NetEase Announces Second Quarter 2023 Unaudited Financial Results
HANGZHOU, China, Aug. 24, 2023 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced its unaudited financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Financial Highlights
- Net revenues were RMB24.0 billion (US$3.3 billion), an increase of 3.7% compared with the second quarter of 2022.
- Games and related value-added services net revenues were RMB18.8 billion (US$2.6 billion), an increase of 3.6% compared with the second quarter of 2022.
- Youdao net revenues were RMB1.2 billion (US$166.4 million), an increase of 26.2% compared with the second quarter of 2022.
- Cloud Music net revenues were RMB1.9 billion (US$268.7 million), a decrease of 11.1% compared with the second quarter of 2022.
- Innovative businesses and others net revenues were RMB2.1 billion (US$283.7 million), an increase of 9.9% compared with the second quarter of 2022.
- Gross profit was RMB14.4 billion (US$2.0 billion), an increase of 11.1% compared with the second quarter of 2022.
- Total operating expenses were RMB8.3 billion (US$1.1 billion), an increase of 4.0% compared with the second quarter of 2022.
- Net income attributable to the Company's shareholders was RMB8.2 billion (US$1.1 billion). Non-GAAP net income from continuing operations attributable to the Company's shareholders was RMB9.0 billion (US$1.2 billion).[1]
- Basic net income per share was US$0.35 (US$1.77 per ADS). Non-GAAP basic net income from continuing operations per share was US$0.39 (US$1.93 per ADS).[1]
[1] As used in this announcement, non-GAAP net income from continuing operations attributable to the Company's shareholders and non-GAAP basic and diluted net income from continuing operations per share and per ADS are defined to exclude share-based compensation expenses. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this announcement. |
Second Quarter 2023 and Recent Operational Highlights
- Released new hit titles in June across diverse genres and strengthened global appeal:
- Justice mobile game led China's iOS top grossing and download charts following its launch.
- Racing Master ranked No. 3 on China's iOS top grossing chart soon after its launch.
- Badlanders ranked No. 2 on China's iOS top download chart soon after its launch.
- Launched Harry Potter: Magic Awakened in the global market, including Japan, North America and Europe.
- Achieved steady performances with longstanding flagship titles including the Fantasy Westward Journey series and maintained the popularity of hit games including Eggy Party, Identity V and Justice.
- Bolstered robust game pipeline with ongoing development of multiple highly anticipated games in diversified genres.
- Delivered notable growth of subscription-based memberships for Cloud Music, driving meaningful profit margin expansion and setting the stage for future development.
- Achieved robust year-over-year revenue growth and improved operating cash flow for Youdao, driven by the strong performance of learning services and online marketing services.
"Our steady second quarter results reflect our dedication to producing exceptional content across our businesses, which generated total net revenues of RMB24.0 billion, up nearly 4% year-over-year," said Mr. William Ding, Chief Executive Officer and Director of NetEase. "Players continue to revere our flagship Fantasy Westward Journey series, while embracing newer titles like Eggy Party that extend our reach in casual games. The June releases of widely acclaimed Justice mobile game and Racing Master further showcase our endless drive to bring players innovative, first-rate games in diversified genres. We believe that each addition to our game portfolio validates our exceptional R&D capabilities and the broad influence our ingenuity has in the marketplace, including expanding the casual game market and altering the face of traditional MMOs.
"In addition to games, our Cloud Music and Youdao businesses remain on track and are generating premium content. Throughout the NetEase family, we prioritize the creation of novel and high-quality products and services that grow our global appeal, elevate user experiences, and advance their respective industries," Mr. Ding concluded.
Second Quarter 2023 Financial Results
Net Revenues
Net revenues for the second quarter of 2023 were RMB24,011.3 million (US$3,311.3 million), compared with RMB25,046.3 million and RMB23,159.1 million for the preceding quarter and the second quarter of 2022, respectively.
Net revenues from games and related value-added services were RMB18,798.6 million (US$2,592.5 million) for the second quarter of 2023, compared with RMB20,065.6 million and RMB18,139.8 million for the preceding quarter and the second quarter of 2022, respectively. Net revenues from the operation of online games accounted for approximately 91.7% of the segment's net revenues for the second quarter of 2023, compared with 92.7% and 92.8% for the preceding quarter and the second quarter of 2022, respectively. Net revenues from mobile games accounted for approximately 73.6% of net revenues from the operation of online games for the second quarter of 2023, compared with 72.3% and 66.1% for the preceding quarter and the second quarter of 2022, respectively.
Net revenues from Youdao were RMB1,206.6 million (US$166.4 million) for the second quarter of 2023, compared with RMB1,163.3 million and RMB956.2 million for the preceding quarter and the second quarter of 2022, respectively.
Net revenues from Cloud Music were RMB1,948.5 million (US$268.7 million) for the second quarter of 2023, compared with RMB1,959.8 million and RMB2,191.5 million for the preceding quarter and the second quarter of 2022, respectively.
Net revenues from innovative businesses and others were RMB2,057.5 million (US$283.7 million) for the second quarter of 2023, compared with RMB1,857.6 million and RMB1,871.5 million for the preceding quarter and the second quarter of 2022, respectively.
Gross Profit
Gross profit for the second quarter of 2023 was RMB14,375.4 million (US$1,982.5 million), compared with RMB14,896.5 million and RMB12,941.5 million for the preceding quarter and the second quarter of 2022, respectively.
