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Netease fourth quarter net profit of 197.6 million US dollars fell 65.1%

via:博客园     time:2018/2/8 14:32:28     readed:221

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208081412248-430507486.jpg

Tencent Technology News, according to foreign reports, Netease (NASDAQ stock code: NTES) Wednesday released the company for the fourth quarter and full year ended December 31, 2017 unaudited earnings. Earnings reports, NetEase net revenues for the fourth quarter of 14.6 billion yuan (about 2.2 billion US dollars), an increase of 20.7%; attributable to shareholders of the company's net profit of 1.286 billion yuan (about 197.6 million US dollars) During the same period, RMB3,683 million went down by 65.1%.

The fourth quarter of the main performance:

NetEase net revenues for the fourth quarter of 14.6 billion yuan (about 2.2 billion US dollars), an increase of 20.7% over the previous year.

NetEase net game revenues for the fourth quarter of 8.0804 trillion yuan (about 12.302 billion US dollars), down 10.7% over the same period the previous year.

- NetEase's fourth-quarter advertising service net revenue was 736.6 million yuan (about 1.132 US dollars), an increase of 10.8% over the previous year.

- NetEase fourth quarter e-commerce services net revenue of 4.6537 billion yuan (about 7,153,000,000 U.S. dollars), an increase of 175.2% over the previous year.

NetEase Net Revenue for e-mail and other businesses for the fourth quarter was RMB1,213.0 billion (approximately US $ 186.4 million), an increase of 54.8% over the same period of last year.

NetEase fourth quarter gross profit of 5.7 billion yuan (about 882.9 million US dollars), down 11.1% over the same period the previous year.

- Netease fourth quarter total operating expenses of 4.3 billion yuan (about 663.6 million US dollars), an increase of 66.3% over the same period the previous year.

Net profit attributable to NetEase shareholders for the fourth quarter was RMB1.3 billion (approximately US $ 197.6 million), a decrease of 65.1% from the same period of last year. Not in accordance with US GAAP, net profit attributable to shareholders of NetEase in the fourth quarter of 1.9 billion yuan (about 288.8 million US dollars).

- NetEase fourth quarter diluted earnings per ADS of 1.49 US dollars; not in accordance with GAAP, diluted fourth-quarter earnings per ADS was 2.18 US dollars.

Ding Lei, chief executive officer and director of Netease, said: "In 2017, the Company's various business segments developed steadily with annual net revenue up 41.7% YoY. We've launched a number of popular games for players around the world, expanding the e-commerce business on a large scale and continuing to advance the development of advertising services, email and other businesses. In the fourth quarter of 2017, our net revenue showed a year-on-year and double-growth. Several individual hand games such as "Onmyouji" and "Ghost Story" Mobile version of the performance despite the decline, but in the near future to launch content updates and other activities, the players enthusiasm is high. In the fourth quarter, we launched a number of promotional activities for the newly launched Tactical Tour "Wilderness Action", "Terminator 2: Judgment Day" and "Rules of Survival." At the same time, we have also devoted more resources to supporting the growth of e-commerce businesses. We believe that such strategic investment will provide continuous momentum for our long-term development. & rdquo;

Ding also said, "Our performance, as always, outstanding performance. In 2018, we will continue to enrich our product line to bring more premium self-developed games to players. In addition, we are also trying to cooperate with other excellent companies to bring more hand-travel and travel to the international market. Meanwhile, Netease's e-commerce and advertising businesses are also continuing to thrive. In 2017, e-commerce business accounted for about 22% of net revenue. In 2018, we will seize the opportunity to continue to develop various business segments including NetEase koala sea purchases and Netease strict selection, provide first-class Internet content and services and repay shareholders and users. & rdquo;

Fourth Quarter Results Analysis:

Net revenue

NetEase fourth quarter net revenues of 14.676 billion yuan (about 22.452 billion US dollars), higher than the previous quarter's 12.4778 billion US dollars, higher than the same period last year of 12.090 billion yuan.

Netease fourth quarter online game net revenues of 8.0444 billion yuan (about 1,230,200,000 US dollars), lower than the previous quarter's 81.117 billion yuan, lower than the same period last year's 89.591 billion yuan. Handset revenue in the fourth quarter accounted for 68.0% of NetEase's net revenue, down from 68.3% in the previous quarter and 64.4% over the same period of previous year.

NetEase fourth quarter advertising services net revenue of 736,600,000 yuan (about 113,200,000 U.S. dollars), higher than the previous quarter's 631,400,000 yuan, higher than the same period last year, 66,488,000,000 yuan. The best performing advertising revenue in Q4 were: Automotive, Internet Services and Real Estate.

