlier and 8.9 percent year-on-year in the fourth quarter, according to the National Bureau of Statistics (NBS). "There is not likely to be any dramatic decline in China's economy this year and a soft landing will be achieved," Pan Xiangdong, chief economist with China Galaxy Securities, said in an interview with Xinhua.

Five Star Equities releases regular market updates on China's Internet Sector so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.fivestarequities.com and get exclusive access to our numerous stock reports and industry newsletters.

The number of those accessing the Internet grew 12.2 percent last year, said the China Internet Network Information Center. There were 356 million mobile Internet users in the country by the end of 2011, a year-on-year increase of 17.5 percent. Even still, the proportion of China's population who are Internet users, 40 percent, is low compared with that of developed Asian countries - for example, the Internet analysis firm Miniwatts Marketing Group says that more than 70 percent of the Japan, South Korea and Singapore population are online.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at: www.fivestarequities.com/disclaimer


Contact:

Five Star Equities

Email Contact

[johnsyn]

5:35 PM Notable earnings after Wednesday's close: A, AEM, CAR, CBS, CF, CLF, CLWR, CTL, EQIX, ETE, ETP, FRT, GG, GGC, HBI, KGC, MAR, NTAP, NTES, NVDA, OI, TEX, TRN, VMC, WFR
Seeking Alpha

[eastunder]

NTES: 4Q earnings/ FY: 2-15-12 AMC

NetEase.com to Report Fourth Quarter and Fiscal Year 2011 Financial Results on February 15, 2012

Today : Wednesday 1 February 2012

NetEase.com, Inc. (Nasdaq: NTES) today announced that it will report its financial results for the fourth quarter and fiscal year 2011 on Wednesday, February 15, 2012, after the close of the U.S. markets.

The earnings teleconference call with simultaneous webcast will take place at 8:00 p.m. Eastern Time on Wednesday, February 15, 2012 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, February 16, 2012). NetEase's management will be on the call to discuss the quarterly and full year results and answer questions.

Interested parties may participate in the conference call by dialing 1-877-941-4774 (international: 1-480-629-9760), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-800-406-7325 (international: 1-303-590-3030), and entering passcode 4507729#. The replay will be available through March 1, 2012.

This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's Investor Relations website at http://corp.netease.com.

[eastunder]

Nice move for the day:

[eastunder]

NTES finviz charts

[eastunder]

NTES 3 year

[johnsyn]

Top 10 Best-Performing U.S.-Listed Chinese Stocks in 2011: MPEL, CHU, FTLK, NTES, BIDU, SPRD, SSW, SNP, CHA, SNDA

Posted: 01 Jan 2012 07:02 AM PST/

Below are the top 10 best-performing U.S.CHINA ANALYST Daily Newsletter -listed Chinese stocks for the past year.

Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) is the 1st best-performing stock in 2011 in this segment of the market. It was up 51.26% for the year. Its price percentage change was -3.02% in the past month. China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) is the 2nd best-performing stock in 2011 in this segment of the market. It was up 48.28% for the year. Its price percentage change was -2.04% in the past month. Funtalk China Holdings Ltd. (NASDAQ:FTLK) is the 3rd best-performing stock in 2011 in this segment of the market. It was up 26.63% for the year. Its price percentage change was 2.57% in the past month. NetEase.com Inc (ADR) (NASDAQ:NTES) is the 4th best-performing stock in 2011 in this segment of the market. It was up 24.07% for the year. Its price percentage change was -0.53% in the past month. Baidu.com, Inc. (ADR) (NASDAQ:BIDU) is the 5th best-performing stock in 2011 in this segment of the market. It was up 20.66% for the year. Its price percentage change was -11.08% in the past month.

Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD) is the 6th best-performing stock in 2011 in this segment of the market. It was up 13.66% for the year. Its price percentage change was -15.64% in the past month. Seaspan Corporation (NYSE:SSW) is the 7th best-performing stock in 2011 in this segment of the market. It was up 10.14% for the year. Its price percentage change was 30.53% in the past month. China Petroleum & Chemical Corp. (ADR) (NYSE:SNP) is the 8th best-performing stock in 2011 in this segment of the market. It was up 9.78% for the year. Its price percentage change was -1.22% in the past month. China Telecom Corporation Limited (ADR) (NYSE:CHA) is the 9th best-performing stock in 2011 in this segment of the market. It was up 9.28% for the year. Its price percentage change was -7.68% in the past month. Shanda Interactive Entertainment Ltd ADR (NASDAQ:SNDA) is the 10th best-performing stock in 2011 in this segment of the market. It was up 0.93% for the year. Its price percentage change was -0.15% in the past month.

[eastunder]

From prior post: Just playing around trying to see their side of it.

"Netease.com's chart action is open to some interpretation. It's clear the stock broke out of a first- stage cup base in February. One school argues the stock has been consolidating since April and has yet to present a workable, second-stage pattern."

(I can see that one. Left side of the cup near that 48.50 tag, Right side break out in Feb as written)




"Another view sees a flawed double-bottom base forming since August. A handle on that base has now grown to six weeks."

(Hummm: I would have thought inverted head and shoulders? Right shoulder being their six week handle on their "base" starting late Oct? WDIK?)



A third view reads the six-week handle as a potential base in its own right, now building its own handle with a possible buy point at 48.42.

(I can see that, and with the typical IBD pivot point of high plus .10, then +.10 on the high of the handle equates to their buy point : 48.32 + .10 = $48.42)

[eastunder]

Zynga Slips; Netease.com Still Leads Gaming Group

By ALAN R. ELLIOTT, INVESTOR'S BUSINESS DAILY Posted 12/16/2011 06:05 PM ET

The buzz in the computer gaming industry Friday revolved around Zynga (ZNGA). The billion-dollar initial offering launched in a tough session and closed 5% below its $10 initial price.

Collectively, the 20 stocks in the Computer Software-Gaming industry group rose a fraction, led by Sohu.com's (SOHU) 2% advance. Unfortunately, the China-based gaming stock was still 56% off its April high.

But other China-based game providers were not nearly so grim.

An estimated 300 million users are driving China's online gaming market toward $6 billion in revenue this year. The country's 800-pound gaming gorilla is Tencent Holdings, a broad-based Internet content provider that commands 30% of the country's gaming market.