The quarter-over-quarter decrease in games and related value-added services' gross profit was primarily due to decreased net revenues from the operation of online games as a result of seasonality. The year-over-year increase was primarily due to increased net revenues from the operation of online games such as Eggy Party, as well as decreased royalty fees due to the termination of certain licensed games.
The quarter-over-quarter decrease in Youdao's gross profit primarily resulted from decreased revenue contribution from its learning services. The year-over-year increase primarily resulted from increased revenue contribution from its online marketing services and learning services.
The quarter-over-quarter and year-over-year increases in Cloud Music's gross profit primarily resulted from increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.
The quarter-over-quarter and year-over-year increases in innovative businesses and others' gross profit were primarily due to increased e-commerce net revenues from Yanxuan.
Gross Profit Margin
Gross profit margin for games and related value-added services for the second quarter of 2023 was 67.4%, compared with 66.7% and 64.9% for the preceding quarter and the second quarter of 2022, respectively. The quarter-over-quarter and year-over-year increases were primarily attributable to changes in the revenue mix of NetEase's self-developed, co-developed and licensed games.
Gross profit margin for Youdao for the second quarter of 2023 was 47.0%, compared with 51.7% and 42.8% for the preceding quarter and the second quarter of 2022, respectively. The quarter-over-quarter decrease was mainly due to the reduction in revenue contribution from its learning services which have a higher gross profit margin compared to its other products and services. The year-over-year increase was mainly due to increased revenue contribution from its online marketing services and learning services.
Gross profit margin for Cloud Music for the second quarter of 2023 was 27.0%, compared with 22.4% and 13.0% for the preceding quarter and the second quarter of 2022, respectively. The quarter-over-quarter and year-over-year improvements were mainly due to the factors enumerated above.
Gross profit margin for innovative businesses and others for the second quarter of 2023 was 29.5%, compared with 25.4% and 25.8% for the preceding quarter and the second quarter of 2022, respectively. The quarter-over-quarter and year-over-year increases were mainly due to margin improvement from Yanxuan.
Operating Expenses
Total operating expenses for the second quarter of 2023 were RMB8,312.8 million (US$1,146.4 million), compared with RMB7,676.5 million and RMB7,995.2 million for the preceding quarter and the second quarter of 2022, respectively. The quarter-over-quarter increase was mainly due to increased marketing and research and development expenditures related to games and related value-added services. The year-over-year increase was mainly due to higher staff-related costs.
Other Income/ (Expenses)
Other income/ (expenses) consisted of investment (loss)/ income, interest income, exchange gains/ (losses) and others. The quarter-over-quarter increase was mainly due to net unrealized exchange gains arising from the Company's U.S. dollar-denominated bank deposits and loans balances as the exchange rate of the U.S. dollar against the RMB fluctuated in the second quarter of 2023. The year-over-year increase was mainly due to higher investment income from fair value changes of equity investments with readily determinable fair value, as well as higher net unrealized exchange gains.
Income Tax
The Company recorded a net income tax charge of RMB712.1 million (US$98.2 million) for the second quarter of 2023, compared with RMB1,628.6 million and RMB1,259.3 million for the preceding quarter and the second quarter of 2022, respectively. The effective tax rate for the second quarter of 2023 was 8.0%, compared with 19.5% and 22.0% for the preceding quarter and the second quarter of 2022, respectively. The lower effective tax rate for the second quarter of 2023 was primarily due to tax benefits recognized in the quarter. The effective tax rate represents certain estimates by the Company as to the tax obligations and benefits applicable to it in each quarter.
Net Income and Non-GAAP Net Income
Net income attributable to the Company's shareholders totaled RMB8,242.8 million (US$1,136.7 million) for the second quarter of 2023, compared with RMB6,754.6 million and RMB5,291.5 million for the preceding quarter and the second quarter of 2022, respectively.
NetEase reported basic net income of US$0.35 per share (US$1.77 per ADS) for the second quarter of 2023, compared with US$0.29 per share (US$1.45 per ADS) and US$0.22 per share (US$1.11 per ADS) for the preceding quarter and the second quarter of 2022, respectively.
Non-GAAP net income from continuing operations attributable to the Company's shareholders totaled RMB9,017.5 million (US$1,243.6 million) for the second quarter of 2023, compared with RMB7,566.2 million and RMB5,409.8 million for the preceding quarter and the second quarter of 2022, respectively.
NetEase reported non-GAAP basic net income from continuing operations of US$0.39 per share (US$1.93 per ADS) for the second quarter of 2023, compared with US$0.32 per share (US$1.62 per ADS) and US$0.23 per share (US$1.14 per ADS) for the preceding quarter and the second quarter of 2022, respectively.
Other Financial Information
As of June 30, 2023, the Company's total cash and cash equivalents, current and non-current time deposits and restricted cash, as well as short-term investments balance, minus short-term and long-term loans, totaled RMB99.6 billion (US$13.7 billion), compared with RMB95.6 billion as of December 31, 2022. Cash flow generated from operating activities was RMB7.7 billion (US$1.1 billion) for the second quarter of 2023, compared with RMB6.0 billion and RMB6.6 billion for the preceding quarter and the second quarter of 2022, respectively.
Quarterly Dividend
The board of directors has approved a dividend of US$0.1050 per share (US$0.5250 per ADS) for the second quarter of 2023 to holders of ordinary shares and holders of ADSs as of the close of business on September 8, 2023, Beijing/ Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on September 8, 2023 (Beijing/ Hong Kong Time). The payment date is expected to be September 19, 2023 for holders of ordinary shares, and on or around September 22, 2023 for holders of ADSs.
