To The Moon

Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue, you may find some valuable information that might affect the stock price in the following weeks.

Now let's look at some key points from NetEase Q2 2022 Q&A Session Transcript    $NetEase(NTES)$ $NTES-S(09999)$

Q:NetEase has continuously made efforts in the overseas market in recent years and has established several game developers overseas. What is our take on the pace of overseas investments in the future? Also, could you perhaps share some colors on the products in development?

A:Overseas market is upgrade important for NetEase. And as everybody knows that in the past year, we've not received any license approval of in China. So we have to make the strategic choice to shift some of our R&D resources to the global market, the European markets to the Japanese or the Asian markets. So everybody knows that we have a very strong track record in game production. We have very high R&D efficiencies, and we are now working very closely with many overseas developers to find a product that will be welcomed by the global game players. We actually do have a lot of products under development. And hopefully, you will see some of them being introduced to the market very soon. On June 2, everybody saw the success of Diablo that we – Blizzard, and I think it's been a very positive very, very strong release of that game.

Q:We have seen Internet companies highlighting about cost efficiencies, such as staff costs and marketing spending on the back of global macro heaviness these days. Can management share the thought about the outlook about the operating expenses in sales and marketing, R&D and G&A?

A:The question is about optimization of cost. Sometimes it throughout of development operation of our business, sometimes we do cut costs in certain areas, but we'll also increase our investment spend in other areas. So NetEase, we will continue to optimize the way we spend the cost structure of the company. Only just because there is weakness in the macro, it doesn't necessarily mean that we have to take certain actions to address that. NetEase, we think very long-term, and we care about the sustainable long-term growth of the company.

Q:What's management view on the domestic regulatory landscape and expectation on the Banhao approval? With a likely lower number of Banhao approved in the future, how will this change our game strategy, including Jar app, IP investment, et cetera?

A:I kind, of mentioned that in the earlier question, one of the reasons we have to look abroad and be more active in expanding our -- against our user base overseas because of lack of know-how in China. And secondly, it kind of tells us that we have to value or cherish the domestic market even more, because know-how the precious resources now. So everybody how we get, we have to work, we’re putting more effort to make sure every game we develop launch to the market will be popular, will be welcomed by the game players in China.

The above Q&A are highlights that are edited for brevity. Click here for the full NetEase Q2 2022 Earnings Call Transcript.​​​

If you want to know more details, you can click here to re-watch the NetEase Q2 2022 Earnings Conference Call​