Netease.com (NTES) and Shanda Interactive Entertainment (SNDA) wrestle for second place, but neither has quite reached a 20% share.

In fundamental terms, Netease.com is the group's bulldozer. It holds the group's strongest Composite Rating, a 99. Its strong, steady EPS growth has topped analyst consensus views in the past five quarters. Quarterly sales growth has held above 34% since Q4 2009. Netease saw its after-tax margins slip in each quarter last year.

Netease.com's chart action is open to some interpretation. It's clear the stock broke out of a first- stage cup base in February. One school argues the stock has been consolidating since April and has yet to present a workable, second-stage pattern.

Another view sees a flawed double-bottom base forming since August. A handle on that base has now grown to six weeks.

A third view reads the six-week handle as a potential base in its own right, now building its own handle with a possible buy point at 48.42.

This base is tighter and more contained than the prior pattern, but also has its flaws.

A sharp spike and reversal in mid-November interrupt the cup's symmetry. The base has yet to show any real accumulation, and the stock's relative price strength lags below its high.

[eastunder]

NTES Open Gaps 43.41

Direction Date range  
 up Dec-01-2011 45.15 to 45.25  
 up Nov-30-2011 43.41 to 43.89  
 

Intraday

[eastunder]

NetEase's Board Approves New Share Repurchase Program
Press Release: NetEase.com, Inc.


BEIJING , Dec. 1, 2011 /PRNewswire-Asia-FirstCall/ -- NetEase.com, Inc. (NASDAQ: NTES - News), one of China 's leading Internet and online game services providers, today announced that its board of directors has approved a new share repurchase program of up to US$50 million of the company's outstanding American Depositary Shares (ADSs) for a period not to exceed three months.

Under the terms of the approved program, NetEase may repurchase its issued and outstanding ADSs in open-market transactions on the NASDAQ Global Select Market. The timing and dollar amount of repurchase transactions will be subject to Securities and Exchange Commission (SEC) Rule 10b-18 requirements. It is also expected that such repurchases will be effected pursuant to a plan in conformity with SEC Rule 10b5-1. NetEase plans to fund repurchases made under this program from available working capital.

About NetEase

NetEase.com, Inc. is a leading China -based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia II, Heroes of Tang Dynasty, Datang and Ghost, as well as the licensed games, Blizzard Entertainment's World of Warcraft and StarCraft II.

NetEase also offers online advertising on its websites, which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the Web, which are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.

Other community services that the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. The Company believes that it is also the largest provider of free e-mail services in China . Furthermore, the NetEase websites as well as its micro-blogging services provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

[eastunder]

NetEase.com's 3Q profit climbs on stronger sales

NetEase.com posts higher 3rd-qtr profit on stronger advertising sales, demand for online games
By The Associated Press |

http://finance.yahoo.com/news/NetEase-com-3Q-profit-climbs-apf-452346147.html?x=0&l=1


Chinese online game and Web advertising company NetEase.com Inc. said Wednesday that its profit grew in the second quarter, aided by higher revenue amid stronger demand for online games and improved advertising services sales.

The Beijing-based company reported net income rose to 825.8 million yuan ($129.5 million), or 99 cents per American depositary share, for the three months ended Sept. 30. That compares with net income of 585.3 yuan a year earlier.

Revenue rose 39.5 percent to 2 billion yuan ($314.8 million), from 1.4 billion yuan in the prior-year quarter. The company attributed the sharp increase on continued interest in Blizzard Entertainment's World of Warcraft, along with its own roster of games.

Analysts had expected a profit of 88 cents per American depositary share on revenue of $281.2 million, according to FactSet.

NetEase said online games revenue increased nearly 40 percent from a year earlier, while advertising services sales grew 36 percent from a year earlier.

Management said it plans to release its first expansion pack to Heroes of Tang Dynasty in December. It also plans to release expansion packs for Datang and New Fly for Fun, and enter unlimited closed beta testing of launch a new massively multiplayer online role-playing game dubbed Legend of Fairy.

U.S.-traded shares of NetEase rose $1.28, or 2.8 percent, to $46.98 in aftermarket trading. The stock gained $1.46, or 3.3 percent, to $45.70 during the regular session.

[eastunder]

NetEase's Q3 Earnings Increase To Record Levels
by: Investing Hobo November 17, 2011

http://seekingalpha.com/article/308713-netease-s-q3-earnings-increase-to-record-levels

Long before U.S. investors heard about Baidu (BIDU), NetEase (NTES) was one of the first cash generating internet juggernauts listed in the U.S. markets. While NetEase started off as a mix of an internet portal and wireless services company, it was the success of its first self developed game "Westward Journey Online" which provided the enormous cash flow the company would use to expand. With economies of scale starting to kick in for NetEase, both revenues and net income soared to record levels in the third quarter of 2011.

For the third quarter, consolidated revenues grew by 12.9% sequentially and 39.5% annually to $307m. NetEase’s core online gaming business made up the bulk of its revenues with a $275.3m contribution or over 87% of total revenues. The growth and high margin nature (71.5% in Q3) of its gaming unit helped expand operating margin to 47% from 42% a year ago. Unlike peer rivals such as Perfect World (PWRD) that have spent heavily on internal development but have not witnessed equal proportionate revenue growth, scale is significantly benefiting NetEase. U.S. GAAP net income during Q3 grew to a record $129.5m, or 0.99 in earnings per share.

Using any historical gauge, NTES still remains extremely cheap at roughly 11-12 times annualized earnings especially compared to its 41% annual earnings growth. Granted given the extremely pessimistic sentiment overhanging all U.S. listed Chinese stocks in general, NetEase much like other Chinese internet leaders such as Baidu, Sina Corp. (SINA), and Sohu.com (SOHU) actually trade at a premium to smaller peers. Direct Chinese online gaming peers Perfect World and Changyou.com (CYOU) currently trade at only 4.8 and 6.5 times trailing earnings, respectively.

Valuing NetEase solely on earnings is deceiving because the company possesses other assets which arguably reduce its market multiple. After nine years of operation and still amazingly going strong, Westward Journey Online along with succeeding games have generated a cash hoard for the company. At the end of the third quarter, NTES held almost $1.9b in cash equivalents, or roughly 14.50 per share of its stock value is cash vs. zero debt. At a recent share price of 45.00 and subtracting the company’s cash, NetEase’s “enterprise” multiple is further reduced to below 8x annualized earnings.