NetEase paid a dividend of US$0.0930 per share (US$0.4650 per ADS) for the first quarter of 2023 in June 2023.
Under the Company's current dividend policy, the determination to make dividend distributions and the amount of such distribution in any particular quarter will be made at the discretion of its board of directors and will be based upon the Company's operations and earnings, cash flow, financial condition and other relevant factors.
Share Repurchase Program
On November 17, 2022, the Company announced that its board of directors had approved a new share repurchase program of up to US$5.0 billion of the Company's ADSs and ordinary shares in open market transactions. This share repurchase program commenced on January 10, 2023 following the completion of the prior program on January 9, 2023, and will be in effect for a period not to exceed 36 months from such date. As of June 30, 2023, approximately 6.1 million ADSs had been repurchased under this program for a total cost of US$536.4 million.
The extent to which NetEase repurchases its ADSs and its ordinary shares depends upon a variety of factors, including market conditions. These programs may be suspended or discontinued at any time.
** The United States dollar (US$) amounts disclosed in this announcement are presented solely for the convenience of the reader. The percentages stated are calculated based on RMB.
Conference Call
NetEase's management team will host a teleconference call with simultaneous webcast at 8:00 a.m. New York Time on Thursday, August 24, 2023 (Beijing/ Hong Kong Time: 8:00 p.m., Thursday, August 24, 2023). 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 1-914-202-3258 and providing conference ID: 10032534, 15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 1-855-883-1031 and entering PIN: 10032534. The replay will be available through August 31, 2023.
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, Inc.
NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of the most popular and longest running mobile and PC games available in China and globally.
Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, inspires players, and passionately delivers value for its thriving community worldwide. By infusing play with culture, and education with technology, NetEase transforms gaming into a meaningful vehicle to build a more entertaining and enlightened world.
Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-leading technology, and Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private label consumer lifestyle brand.
NetEase's market-leading ESG initiatives are among the most recognized in the global media and entertainment industry, earning it inclusion in 2022 Dow Jones Sustainability World Index, 2022 Dow Jones Sustainability Emerging Markets Index, and 2023 Bloomberg Gender-Equality Index, as well as receiving an "A" rating from MSCI. For more information, please visit: http://ir.netease.com/.
Forward Looking Statements
This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. In addition, statements that are not historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in government regulation that could adversely affect the industry and geographical markets in which NetEase operates; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; the risk related to economic uncertainty and capital market disruption; the risk related to the expansion of NetEase's businesses and operations internationally; and the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.
Non-GAAP Financial Measures
NetEase considers and uses non-GAAP financial measures, such as non-GAAP net income from continuing operations attributable to the Company's shareholders and non-GAAP basic and diluted net income from continuing operations per ADS and per share, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
NetEase defines non-GAAP net income from continuing operations attributable to the Company's shareholders as net income from continuing operations attributable to the Company's shareholders excluding share-based compensation expenses. Non-GAAP net income from continuing operations attributable to the Company's shareholders enables NetEase's management to assess its operating results without considering the impact of share-based compensation expenses. NetEase believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company's current operating performance and prospects in the same manner as management does, if they so choose. NetEase also believes that the use of this non-GAAP financial measure facilitates investors' assessment of its operating performance.
Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP net income from continuing operations attributable to the Company's shareholders is that it does not reflect all items of expense/ income that affect our operations. Share-based compensation expenses have been and may continue to be incurred in NetEase's business and are not reflected in the presentation of non-GAAP net income from continuing operations attributable to the Company's shareholders. In addition, the non-GAAP financial measures NetEase uses may differ from the non-GAAP measures used by other companies, including peer companies, and therefore their comparability may be limited.
NetEase compensates for these limitations by reconciling non-GAAP net income from continuing operations attributable to the Company's shareholders to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. See "Unaudited Reconciliation of GAAP and Non-GAAP Results" at the end of this announcement. NetEase encourages you to review its financial information in its entirety and not rely on a single financial measure.
