NetEase's (HKG:9999) Earnings Offer More Than Meets The Eye

Simply Wall St.05-30

Shareholders appeared to be happy with NetEase, Inc.'s (HKG:9999) solid earnings report last week. This reaction by the market reaction is understandable when looking at headline profits and we have ...

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This reaction by the market reaction is understandable when looking at headline profits and we have ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-9999/netease-shares/news/neteases-hkg9999-earnings-offer-more-than-meets-the-eye\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>NetEase's (HKG:9999) Earnings Offer More Than Meets The Eye</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nNetEase's (HKG:9999) Earnings Offer More Than Meets The Eye\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-05-30 06:23 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/media/hkg-9999/netease-shares/news/neteases-hkg9999-earnings-offer-more-than-meets-the-eye><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Shareholders appeared to be happy with NetEase, Inc.'s (HKG:9999) solid earnings report last week.  This reaction by the market reaction is understandable when looking at headline profits and we have ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-9999/netease-shares/news/neteases-hkg9999-earnings-offer-more-than-meets-the-eye\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"09999","symbol_name":"网易-S","start_time":0,"source_url":"https://simplywall.st/stocks/hk/media/hkg-9999/netease-shares/news/neteases-hkg9999-earnings-offer-more-than-meets-the-eye","article_id":"2639626608","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/company-cover/416512-main-header/1756247269474"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/hk/media/hkg-9999/netease-shares/news/neteases-hkg9999-earnings-offer-more-than-meets-the-eye","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2639626608","pubTimestamp":1780093435,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Shareholders appeared to be happy with NetEase, Inc.'s ( HKG:9999 ) solid earnings report last week. This reaction by...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"09999":"网易-S","NTES":"网易"},"translate_title":"网易（HKG：9999）的盈利报价超出了人们的预期","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NTES":1.5,"09999":1.5},"content_text":"Shareholders appeared to be happy with NetEase, Inc.'s (HKG:9999) solid earnings report last week.  This reaction by the market reaction is understandable when looking at headline profits and we have found some further encouraging factors.    This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.SEHK:9999 Earnings and Revenue History May 29th 2026 Advertisement A Closer Look At NetEase's Earnings  As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit.  The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time.  You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.  That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest.  While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio.  Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.  For the year to March 2026, NetEase had an accrual ratio of -1.21.   That indicates that its free cash flow quite significantly exceeded its statutory profit.    In fact, it had free cash flow of CN¥50b in the last year, which was a lot more than its statutory profit of CN¥34.1b.    NetEase's free cash flow improved over the last year, which is generally good to see.   That might leave you wondering what analysts are forecasting in terms of future profitability.  Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.   Our Take On NetEase's Profit Performance Happily for shareholders, NetEase produced plenty of free cash flow to back up its statutory profit numbers.      Because of this, we think NetEase's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem!     And the EPS is up 57% annually, over the last three years.     The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider.    Ultimately, this article has formed an opinion based on historical data. However, it can also be great to think about what analysts are forecasting for the future.  At Simply Wall St, we have analyst estimates which you can view by clicking here.  This note has only looked at a single factor that sheds light on the nature of NetEase's profit.   But there are plenty of other ways to inform your opinion of a company.  Some people consider a high return on equity to be a good sign of a quality business.  So you may wish to see this free  collection of companies boasting high return on equity, or  this list of stocks with high insider ownership. Valuation is complex, but we're here to simplify it.Discover if NetEase might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"dataReport","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.43.1","shortVersion":"4.43.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2639626608","isCrawlerRequest":true}