Perhaps more significant among the company’s assets are not quantifiable. Given the market’s appetite for social media which caused a surge in SINA’s share price in the past year due to its micro-blogging phenomenon Weibo, NetEase is not without a hand in this arena. The company’s own micro-blogging efforts generated a 68.6% sequential surge in user base to 88.5m users in the third quarter. Although well under Weibo’s over 200m user base, its sequential growth is worth keeping an eye on. Clearly given the valuation spread between NTES and SINA, the market is discounting any potential success NetEase may experience in the realm of micro-blogging.

Much like micro-blogging currently, NetEase’s email user base doesn’t contribute much if anything to the company’s bottom line. However at 430m registered users vs. the last official count of 485m total internet users in China, the company has an extremely large reach. If synergies can be created between internet service offerings, higher degrees of realized monetization could occur in the future. Once again with the company’s current valuations barely factoring its successful online gaming division, NetEase’s other initiatives could eventually provide a catalyst for incremental earnings growth moving forward.

While it is currently too early to factor NetEase’s other offerings, they are nevertheless assets which could provide material benefits in the future. With a strong balance sheet and a dominant position in China’s online gaming industry, NetEase remains a conservative play on China’s social media whether it is gaming related currently or micro-blogging related in the future. NetEase’s long operating history has generated retained earnings to date of almost $1.7 billion which has provided a huge war chest for the company’s expansion outside its core gaming business. NTES’s returns may not equal BIDU’s in recent years, but its 1500% move since early 2003 is not bad either and yet due to the company’s growth current valuations still remain attractive.

[eastunder]

NTES: Q3 EPS 99c vs 67c Beats 88c Est

Thursday , November 17, 2011 09:46ET

QUARTER RESULTS
Netease.com Incorated ADS (NTES) reported Q3 results ended September 2011. Q3 Revenues were $314.80M; +50.39% vs yr-ago; BEATING revenue consensus by +11.89%. Q3 EPS was 99c; +47.76% vs yr-ago; BEATING earnings consensus by +12.50%.

Q3 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $314.80M      $209.32M     +50.39%      $281.36M     +11.89% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 EPS:                 99c           67c     +47.76%           88c     +12.50% 
 ----------  ------------  ------------  ----------  ------------  ----------

[eastunder]

NetEase.com Reports Third Quarter 2011 Unaudited Financial Results
Press Release: NetEase.com, Inc. – 21 hours ago.. .

http://finance.yahoo.com/news/NetEase-com-Reports-Third-prnews-626623813.html?x=0&l=1

BEIJING , Nov. 16, 2011 /PRNewswire-Asia-FirstCall/ -- NetEase.com, Inc. (NASDAQ: NTES - News), one of China 's leading Internet and online game services providers, today announced its unaudited financial results for the third quarter ended September 30, 2011 .

William Ding , Chief Executive Officer and Director of NetEase, stated, "We continued to achieve dynamic growth across our business during the third quarter. The popularity of our self-developed games, as well as continued interest in Blizzard Entertainment's World of Warcraft®, led our 12.9% quarter-over quarter and 39.5% year-over-year growth in total revenue. For the third quarter, online games revenue rose 11.3% sequentially and 39.8% year-over-year, followed by strong advertising services sales, which increased 30.0%, compared with the prior quarter and 36.1% year-over-year."

"Open beta testing and successful promotional activities for Heroes of Tang Dynasty contributed to record revenue and user statistics for this game during the quarter, and we plan to release its first expansion pack in December. In conjunction with its ninth commercial anniversary on August 15 , Westward Journey Online II continued to perform well during the quarter. In addition, we launched our latest expansion packs for Westward Journey Online III and Warsong of Westward Journey in August, and Fantasy Westward Journey in September. As a follow up to the success of Ghost's unlimited closed beta testing, we launched its full scale closed beta testing in September, and reached record high PCU in October. To further extend our games pipeline and address the expanding web-based game market in China , we initiated closed beta testing for two new web-based games during the third quarter."

"In late October, we released Tianxia III, a 3D MMORPG. This comprehensive upgrade is designed to leverage the strong Tianxia II user base and further enhance our leading position in the 3D game market. Before the end of the year, we expect to launch expansion packs for Datang, Heroes of Tang Dynasty and New Fly for Fun. In December, Legend of Fairy, a new European-style fairy-themed MMORPG for relatively casual game players, will enter unlimited closed beta testing. We plan to utilize our extensive research and development capabilities to introduce a variety of new self-developed games, including three that are currently under development, and two of which we plan to release for beta testing in mid-2012."

"The 11.0% revenue contribution from our advertising services segment was based on seasonality, as well as further recognition by advertisers for our content innovation, service integration, new product development and increased user appeal for the NetEase portal. Compared with the same period last year, we benefited from increased interest from advertisers in the food and beverage, financial services, cosmetic products, real estate, retail and services sectors."

Mr. Ding continued, "Our mailbox services, micro-blogging and search-based products also continue to gain traction among users. As of September 30, 2011 , the number of registered NetEase email users grew to 430 million, an increase of 4.9% over the second quarter, and the number of micro-blogging users soared to 88.5 million, an improvement of 68.6% over the second quarter."

Mr. Ding concluded, "We continue to advance products and services with a focus on growing our three principal businesses. Through our strategic initiatives to further diversify our games pipeline, advance NetEase's position as the leading email service provider in China and further cultivate our portal business, we believe we can continue to deliver the most innovative products and services that shape the Chinese internet market."

Third Quarter 2011 Financial Results

Revenues

Total revenues for the third quarter of 2011 were RMB2.0 billion ( US$314.8 million ), compared to RMB1.8 billion and RMB1.4 billion for the preceding quarter and the third quarter of 2010, respectively.

Revenues from online games were RMB1.8 billion ( US$275.3 million ) for the third quarter of 2011, compared to RMB1.6 billion and RMB1.3 billion for the preceding quarter and the third quarter of 2010, respectively.

Revenues from advertising services were RMB220.5 million ( US$34.6 million ) for the third quarter of 2011, compared to RMB169.6 million and RMB162.0 million for the preceding quarter and the third quarter of 2010, respectively.