Contact for Media and Investors:
Margaret Shi
Email: [email protected]
Tel: (+86) 571-8985-3378
Twitter: https://twitter.com/NetEase_Global
NETEASE, INC. |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands) |
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December 31, |
June 30, |
June 30, |
|||||||||||||||||||||||||||||
2022 |
2023 |
2023 |
|||||||||||||||||||||||||||||
RMB |
RMB |
USD (Note 1) |
|||||||||||||||||||||||||||||
Assets |
|||||||||||||||||||||||||||||||
Current assets: |
|||||||||||||||||||||||||||||||
Cash and cash equivalents |
24,889,000 |
12,766,270 |
1,760,549 |
||||||||||||||||||||||||||||
Time deposits |
84,947,679 |
90,195,524 |
12,438,532 |
||||||||||||||||||||||||||||
Restricted cash |
2,699,055 |
2,912,852 |
401,701 |
||||||||||||||||||||||||||||
Accounts receivable, net |
5,002,872 |
5,343,028 |
736,837 |
||||||||||||||||||||||||||||
Inventories |
993,636 |
806,960 |
111,285 |
||||||||||||||||||||||||||||
Prepayments and other current assets, net |
5,448,284 |
5,352,876 |
738,195 |
||||||||||||||||||||||||||||
Short-term investments |
7,622,673 |
6,846,342 |
944,154 |
||||||||||||||||||||||||||||
Total current assets |
131,603,199 |
124,223,852 |
17,131,253 |
||||||||||||||||||||||||||||
Non-current assets: |
|||||||||||||||||||||||||||||||
Property, equipment and software, net |
6,342,330 |
7,347,204 |
1,013,226 |
||||||||||||||||||||||||||||
Land use rights, net |
4,121,767 |
4,147,468 |
571,962 |
||||||||||||||||||||||||||||
Deferred tax assets |
1,480,789 |
1,320,697 |
182,132 |
||||||||||||||||||||||||||||
Time deposits |
2,973,840 |
2,681,840 |
369,843 |
||||||||||||||||||||||||||||
Restricted cash |
270 |
290 |
40 |
||||||||||||||||||||||||||||
Other long-term assets |
26,238,790 |
28,184,371 |
3,886,803 |
||||||||||||||||||||||||||||
Total non-current assets |
41,157,786 |
43,681,870 |
6,024,006 |
||||||||||||||||||||||||||||
Total assets |
172,760,985 |
167,905,722 |
23,155,259 |
||||||||||||||||||||||||||||
Liabilities, Redeemable Noncontrolling Interests |
|||||||||||||||||||||||||||||||
Current liabilities: |
|||||||||||||||||||||||||||||||
Accounts payable |
1,507,141 |
740,607 |
102,134 |
||||||||||||||||||||||||||||
Salary and welfare payables |
4,732,941 |
3,386,236 |
466,983 |
||||||||||||||||||||||||||||
Taxes payable |
2,813,096 |
2,560,047 |
353,047 |
||||||||||||||||||||||||||||
Short-term loans |
23,875,704 |
11,881,623 |
1,638,551 |
||||||||||||||||||||||||||||
Contract liabilities |
12,518,890 |
12,943,844 |
1,785,038 |
||||||||||||||||||||||||||||
Accrued liabilities and other payables |
11,381,075 |
10,826,617 |
1,493,060 |
||||||||||||||||||||||||||||
Total current liabilities |
56,828,847 |
42,338,974 |
5,838,813 |
||||||||||||||||||||||||||||
Non-current liabilities: |
|||||||||||||||||||||||||||||||
Deferred tax liabilities |
2,126,120 |
2,209,583 |
304,715 |
||||||||||||||||||||||||||||
Long-term loans |
3,654,964 |
3,953,664 |
545,235 |
||||||||||||||||||||||||||||
Other long-term liabilities |
1,277,574 |
1,137,672 |
156,892 |
||||||||||||||||||||||||||||
Total non-current liabilities |
7,058,658 |
7,300,919 |
1,006,842 |
||||||||||||||||||||||||||||
Total liabilities |
63,887,505 |
49,639,893 |
6,845,655 |
||||||||||||||||||||||||||||
Redeemable noncontrolling interests |
136,440 |
135,415 |
18,675 |
||||||||||||||||||||||||||||
NetEase, Inc.'s shareholders' equity |
104,731,317 |
114,264,783 |
15,757,834 |
||||||||||||||||||||||||||||
Noncontrolling interests |
4,005,723 |
3,865,631 |
533,095 |
||||||||||||||||||||||||||||
Total equity |
108,737,040 |
118,130,414 |
16,290,929 |
||||||||||||||||||||||||||||
Total liabilities, redeemable noncontrolling |
172,760,985 |
167,905,722 |
23,155,259 |
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The accompanying notes are an integral part of this announcement. |
NETEASE, INC. |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
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(in thousands, except per share data or per ADS data) |
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Three Months Ended |
Six Months Ended |
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June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
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2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
||||||||||||||||||||||||||||||
Net revenues |
23,159,078 |
25,046,287 |
24,011,301 |
3,311,310 |
46,714,920 |
49,057,588 |
6,765,351 |
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Cost of revenues |
(10,217,587) |
(10,149,741) |
(9,635,888) |
(1,328,851) |
(20,937,050) |
(19,785,629) |
(2,728,563) |
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Gross profit |
12,941,491 |
14,896,546 |
14,375,413 |
1,982,459 |
25,777,870 |
29,271,959 |
4,036,788 |
|||||||||||||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||||||||
Selling and marketing expenses |
(3,300,705) |
(2,905,046) |
(3,271,705) |
(451,188) |
(6,216,194) |
(6,176,751) |
(851,813) |
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General and administrative expenses |
(1,112,755) |
(1,021,678) |
(1,132,147) |
(156,130) |
(2,128,524) |
(2,153,825) |
(297,026) |
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Research and development expenses |
(3,581,700) |
(3,749,732) |
(3,908,907) |
(539,063) |
(6,979,782) |
(7,658,639) |
(1,056,175) |
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Total operating expenses |
(7,995,160) |
(7,676,456) |
(8,312,759) |
(1,146,381) |
(15,324,500) |
(15,989,215) |
(2,205,014) |
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Operating profit |
4,946,331 |
7,220,090 |
6,062,654 |
836,078 |
10,453,370 |
13,282,744 |
1,831,774 |
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Other income/ (expenses): |
||||||||||||||||||||||||||||||||||||
Investment (loss)/ income, net |
(707,489) |
471,368 |
287,691 |
39,674 |
(1,256,191) |
759,059 |
104,679 |
|||||||||||||||||||||||||||||
Interest income, net |
505,991 |
776,030 |
935,578 |
129,022 |
964,235 |
1,711,608 |
236,042 |
|||||||||||||||||||||||||||||
Exchange gains/ (losses), net |
865,283 |
(386,568) |
1,464,956 |
202,027 |
767,403 |
1,078,388 |
148,717 |
|||||||||||||||||||||||||||||
Other, net |
121,175 |
258,033 |
120,826 |
16,663 |
337,505 |
378,859 |
52,247 |
|||||||||||||||||||||||||||||
Income before tax |
5,731,291 |
8,338,953 |
8,871,705 |
1,223,464 |
11,266,322 |
17,210,658 |
2,373,459 |
|||||||||||||||||||||||||||||
Income tax |
(1,259,320) |
(1,628,559) |
(712,090) |
(98,202) |
(2,478,591) |
(2,340,649) |
(322,790) |
|||||||||||||||||||||||||||||
Net income from continuing operations |
4,471,971 |
6,710,394 |
8,159,615 |
1,125,262 |
8,787,731 |
14,870,009 |
2,050,669 |
|||||||||||||||||||||||||||||
Net income from discontinued operations |
624,864 |
- |
- |
- |
624,864 |
- |
- |
|||||||||||||||||||||||||||||
Net income |
5,096,835 |
6,710,394 |
8,159,615 |
1,125,262 |
9,412,595 |
14,870,009 |
2,050,669 |
|||||||||||||||||||||||||||||
Accretion of redeemable noncontrolling |
(754) |
(860) |
(868) |
(120) |
(1,487) |
(1,728) |
(238) |
|||||||||||||||||||||||||||||
Net loss attributable to noncontrolling |
195,395 |
45,100 |
84,020 |
11,587 |
274,391 |
129,120 |
17,806 |
|||||||||||||||||||||||||||||
Net income attributable to the |
5,291,476 |
6,754,634 |
8,242,767 |
1,136,729 |
9,685,499 |
14,997,401 |
2,068,237 |
|||||||||||||||||||||||||||||
Including: |
||||||||||||||||||||||||||||||||||||
-Net income from continuing operations |
4,666,612 |
6,754,634 |
8,242,767 |
1,136,729 |
9,060,635 |
14,997,401 |
2,068,237 |
|||||||||||||||||||||||||||||
-Net income from discontinued operations |
624,864 |
- |
- |
- |
624,864 |
- |
- |
|||||||||||||||||||||||||||||
Basic net income per share * |
1.62 |
2.10 |
2.56 |
0.35 |
2.96 |
4.66 |
0.64 |
|||||||||||||||||||||||||||||
-Continuing operations |
1.43 |
2.10 |
2.56 |
0.35 |
2.77 |
4.66 |
0.64 |
|||||||||||||||||||||||||||||
-Discontinued operations |
0.19 |
- |
- |
- |
0.19 |
- |
- |
|||||||||||||||||||||||||||||
Basic net income per ADS * |
8.08 |
10.49 |
12.80 |
1.77 |
14.78 |
23.29 |
3.21 |
|||||||||||||||||||||||||||||
-Continuing operations |
7.13 |
10.49 |
12.80 |
1.77 |
13.83 |
23.29 |
3.21 |
|||||||||||||||||||||||||||||
-Discontinued operations |
0.95 |
- |
- |
- |
0.95 |
- |
- |
|||||||||||||||||||||||||||||
Diluted net income per share * |
1.60 |
2.07 |
2.54 |
0.35 |
2.93 |
4.61 |
0.64 |
|||||||||||||||||||||||||||||
-Continuing operations |
1.41 |
2.07 |
2.54 |
0.35 |
2.74 |
4.61 |
0.64 |
|||||||||||||||||||||||||||||
-Discontinued operations |
0.19 |
- |
- |
- |
0.19 |
- |
- |
|||||||||||||||||||||||||||||
Diluted net income per ADS * |
8.00 |
10.37 |
12.69 |
1.75 |
14.63 |
23.05 |
3.18 |
|||||||||||||||||||||||||||||
-Continuing operations |
7.05 |
10.37 |
12.69 |
1.75 |
13.69 |
23.05 |
3.18 |
|||||||||||||||||||||||||||||
-Discontinued operations |
0.95 |
- |
- |
- |
0.94 |
- |
- |
|||||||||||||||||||||||||||||
Weighted average number of ordinary |
||||||||||||||||||||||||||||||||||||
Basic |
3,274,695 |
3,221,083 |
3,218,783 |
3,218,783 |
3,275,980 |
3,219,926 |
3,219,926 |
|||||||||||||||||||||||||||||
Diluted |
3,305,504 |
3,256,511 |
3,248,916 |
3,248,916 |
3,310,809 |
3,252,707 |
3,252,707 |
|||||||||||||||||||||||||||||
* Each ADS represents five ordinary shares. |
The accompanying notes are an integral part of this announcement. |
NETEASE, INC. |
||||||||||||||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
||||||||||||||||||||||||||||||
2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