Revenues from wireless value-added services and others ("WVAS and others") were RMB31.3 million ( US$4.9 million ) for the third quarter of 2011, compared to RMB30.7 million and RMB20.9 million for the preceding quarter and the third quarter of 2010, respectively.

Gross Profit

Gross profit for the third quarter of 2011 was RMB1.3 billion ( US$208.1 million ), compared to RMB1.2 billion and RMB952.0 million for the preceding quarter and the third quarter of 2010, respectively. The quarter-over-quarter increase in gross profit was primarily attributable to the increase in game revenues from the Company's self-developed games, such as Fantasy Westward Journey, Heroes of Tang Dynasty and Ghost, as well as increased advertising service revenue, partially offset by increased cost of revenues. Fantasy Westward Journey performed well during the current quarter, which was mainly attributable to seasonality and enhanced game content. Revenue from Heroes of Tang Dynasty grew steadily since its open beta testing in June 2011 , and Ghost continued its strong performance during its unlimited closed beta testing in the third quarter. The quarter-over-quarter increase in advertising services revenue was primarily attributable to seasonality and increasing appeal of the Company's portal to users and advertisers. Increased cost of revenues was primarily due to increased royalties and consultancy fees related to the operation of Blizzard Entertainment's StarCraft® II and World of Warcraft, increased staff-related costs during the third quarter of 2011.

The year-over-year increase in gross profit was primarily attributable to increased revenues from both the online games and advertising businesses, partially offset by increased cost of revenues related mainly to the online games business. The year-over-year increase in online games revenue was primarily driven by increased revenues from the Company's self-developed games, as well as increased revenue from World of Warcraft. Revenues from self-developed games increased primarily as a result of various expansion packs and promotional activities in the third quarter of 2011, as well as the unlimited closed beta testing of Ghost starting in April 2011 and the open beta testing of Heroes of Tang Dynasty starting in June 2011 . The year-over-year increase in revenue from World of Warcraft was mainly due to the release of the game's two expansions, Wrath of the Lich King™ and Cataclysm™, in mainland China in August 2010 and July 2011 , respectively. The year-over-year increase in cost of revenues for the online games business was mainly due to increased royalties and consultancy fees related to World of Warcraft and StarCraft II operations and increased staff-related costs, resulting from increased headcount in 2011. The year-over-year increase in advertising services revenue was primarily due to continued rising demand for advertising services, primarily from food and beverage products, financial services and Internet services sectors.

Gross Profit (Loss) Margin

Gross profit margin for the online game business for the third quarter of 2011 was 71.5%, compared to 70.2% and 71.8% for the preceding quarter and the third quarter of 2010, respectively.

Gross profit margin for the advertising business for the third quarter of 2011 was 48.4%, compared to 43.9% and 51.5% for the preceding quarter and the third quarter of 2010, respectively. The quarter-over-quarter increase in gross profit margin was mainly due to economies of scale as advertising revenue increased in the third quarter without a corresponding increase in advertising related costs.

Gross loss margin for the WVAS and others business for the third quarter of 2011 was 13.2%, compared to gross loss margin of 7.8% and 42.4% for the preceding quarter and the third quarter of 2010, respectively. The quarter over quarter increase in gross loss margin is mainly due to an increase in staff-related costs. The year-over-year decrease in gross loss margin is mainly due to increased revenues from the e-commence business and mailbox services.

Operating Expenses

Total operating expenses for the third quarter of 2011 were RMB408.2 million ( US$64.0 million ), compared to RMB365.8 million and RMB365.0 million for the preceding quarter and the third quarter of 2010, respectively. The quarter-over-quarter increase in operating expenses was primarily due to increased selling and marketing expenses, mainly resulting from increased marketing promotional activities for Fantasy Westward Journey and Warsong of Westward Journey, increased staff-related costs resulting from increased headcount in research and development, and the reversal of share-based compensation costs and accrued bonuses relating to the resignation of a senior executive and certain staff in the preceding quarter. The year-over-year increase in operating expenses was primarily due to the increased staff-related costs as explained above and a change in bad debt provision. The Company reversed a RMB18.7 million bad debt provision in the third quarter of 2010 mainly resulting from the satisfactory legal settlement of an outstanding accounts receivable balance. The increase was partially offset by a decrease in selling and marketing expenses, which was primarily due to the non-recurrence of marketing promotional expenses associated with the celebration of the first anniversary of Tianxia II in the third quarter of 2010.

Net Profit

Net profit for the third quarter of 2011 totaled RMB825.8 million ( US$129.5 million ), compared to RMB772.5 million and RMB585.3 million for the preceding quarter and the third quarter of 2010, respectively. During the third quarter of 2011, the Company reported a net foreign exchange loss of RMB65.0 million ( US$10.2 million ), compared to a net foreign exchange loss of RMB3.0 million and a net foreign exchange gain of RMB54.3 million for the preceding quarter and the third quarter of 2010, respectively.


The quarter-over-quarter and year-over-year foreign exchange gains/losses were mainly due to the exchange gains/losses arising from the Company's Euro-denominated bank deposit balances as of September 30, 2011 as the exchange rate of the Euro against the RMB fluctuated over the periods.

NetEase reported basic and diluted earnings per American depositary share ("ADS") of US$0.99 each for the third quarter of 2011. The Company reported basic and diluted earnings per ADS of US$0.93 each for the preceding quarter, and basic and diluted earnings per ADS of US$0.71 and US$0.70 , respectively, for the third quarter of 2010.

Income Taxes

The Company recorded a net income tax charge of RMB140.5 million ( US$22.0 million ) for the third quarter of 2011, compared to RMB92.4 million and RMB91.3 million for the preceding quarter and for the third quarter of 2010, respectively. The effective tax rate for the third quarter of 2011 was 14.7%, compared to 10.9% for the preceding quarter and 13.7% for the third quarter of 2010.

The Company's various principal subsidiaries enjoyed the preferential enterprise income tax rate of 15% as High and New Technology Enterprises from 2008 to 2010. These subsidiaries are currently in the process of applying to renew the High and New Technology Enterprises qualification and expect to be able to retain this qualification for 2011 to 2013 as the qualification criteria remain unchanged. The quarter-over-quarter increase in effective tax rate was mainly due to the fact that the above-mentioned foreign exchange losses in the third quarter of 2011 occurred in certain tax-exempt entities.