||||||||||||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||||||||||||||||||
Net income |
5,096,835 |
6,710,394 |
8,159,615 |
1,125,262 |
9,412,595 |
14,870,009 |
2,050,669 |
|||||||||||||||||||||||||||||
Net income from discontinued operations |
(624,864) |
- |
- |
- |
(624,864) |
- |
- |
|||||||||||||||||||||||||||||
Adjustments to reconcile net income to net cash provided |
||||||||||||||||||||||||||||||||||||
Depreciation and amortization |
609,036 |
1,082,269 |
661,363 |
91,206 |
1,375,216 |
1,743,632 |
240,458 |
|||||||||||||||||||||||||||||
Fair value changes of equity security investments |
735,159 |
(226,720) |
(78,035) |
(10,762) |
2,276,161 |
(304,755) |
(42,028) |
|||||||||||||||||||||||||||||
Impairment losses of investments and other long-term assets |
243,085 |
- |
47,870 |
6,602 |
248,085 |
47,870 |
6,602 |
|||||||||||||||||||||||||||||
Fair value changes of short-term investments |
(119,882) |
(137,916) |
(96,884) |
(13,361) |
(199,658) |
(234,800) |
(32,380) |
|||||||||||||||||||||||||||||
Share-based compensation cost |
764,447 |
822,413 |
787,862 |
108,652 |
1,510,601 |
1,610,275 |
222,067 |
|||||||||||||||||||||||||||||
Allowance for expected credit losses |
10,965 |
20,720 |
8,540 |
1,178 |
10,652 |
29,260 |
4,035 |
|||||||||||||||||||||||||||||
Losses/ (gains) on disposal of property, equipment and software |
481 |
(610) |
252 |
35 |
1,926 |
(358) |
(49) |
|||||||||||||||||||||||||||||
Unrealized exchange (gains)/ losses |
(890,066) |
385,961 |
(1,466,295) |
(202,211) |
(792,032) |
(1,080,334) |
(148,985) |
|||||||||||||||||||||||||||||
Gains on disposal of long-term investments |
- |
(5,768) |
(16,382) |
(2,259) |
(4,000) |
(22,150) |
(3,055) |
|||||||||||||||||||||||||||||
Deferred income taxes |
(169,539) |
577,666 |
(334,380) |
(46,113) |
145,689 |
243,286 |
33,551 |
|||||||||||||||||||||||||||||
Share of results on equity method investees |
(134,569) |
(95,808) |
(129,292) |
(17,830) |
(1,046,067) |
(225,100) |
(31,043) |
|||||||||||||||||||||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||||||||||||||||||||||
Accounts receivable |
82,282 |
(1,116,282) |
770,551 |
106,264 |
294,357 |
(345,731) |
(47,678) |
|||||||||||||||||||||||||||||
Inventories |
17,791 |
117,330 |
69,410 |
9,572 |
121,382 |
186,740 |
25,753 |
|||||||||||||||||||||||||||||
Prepayments and other assets |
(163,612) |
125,827 |
(7,233) |
(997) |
(733,455) |
118,594 |
16,355 |
|||||||||||||||||||||||||||||
Accounts payable |
48,452 |
(612,939) |
(115,791) |
(15,968) |
(43,921) |
(728,730) |
(100,496) |
|||||||||||||||||||||||||||||
Salary and welfare payables |
782,789 |
(2,225,737) |
758,106 |
104,548 |
(973,435) |
(1,467,631) |
(202,396) |
|||||||||||||||||||||||||||||
Taxes payable |
(538,234) |
733,716 |
(992,892) |
(136,926) |
(464,788) |
(259,176) |
(35,742) |
|||||||||||||||||||||||||||||
Contract liabilities |
279,669 |
489,991 |
(41,196) |
(5,681) |
201,469 |
448,795 |
61,892 |
|||||||||||||||||||||||||||||
Accrued liabilities and other payables |
600,934 |
(643,836) |
(306,784) |
(42,312) |
497,798 |
(950,620) |
(131,099) |
|||||||||||||||||||||||||||||
Net cash provided by operating activities |
6,631,159 |
6,000,671 |
7,678,405 |
1,058,899 |
11,213,711 |
13,679,076 |
1,886,431 |
|||||||||||||||||||||||||||||
Cash flows from investing activities: |
||||||||||||||||||||||||||||||||||||
Purchase of property, equipment and software |
(445,054) |
(652,939) |
(520,544) |
(71,786) |
(1,194,415) |
(1,173,483) |
(161,831) |
|||||||||||||||||||||||||||||
Proceeds from sale of property, equipment and software |
23,338 |
2,504 |
4,292 |
592 |
35,903 |
6,796 |
937 |
|||||||||||||||||||||||||||||
Purchase of intangible assets, content and licensed copyrights |
(85,121) |
(826,682) |
(283,321) |
(39,072) |
(228,957) |
(1,110,003) |
(153,076) |
|||||||||||||||||||||||||||||
Net change in short-term investments with terms of three |
(159,173) |
(723,151) |
1,630,013 |
224,789 |
1,551,672 |
906,862 |
125,062 |
|||||||||||||||||||||||||||||
Purchase of short-term investments with terms over three |
- |
- |
- |
- |
(1,250,000) |
- |
- |
|||||||||||||||||||||||||||||
Proceeds from maturities of short-term investments with terms |
1,459,172 |
104,269 |
- |
- |
2,013,003 |
104,269 |
14,379 |
|||||||||||||||||||||||||||||
Investment in long-term investments |
(899,968) |
(1,229,048) |
(270,228) |
(37,266) |
(2,590,239) |
(1,499,276) |
(206,760) |
|||||||||||||||||||||||||||||
Proceeds from disposal of long-term investments |
6,413 |
41,280 |
16,531 |
2,280 |
40,650 |
57,811 |
7,973 |
|||||||||||||||||||||||||||||
Placement/ rollover of matured time deposits |
(33,122,029) |
(36,320,103) |
(10,874,831) |
(1,499,708) |
(57,168,026) |
(47,194,934) |
(6,508,479) |
|||||||||||||||||||||||||||||
Proceeds from maturities of time deposits |
32,100,141 |
22,332,349 |
21,918,791 |
3,022,740 |
46,799,936 |
44,251,140 |
6,102,511 |
|||||||||||||||||||||||||||||
Change in other long-term assets |
(60,900) |
(120,841) |
(31,189) |
(4,301) |
(230,445) |
(152,030) |
(20,966) |
|||||||||||||||||||||||||||||
Net cash (used in)/ provided by investing activities |
(1,183,181) |
(17,392,362) |
11,589,514 |
1,598,268 |
(12,220,918) |
(5,802,848) |
(800,250) |
|||||||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
NETEASE, INC. |
||||||||||||||||||||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
||||||||||||||||||||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
||||||||||||||||||||||||||||||
2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
||||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
||||||||||||||||||||||||||||||
Cash flows from financing activities: |
||||||||||||||||||||||||||||||||||||
Net changes from loans with terms of three months or less |
2,721,487 |
2,638,040 |
(14,970,935) |
(2,064,586) |
6,124,682 |
(12,332,895) |
(1,700,784) |
|||||||||||||||||||||||||||||
Proceed of loans with terms over three months |
1,641,708 |
1,279,559 |
2,171,541 |
299,469 |
3,556,918 |
3,451,100 |
475,928 |
|||||||||||||||||||||||||||||
Payment of loans with terms over three months |
(32,273) |
(40,422) |
(3,233,500) |
(445,920) |
(32,273) |
(3,273,922) |
(451,494) |
|||||||||||||||||||||||||||||
Net Amounts received/ (paid) related to capital contribution from |
33,200 |
24,349 |
22,228 |
3,065 |
(68,842) |
46,577 |
6,423 |
|||||||||||||||||||||||||||||
Cash paid for repurchase of NetEase's ADSs/ purchase of |
(2,119,613) |
(2,116,757) |
(2,195,210) |
(302,733) |
(3,363,530) |
(4,311,967) |
(594,647) |
|||||||||||||||||||||||||||||
Dividends paid to NetEase's shareholders |
(1,403,637) |
(1,212,340) |
(2,119,316) |
(292,267) |
(3,087,109) |
(3,331,656) |
(459,456) |
|||||||||||||||||||||||||||||
Net cash provided by/ (used in) financing activities |
840,872 |
572,429 |
(20,325,192) |
(2,802,972) |
3,129,846 |
(19,752,763) |
(2,724,030) |
|||||||||||||||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and |
74,898 |
15,498 |
(47,876) |
(6,602) |
53,696 |
(32,378) |
(4,465) |
|||||||||||||||||||||||||||||
Net increase/ (decrease) in cash, cash equivalents and restricted cash |
6,363,748 |
(10,803,764) |
(1,105,149) |
(152,407) |
2,176,335 |
(11,908,913) |
(1,642,314) |
|||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, at the beginning |
13,188,702 |
27,588,325 |
16,784,561 |
2,314,697 |
17,376,115 |
27,588,325 |
3,804,604 |
|||||||||||||||||||||||||||||
Cash, cash equivalents and restricted cash, at end of the period |
19,552,450 |
16,784,561 |
15,679,412 |
2,162,290 |
19,552,450 |
15,679,412 |
2,162,290 |
|||||||||||||||||||||||||||||
Supplemental disclosures of cash flow information: |
||||||||||||||||||||||||||||||||||||
Cash paid for income tax, net |
1,055,096 |
1,074,579 |
1,625,045 |
224,104 |
2,570,426 |
2,699,624 |
372,295 |
|||||||||||||||||||||||||||||
Cash paid for interest expense |
93,079 |
275,714 |
326,646 |
45,047 |
130,820 |
602,360 |
83,069 |
|||||||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
NETEASE, INC. |
||||||||||||||||||||||||||||||||
UNAUDITED SEGMENT INFORMATION |
||||||||||||||||||||||||||||||||
(in thousands, except percentages) |
||||||||||||||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
||||||||||||||||||||||||||
2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
||||||||||||||||||||||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
||||||||||||||||||||||||||
Net revenues: |
||||||||||||||||||||||||||||||||
Games and related value-added services |
18,139,843 |
20,065,597 |
18,798,646 |
2,592,452 |
36,781,657 |
38,864,243 |
5,359,624 |
|||||||||||||||||||||||||
Youdao |
956,225 |
1,163,270 |
1,206,634 |
166,402 |
2,156,766 |
2,369,904 |
326,825 |
|||||||||||||||||||||||||
Cloud Music |
2,191,510 |
1,959,841 |
1,948,539 |
268,716 |
4,258,716 |
3,908,380 |
538,990 |
|||||||||||||||||||||||||
Innovative businesses and others |
1,871,500 |
1,857,579 |
2,057,482 |
283,740 |
3,517,781 |
3,915,061 |
539,912 |
|||||||||||||||||||||||||
Total net revenues |
23,159,078 |
25,046,287 |
24,011,301 |
3,311,310 |
46,714,920 |
49,057,588 |
6,765,351 |
|||||||||||||||||||||||||
Cost of revenues: |
||||||||||||||||||||||||||||||||
Games and related value-added services |
(6,375,598) |
(6,683,048) |
(6,122,836) |
(844,379) |
(13,427,648) |
(12,805,884) |
(1,766,012) |
|||||||||||||||||||||||||
Youdao |
(546,498) |
(561,420) |
(639,459) |
(88,185) |
(1,109,189) |
(1,200,879) |
(165,609) |
|||||||||||||||||||||||||
Cloud Music |
(1,905,954) |
(1,520,378) |
(1,422,855) |
(196,221) |
(3,721,603) |
(2,943,233) |
(405,890) |
|||||||||||||||||||||||||
Innovative businesses and others |
(1,389,537) |
(1,384,895) |