Other Information

As of September 30, 2011 , the Company's total cash and time deposit balance was RMB11.3 billion ( US$1.8 billion ), compared to RMB9.5 billion , as of December 31, 2010 . Total held-to-maturity investments balance was RMB596.5 million ( US$93.5 million ) as of September 30, 2011 (there were no such investments as of December 31, 2010 ). Cash flow generated from operating activities was RMB864.9 million ( US$135.6 million ) for the third quarter of 2011, compared to RMB995.0 million and RMB532.6 million for the preceding quarter and the third quarter of 2010, respectively.

** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.3780 on September 30, 2011 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on September 30, 2011 , or at any other certain date. The percentages stated are calculated based on RMB.

[MONEYMADE]

,,,,,,,Interesting proposition.....lets wait for the smoke to clear

[eastunder]

NTES: 3Q earnings 11-16-11 AMC

NetEase.com to Report Third Quarter 2011 Financial Results on November 16, 2011

Wednesday, November 02, 2011 07:00ET




BEIJING, Nov. 2, 2011 /PRNewswire-Asia/ -- NetEase.com, Inc. (Nasdaq: NTES) today announced that it will report its financial results for the third quarter 2011 on Wednesday, November 16, 2011, after the close of the U.S. markets.


The earnings teleconference call with simultaneous webcast will take place at 8:00 p.m. Eastern Time on Wednesday, November 16, 2011 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, November 17, 2011). NetEase's management will be on the call to discuss the quarterly results and answer questions.


Interested parties may participate in the conference call by dialing 1-877-941-2068 (international: 1-480-629-9712), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-800-406-7325 (international: 1-303-590-3030), and entering passcode 4482741#. The replay will be available through December 1, 2011.


This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's corporate web site at http://corp.netease.com, Investor Info: Earnings Call.


About NetEase

[eastunder]

NTES

9-23-11

41.39

[eastunder]

NTES: Q2 Adj EPS 91c vs 55c Beats 78c Est

Thursday , August 18, 2011 08:06ET

QUARTER RESULTS
Netease.com Incorated ADS (NTES) reported Q2 results ended June 2011. Q2 Revenues were $268.20M; +38.94% vs yr-ago; BEATING revenue consensus by +8.07%. Adjusted Q2 EPS was 91c; +65.45% vs yr-ago; BEATING earnings consensus by +16.67%.

Q2 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Revenues:       $268.20M      $193.03M     +38.94%      $248.17M      +8.07% 
 ----------  ------------  ------------  ----------  ------------  ---------- 
 Adj EPS:             91c           55c     +65.45%           78c     +16.67% 
 ----------  ------------  ------------  ----------  ------------  ----------

[sonicblastervector]

NTES is valued $86 to $111 (currently undervalued) relative to its peers in the Internet Software & Services industry. NTES has a projected P/E of 11.53 while the industry is at 22.26, giving NTES a projected stock price of $86.81. NTES's projected growth rate is 14.23% and has a projected PEG of 0.81 while the industry's projected PEG is 2.01, giving NTES a projected stock price of $111.54. Here are the source calculations and data:
http://www.freestockvalueranker.com/?method=peg_pe&symbol=NTES

[eastunder]

NetEase.com Reports Second Quarter 2011 Unaudited Financial Results

Wednesday, August 17, 2011 18:00ET

http://www.knobias.com/story.htm?eid=3.1.fe8b6c34516217252d7473e32f04f06ccdbb7f03637fe0a2b810fe389e2dea92

BEIJING, Aug. 17, 2011 /PRNewswire-Asia/ -- NetEase.com, Inc. (NASDAQ: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the second quarter ended June 30, 2011.


William Ding, Chief Executive Officer and Director of NetEase, stated, "For the second quarter of 2011, we delivered strong quarter-over-quarter and year-over-year growth across our online games and advertising services. Second quarter online games revenue increased 13.9% quarter-over-quarter driven by our newly launched self-developed game, Ghost, as well as continued demand for Fantasy Westward Journey and World of Warcraft(®), a game licensed from Blizzard Entertainment. Online games revenue increased by 33.6% year-over-year, mainly as a result of the growth in our self-developed games, including Fantasy Westward Journey, Ghost, Westward Journey Online II, Tianxia II and Heroes of Tang Dynasty, along with continued revenue growth from World of Warcraft."


"We are extremely pleased to announce that for the second quarter of 2011, we achieved new record revenue and PCUs for Westward Journey Online II, driven by the release of our latest expansion pack, which contains new features, including expanded content and scenarios as well as the return of eight principal characters with fresh appearances. In the second quarter and during July, we also made several key additions to our robust portfolio of online games. For example, in April we introduced StarCraft(®) II, a game licensed from Blizzard Entertainment, to the Chinese market, and beginning in late July and continuing in August, a series of promotional campaigns is being held to broaden the player base for the game. In July, we launched the highly anticipated World of Warcraft: Cataclysm(TM), the third expansion set for Blizzard Entertainment's award-winning MMORPG. In addition, we initiated unlimited closed beta testing of our self-developed game, Ghost, in April. Its user statistics performance has been outstanding, with users praising its quality. We also successfully launched open beta testing in June for Heroes of Tang Dynasty and are pleased with the revenue and user statistics it has generated so far."


"During the second half of the year, we expect to launch expansion packs for Fantasy Westward Journey, Westward Journey Online III, and Legend of Westward Journey, which we are renaming, 'Warsong of Westward Journey.' In addition, we are preparing to release a comprehensive upgrade of Tianxia II and will continue to enhance the content of Ghost prior to the full-scale closed beta testing planned to commence in the second half of this year."


Mr. Ding continued, "Advertising services revenue rose 33.8% quarter-over-quarter due to a seasonal increase in advertising spending in the second quarter. We also believe that advertisers increasingly appreciate NetEase's content innovation, service integration, new product development and our portal's high and growing appeal to users. Revenue for the advertising segment increased by 16.2% year-over-year with growing demand for advertising services from Internet services, food and beverage products and financial services sectors."


"Our mailbox services and micro-blogging products are gaining broad acceptance and traction among the rapidly growing mobile Internet market in China. Our registered e-mail users reached approximately 410 million as of June 30, 2011, an increase of 13.9% since the end of the first quarter. Growing this strategic portion of our business has been among our top initiatives. During the second quarter, we invested in significant upgrades to our mailbox infrastructure and engaged in promotional activities, including advertising on a high profile television show and collaborating with major mobile phone manufacturers to preinstall our e-mail services on their mobile devices."


"Our micro-blogging services also continue to mature as evidenced by the number of registered micro-blogging users, which grew to approximately 52.5 million as of June 30, 2011, an increase of 32.9% quarter-over-quarter. During the second quarter, we launched two new micro-blogging products, 'micro-debate' and 'micro-event', as well as upgraded our 'micro-blogging life' home page to provide more valuable content to our users. We also hosted the first Micro Movie Festival in China. As our mobile business evolves, we plan to leverage this growing user base to further expand our market share, grow our portfolio of industry leading online games and increase our advertising services revenue," concluded Mr. Ding.


Second Quarter 2011 Financial Results


Revenues


Total revenues for the second quarter of 2011 were RMB1.8 billion (US$275.1 million), compared to RMB1.5 billion and RMB1.3 billion for the preceding quarter and the second quarter of 2010, respectively.


Revenues from online games were RMB1.6 billion (US$244.1 million) for the second quarter of 2011, compared to RMB1.4 billion and RMB1.2 billion for the preceding quarter and the second quarter of 2010, respectively.


Revenues from advertising services were RMB169.6 million (US$26.2 million) for the second quarter of 2011, compared to RMB126.8 million and RMB145.9 million for the preceding quarter and the second quarter of 2010, respectively.


Revenues from wireless value-added services and others ("WVAS and others") were RMB30.7 million (US$4.7 million) for the second quarter of 2011, compared to RMB25.7 million and RMB19.9 million for the preceding quarter and the second quarter of 2010, respectively.


Gross Profit


Gross profit for the second quarter of 2011 was RMB1.2 billion (US$178.4 million), compared to RMB985.0 million and RMB870.9 million for the preceding quarter and the second quarter of 2010, respectively. The quarter-over-quarter increase in gross profit was primarily attributable to the increase in game revenues from the Company's self-developed games, Ghost and Fantasy Westward Journey, and World of Warcraft, a game licensed from Blizzard Entertainment, as well as increased advertising service revenue, partially offset by increased cost of revenues. Revenue from Ghost grew steadily during its unlimited closed beta testing in the second quarter of 2011. The quarter-over-quarter increase in advertising services revenue was primarily attributable to seasonality and increasing appeal of the Company's portal to users and advertisers. Increased cost of revenues was primarily due to increased royalties and consultancy fees related to the operation of Blizzard Entertainment's StarCraft II and World of Warcraft, increased headcount-related costs, and increased staff bonuses during the second quarter of 2011.


The year-over-year increase in gross profit was primarily attributable to increased revenues from both the online games and advertising businesses, partially offset by increased cost of revenues related mainly to the online games business. The year-over-year increase in online games revenue was primarily driven by increased revenues from the Company's self-developed games as well as increased revenue from World of Warcraft. Revenues from self-developed games increased primarily as a result of various expansion packs and promotional activities in the second quarter of 2011, as well as the unlimited closed beta testing of Ghost starting in April 2011. The year-over-year increase in revenue from World of Warcraft was mainly due to the release of Blizzard Entertainment's Wrath of the Lich King(TM) expansion pack in August 2010. The year-over-year increase in cost of revenues for the online games business was mainly due to increased royalties and consultancy fees related to World of Warcraft and StarCraft II operations and increased staff-related costs, resulting from increased headcount in 2011.


The year-over-year increase in advertising services revenue was primarily due to continued rising demand for advertising services, primarily from Internet services, food and beverage products and financial services sectors.


Gross Profit (Loss) Margin


Gross profit margin for the online games business for the second quarter of 2011 was 70.2%, compared to 70.0% and 71.0% for the preceding quarter and the second quarter of 2010, respectively.


Gross profit margin for the advertising business for the second quarter of 2011 was 43.9%, compared to 33.4% and 43.3% for the preceding quarter and the second quarter of 2010, respectively. The quarter-over-quarter increase in gross profit margin was mainly due to economies of scale as advertising revenue increased in the second quarter without a corresponding increase in advertising related costs. Gross loss margin for the WVAS and others business for the second quarter of 2011 was 7.8%, compared to gross loss margin of 21.6% and 40.2% for the preceding quarter and the second quarter of 2010, respectively. The improved gross loss margin for WVAS and others business in the second quarter of 2011 was mainly due to increased revenues from the e-commence business and mailbox services.


Operating Expenses


Total operating expenses for the second quarter of 2011 were RMB365.8 million (US$56.6 million), compared to RMB292.0 million and RMB261.3 million for the preceding quarter and the second quarter of 2010, respectively. The quarter-over-quarter increase in operating expenses was primarily due to increased selling and marketing expenses, mainly resulting from increased marketing promotional activities for Heroes of Tang Dynasty and Ghost. This increase was partially offset by decreased general and administrative expenses, mainly resulting from the reversal of share-based compensation costs and accrued bonuses relating to the resignation of a senior executive and certain staff in the second quarter of 2011. The year-over-year increase in operating expenses was primarily due to increased selling and marketing expenses related to the increased promotional activities as mentioned above, and increased staff-related costs, resulting primarily from increased headcount in the research and development areas. In addition, share-based compensation costs decreased by RMB13.7 million year-over-year, resulting mainly from the reversal of share-based compensation costs, as referenced above.


Net Profit


Net profit for the second quarter of 2011 totaled RMB772.5 million (US$119.5 million), compared to RMB737.4 million and RMB485.7 million for the preceding quarter and the second quarter of 2010, respectively. During the second quarter of 2011, the Company reported a net foreign exchange loss of RMB3.0 million (US$0.5 million), compared to a net foreign exchange gain of RMB25.3 million and a net foreign exchange loss of RMB67.8 million for the preceding quarter and the second quarter of 2010, respectively.