(1,450,738) |
(200,066) |
(2,678,610) |
(2,835,633) |
(391,052) |
|||||||||||||||||||||||||
Total cost of revenues |
(10,217,587) |
(10,149,741) |
(9,635,888) |
(1,328,851) |
(20,937,050) |
(19,785,629) |
(2,728,563) |
|||||||||||||||||||||||||
Gross profit: |
||||||||||||||||||||||||||||||||
Games and related value-added services |
11,764,245 |
13,382,549 |
12,675,810 |
1,748,073 |
23,354,009 |
26,058,359 |
3,593,612 |
|||||||||||||||||||||||||
Youdao |
409,727 |
601,850 |
567,175 |
78,217 |
1,047,577 |
1,169,025 |
161,216 |
|||||||||||||||||||||||||
Cloud Music |
285,556 |
439,463 |
525,684 |
72,495 |
537,113 |
965,147 |
133,100 |
|||||||||||||||||||||||||
Innovative businesses and others |
481,963 |
472,684 |
606,744 |
83,674 |
839,171 |
1,079,428 |
148,860 |
|||||||||||||||||||||||||
Total gross profit |
12,941,491 |
14,896,546 |
14,375,413 |
1,982,459 |
25,777,870 |
29,271,959 |
4,036,788 |
|||||||||||||||||||||||||
Gross profit margin: |
||||||||||||||||||||||||||||||||
Games and related value-added services |
64.9 % |
66.7 % |
67.4 % |
67.4 % |
63.5 % |
67.0 % |
67.0 % |
|||||||||||||||||||||||||
Youdao |
42.8 % |
51.7 % |
47.0 % |
47.0 % |
48.6 % |
49.3 % |
49.3 % |
|||||||||||||||||||||||||
Cloud Music |
13.0 % |
22.4 % |
27.0 % |
27.0 % |
12.6 % |
24.7 % |
24.7 % |
|||||||||||||||||||||||||
Innovative businesses and others |
25.8 % |
25.4 % |
29.5 % |
29.5 % |
23.9 % |
27.6 % |
27.6 % |
|||||||||||||||||||||||||
The accompanying notes are an integral part of this announcement. |
NETEASE, INC.
NOTES TO UNAUDITED FINANCIAL INFORMATION
Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB7.2513 on the last trading day of June 2023 (June 30, 2023) 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, 2023, or at any other certain date.
Note 2: Share-based compensation cost reported in the Company's unaudited condensed consolidated statements of comprehensive income is set out as follows in RMB and USD (in thousands):
Three Months Ended |
Six Months Ended |
||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
|||||||
2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
|||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
|||||||
Share-based compensation cost included in: |
|||||||||||||
Cost of revenues |
173,840 |
203,514 |
193,001 |
26,616 |
371,975 |
396,515 |
54,682 |
||||||
Operating expenses |
|||||||||||||
Selling and marketing expenses |
31,817 |
32,353 |
31,069 |
4,285 |
62,190 |
63,422 |
8,746 |
||||||
General and administrative expenses |
297,891 |
294,281 |
281,326 |
38,797 |
576,953 |
575,607 |
79,380 |
||||||
Research and development expenses |
260,899 |
292,265 |
282,466 |
38,954 |
499,483 |
574,731 |
79,259 |
||||||
The accompanying notes are an integral part of this announcement. |
Note 3: The financial information prepared and presented in this announcement might be different from those published and to be published by NetEase's listed subsidiaries to meet the disclosure requirements under U.S. GAAP or different accounting standards requirement.
Note 4: The unaudited reconciliation of GAAP and non-GAAP results is set out as follows in RMB and USD (in thousands, except per share data or per ADS data):
Three Months Ended |
Six Months Ended |
|||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
June 30, |
June 30, |
||||||||
2022 |
2023 |
2023 |
2023 |
2022 |
2023 |
2023 |
||||||||
RMB |
RMB |
RMB |
USD (Note 1) |
RMB |
RMB |
USD (Note 1) |
||||||||
Net income from continuing operations attributable to the |
4,666,612 |
6,754,634 |
8,242,767 |
1,136,729 |
9,060,635 |
14,997,401 |
2,068,237 |
|||||||
Add: Share-based compensation |
743,198 |
811,600 |
774,683 |
106,834 |
1,466,801 |
1,586,283 |
218,758 |
|||||||
Non-GAAP net income from continuing operations |
5,409,810 |
7,566,234 |
9,017,450 |
1,243,563 |
10,527,436 |
16,583,684 |
2,286,995 |
|||||||
Non-GAAP basic net income from continuing |
1.65 |
2.35 |
2.80 |
0.39 |
3.21 |
5.15 |
0.71 |
|||||||
Non-GAAP basic net income from continuing |
8.26 |
11.74 |
14.01 |
1.93 |
16.07 |
25.75 |
3.55 |
|||||||
Non-GAAP diluted net income from continuing |
1.64 |
2.32 |
2.78 |
0.38 |
3.18 |
5.10 |
0.70 |
|||||||
Non-GAAP diluted net income from continuing |
8.18 |
11.62 |
13.88 |
1.91 |
15.90 |
25.49 |
3.52 |
|||||||
* Each ADS represents five ordinary shares. |
The accompanying notes are an integral part of this announcement. |
Note 5: A reconciliation statement to the International Financial Reporting Standards in respect of the Company's unaudited financial results for the six months ended June 30, 2023 prepared in accordance with U.S. GAAP set forth above will be published pursuant to the rules and regulations applicable to the Company in Hong Kong by September 30, 2023.
SOURCE NetEase, Inc.
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