The quarter-over-quarter and year-over-year foreign exchange gains/losses were mainly due to the translation gains/losses arising from the Company's Euro-denominated bank deposit balances as of June 30, 2011 as the exchange rate of the Euro against the RMB fluctuated over the periods. NetEase reported basic and diluted earnings per American depositary share ("ADS") of US$0.92 and US$0.91, respectively, for the second quarter of 2011. The Company reported basic and diluted earnings per ADS of US$0.88 and US$0.87, respectively, for the preceding quarter and basic and diluted earnings per ADS of US$0.58 each for the second quarter of 2010.


Income Taxes


The Company recorded a net income tax charge of RMB92.4 million (US$14.3 million) for the second quarter of 2011, compared to RMB37.2 million and RMB75.5 million for the preceding quarter and for the second quarter of 2010, respectively. The effective tax rate for the second quarter of 2011 was 10.9%, compared to 4.8% for the preceding quarter and 13.4% for the second quarter of 2010.


The Company's various principal subsidiaries enjoyed the preferential enterprise income tax rate of 15% as High and New Technology Enterprises from 2008 to 2010. These subsidiaries are currently in the process of applying to renew the High and New Technology Enterprises qualification and expect to be able to retain this qualification for 2011 to 2013 as the qualification criteria remain unchanged. The quarter-over-quarter increase in effective tax rate was mainly due to the recognition of a tax benefit of approximately RMB47.1 million related to fiscal year 2010 upon two of the Company's subsidiaries receiving Key Software Enterprises status during the first quarter of 2011. The year-over-year decrease in effective tax rate was mainly due to the fact that one of the Company's other subsidiaries was recognized as a Software Enterprise in the fourth quarter of 2010 resulting in tax-exempt status for 2010 and 2011.


Other Information


As of June 30, 2011, the Company's total cash and time deposit balance was RMB11.1 billion (US$1.7 billion), compared to RMB9.5 billion, as of December 31, 2010. Total held-to-maturity investments balance was RMB168.9 million (US$26.1 million) as of June 30, 2011(there were no such investments as of December 31, 2010). Cash flow generated from operating activities was RMB995.0 million (US$153.9 million) for the second quarter of 2011, compared to RMB969.3 million and RMB744.3 million for the preceding quarter and the second quarter of 2010, respectively.


** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.4635 on June 30, 2011 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2011, or at any other certain date. The percentages stated are calculated based on RMB.

[johnsyn]

I expect a few down days because of allegations against CTE that popped up on the internet yesterday. Shakes investor confidence again in all Chinese stocks. Cross your fingers it blows over quickly

[eastunder]

CONSENSUS ESTIMATES:

NTES: To Release Q2 Results Aug 17 [AMC]

Tuesday , August 16, 2011 13:00ET

Netease.com Incorated ADS (Nasdaq NM: NTES) is scheduled to release its Q2 financial results on August 17, 2011, after the close of the market (AMC).

CONSENSUS ESTIMATES:

Q2 Revenue: $245.88 million
Q2 EPS: $0.78 per share

PREVIOUS PERIOD:

Prev Q2 Revenue: $193.03 million
Prev Q2 EPS: $0.55 per share

ADDITIONAL INFORMATION

Original Confirmation

The Company will also hold a related conference call to discuss these results.

[eastunder]

NTES 2Q earnings: 8-17-11 AMC

NetEase.com to Report Second Quarter 2011 Financial Results on August 17, 2011

Wednesday, August 03, 2011 07:00ET



BEIJING, Aug. 3, 2011 /PRNewswire-Asia-FirstCall/ -- NetEase.com, Inc. (Nasdaq: NTES) announced today that it will report its financial results for the second quarter 2011 on Wednesday, August 17, 2011, after the close of the U.S. markets.


The earnings teleconference call with simultaneous webcast will take place at 9:00 p.m. Eastern Time on Wednesday, August 17, 2011 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, August 18, 2011). NetEase's management will be on the call to discuss the quarterly results and answer questions.


Interested parties may participate in the conference call by dialing 1-877-941-2068 (international: 1-480-629-9712), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 800-406-7325 (international 303-590-3030), and entering passcode 4460484#. The replay will be available through September 1, 2011.


This call will be webcast live and the replay will be available for 12 months. Both will be available on NetEase's corporate web site at http://corp.netease.com, Investor Info: Earnings Call.


About NetEase

NetEase.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. NetEase's online communities and personalized premium services have established a large and stable user base for the NetEase websites which are operated by its affiliates. In particular, NetEase provides online game services to Internet users through its in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II and III, Tianxia II, Heroes of Tang Dynasty and Datang, as well as the licensed game, Blizzard Entertainment's World of Warcraft and StarCraft II.


NetEase also offers online advertising on its websites which enables advertisers to reach its substantial user base. In addition, NetEase has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. NetEase also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the Web which are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.


Other community services which the NetEase websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. NetEase is also the largest provider of free email services in China. Furthermore, the NetEase websites provide various channels of content. NetEase aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.

[eastunder]

Playing Games Is Serious Business In China

By DONALD H. GOLD, INVESTOR'S BUSINESS DAILY Posted 07/22/2011 04:47 PM ET


What is it about China and online gaming?

Certain themes keep popping up among some of China's most successful stocks: communication, social contact, technology and entertainment. Think of China Mobile (CHL) (wireless communications), Baidu (BIDU) (Web search and email), Sina (SINA) (social networking) and Ctrip.com (CTRP) (online travel reservations).

To understand such online video games firms as Changyou.com (CYOU) and NetEase.com (NTES), you have to understand massive multiplayer online role-playing games.


In a MMORPG, a virtual fantasy world is created by the game's producer. Players — a few or a few million — can hook in and assume a role. What each player does with his or her character affects the game and the virtual world.

MMORPGs are cheap entertainment. They're also a form of contact with millions of other people — mostly young — anonymously and across thousands of miles.

Now consider what China's real world looks like.

Millions are uprooted and must travel from their hometowns, many for the first time, in search of work or education. Many are young. They may have some money, but not a lot. No wonder contact is so important.

The four top names in IBD's gaming software industry group, by EPS Rating, are Chinese companies that get most of their revenue from online gaming: NetEase.com, Giant Interactive Group (GA), Sohu.com (SOHU) and Changyou.com.

NetEase.com, featured in the New America in Friday's IBD, recently cleared a low handle in low volume. Thus, the stock probably has more work to do on its base.

The base, which dates back to mid-April, still shows distribution, namely the down weeks in above-average volume.

NetEase has upped its earnings per share each year since at least 2002. That streak should continue with a 34% gain this year and 12% next year, according to analysts' consensus estimate.

Earnings gains in the past four quarters ranged from -4% to 69%. Estimates for Q2 are for a 42% rise.

Changyou.com, a 2009 spinoff from Sohu.com, has formed a cup-with-high-handle. The buy point from this pattern shows up at 47.91.

Changyou.com, like NetEase, could use a bit more institutional buying in its base. So far, the base has three down weeks in above-average volume and no up weeks in similar trading.

Changyou.com has posted three straight quarters of accelerating earnings gains, from 9% to 14% to 18% to 27%. Sales growth also accelerated in those periods, from 17% to 25% to 30% to 35%.

Changyou last year posted 65% pretax margin.

Sohu's earnings growth has been in an improving trend, rising 7%, 21%, 34% and 31% the past few quarters. But the stock remains deep in a correction. Low-priced Giant Interactive also is near the lows of its correction.

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New Game Proves Wildly Popular For NetEase

By KEVIN HARLIN, INVESTOR'S BUSINESS DAILY 07/21/2011 02:18 PM ET

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=579024&ven=yahoo


The Chinese are finally grappling with "Cataclysm."

But it's not an economic or political one. This "Cataclysm" involves dragons, elves, goblins and humans, battling for survival in the mythical realm of Azeroth.

This month, Activision Blizzard (ATVI) and its partner in China, NetEase.com (NTES), released the third installment of the wildly popular online role-playing game "World of Warcraft."


Players line up for copies of "World of Warcraft: Cataclysm" signed by the developers at the launch in Fountain Valley, Calif., on Dec. 7, 2010. AP View Enlarged Image

"Cataclysm," as the new addition is known, sold more than 4.7 million copies around the globe in the first month after its December release elsewhere in the world. Chinese regulatory troubles had delayed the launch on the mainland.

But Beijing-based NetEase, which operates the game there, expects huge demand from that nation's legions of loyal gamers.

When NetEase released the previous "WoW" update — "Wrath of the Lich King" — in the fourth quarter, it said the game drove the 13% year-over-year increase in online game revenue. That gives analysts high hopes for "Cataclysm," which many didn't expect to hit China until this year's fourth quarter.

Popular Game

"'WoW' is one of the most popular online games in China, and the earlier-than-expected release of 'Cataclysm' suggests that revenue contribution from this game could be higher," Samsung Securities analyst Paul Wuh wrote in a research note.

As of Dec. 31, there were 12 million people around the globe signed up to play "World of Warcraft," one of the world's most popular MMORPG, or massively multi-player online role-playing game. That count was before the release of the Chinese version of "Cataclysm," which should appeal to existing gamers and lure in new ones. The update includes new maps, mythical creatures and adventures.

Overall, MMORPG revenue is expected to grow at a compounded rate of 9.8% a year in the U.S. and Western Europe through 2015, according to Lewis Ward, a games market analyst with IDC. He doesn't track the Asian market directly, but thinks MMORPGs could grow even faster there.

"World of Warcraft" remains the top game globally. And the 4.7 million first-month sales of "Cataclysm" should keep it there.

"It's a huge addition and has revitalized the franchise," he told IBD.

Samsung's Wuh estimates that "World of Warcraft" will account for 34% of NetEase' revenue in 2011.

NetEase — in English it's a literal translation of the Chinese name Wang Yi — formed in 2007 as a web search company.

It soon added email and other Internet services before refocusing as an online gaming company. Its founder and chief executive, William Lei Ding, still owns almost 45% of the company.

NetEase isn't alone in this online game space. Chinese firms Shanda (SNDA), Tencent and The9 (NCTY) have catered to the local market with various success. In fact, The9 had the exclusive "World of Warcraft" license in China from 2004 until 2009.

Officials at The9 expected its "WoW" license to be renewed. It wasn't, causing net losses there in 2009, 2010 and so far this year.

NetEase has operated "World of Warcraft" in China since September 2009, and "StarCraft II: Wings of Liberty" since April 2011, under license from those games' maker, Activision Blizzard. It has a three-year deal, with options for extensions.



But the company is also developing other games that resonate with Chinese players, something The9 failed to do.

NetEase launched its first in-house developed MMORPG, "Westward Journey Online," in December 2010. It followed that up with subsequent versions and new games.

There are two business models in effect. For some of the original games, including "World of Warcraft," players buy prepaid point cards, similar to a phone card, at Internet cafes, convenience stores and online. That works out to about 6 cents per hour of play.

Players can also pay extra for add-ons to improve their characters' performances or to enhance game-play.

Some of its newer games are completely free to play, relying instead on revenue from those upgrades and enhancements players often buy.

Almost 86% of NetEase's revenue last year came from those per-minute and add-on fees, down from almost 99% two years before. The company is bolstering that income via advertisements sold on its popular Web portals and game sites, as well as some mobile phone add-on services.

Its news, shopping and search site, www.163.com, is the sixth-most clicked-on page in that country, according to traffic tracker Alexa.com. That makes it the No. 27 most-viewed site on the planet.

Still, there are potential worries for investors. Blizzard could yank the "World of Warcraft" franchise from NetEase when the contract expires.

There's also the potentially disruptive role the government plays in Chinese game and Internet companies. New versions of games, including "Cataclysm," are often delayed for months after their global release, while censors ask for tweaks.

Government Control

In the past the Chinese government has also moved to restrict minors from playing graphically violent games and limit the amount of time adults can play. When the government declared three days of mourning in 2008 after the massive and deadly Sichuan Province earthquake, all online game sites were shuttered.

The government also heavily regulates Internet cafes and occasionally cracks down on and shutters illegal ones. The majority of Chinese playing MMORPGs do so at those cafes.

Still, the company has posted several quarters of double-digit earnings and sales growth.

In its most recent quarter, NetEase earned 86 cents per American depositary receipt, up 69% from a year ago. Revenue climbed 34%, to $229 million. The largest component of revenue, online games, brought in $211.6 million, up about 28% from a year ago.

Analysts forecast full-year earnings per ADR of $3.42, which would be a 32% bump from a year ago.

[eastunder]

NTES 6/26/11 43.30