NetEase fourth quarter e-commerce business net revenue of 4.6537 billion yuan (about 7,153,000,000 U.S. dollars), higher than the previous quarter's 2.6675 billion yuan, higher than the same period last year of 1.6912 billion yuan.

Netease's net revenues from e-mail and other businesses for the fourth quarter of 2012 were RMB1,213.0 billion (about US $ 186.4 million), higher than the 1.0672 billion yuan in the previous quarter and 788.3 million yuan higher than the same period of last year.

Gross profit

NetEase fourth quarter gross profit of 5,744.6 million yuan (about 882.9 million US dollars), the previous quarter and the same period of last year were 5,947,600,000,000 yuan and 6,463,300,000 yuan.

NetEase's fourth quarter net gaming services gross profit year-on-year decline and the ring is mainly due to self-study hand travel such as "Onmyouji" revenue contribution decline.

Netease fourth quarter, e-commerce gross profit year-on-year and the chain-based growth mainly benefited from Netease Koala Hai Net acquisition and the rapid development of NetEase.

NetEase's fourth quarter gross margin increased YoY and MoM mainly due to the progress of its commercialization and economies of scale.

The year-on-year and quarter-on-quarter decreases in gross profit of E-mail and other businesses were mainly due to the decrease of some NetEase's platform business revenue with relatively high gross profit margin and the one-off recognition of copyright expenses during the quarter.

Gross profit margin

Netease fourth quarter online game service gross margin was 61.4% in the previous quarter and the same period last year were 62.5% and 60.7%. The year-over-year increase in the gross profit margin of online game services was mainly offset by the one-off recognition of agency game royalty fees in the fourth quarter of 2016, partially offset by the increase in staff costs. The sequential decrease in the gross profit margin of online game services was mainly due to the increase in staff costs.

Netease fourth quarter e-commerce business gross margin was 7.4% in the previous quarter and the same period last year were 11.5% and 12.5%. The year-over-year and quarter-on-quarter decreases in the gross profit margin of the e-commerce providers were mainly due to major promotions and discounts on e-commerce business in the fourth quarter, such as "double eleven" and so on.

Netease fourth quarter advertising gross margin was 71.2% in the previous quarter and the same period last year were 68.0% and 66.5%. The year-on-year and quarter-on-quarter increases in the gross profit margin of advertising business were mainly due to the progress of commercialization and the enhancement of economies of scale.

NetEase e-mail and other business in the fourth quarter gross loss was 3.3% in the previous quarter and the same period last year were gross margin of 13.1% and 46.9%. The year-on-year and quarter-on-quarter decreases in the gross profit margin of mailboxes and other businesses were mainly due to the decrease in certain platform businesses of NetEase with relatively higher gross profit margins and the one-off recognition of copyright fees during the quarter.

Operating expenses

NetEase's total operating expenses for the fourth quarter of 4.1778 billion yuan (about 663.6 million US dollars), higher than the previous quarter's 3.3979 billion yuan, higher than the same period last year of 2.59666 billion yuan. The year-on-year and sequential growth of operating expenses was mainly due to the increase in sales and marketing expenses, R & D expenditures and staff costs, as well as the increase in operating costs of the e-commerce business. In the fourth quarter of 2017, the freight and overhead charges for sales and marketing expenses amounted to RMB393 million (about US $ 60.45 million), as compared to RMB295 million and RMB177 million respectively in the previous quarter and the same period of last year.

Income tax

NetEase fourth quarter income tax expense of 290 million yuan (about 44.6 million US dollars), the previous quarter and the same period last year were 225 million yuan and 882 million yuan. NetEase effective tax rate of 18.2% in the fourth quarter, the previous quarter and the same period last year were 8.1% and 19.2%. The year-on-year and quarter-on-quarter changes in effective tax rates were mainly attributable to the recognition of some subsidiaries under the Group as key software enterprises in the third quarter and the fourth quarter of 2017 and a preferential tax rate of 10% in 2016. NetEase in the third quarter of 2017 and the fourth quarter confirmed the relevant tax rebate.

Net profit after tax

Fourth quarter net profit attributable to shareholders of Netease 1.3 billion yuan (about 19.76 billion US dollars), representing a decline of 65.1% from 3.7 billion yuan a year earlier, lower than the previous quarter's 2.5 billion yuan. Not in accordance with GAAP, net profit attributable to shareholders of Netease in the fourth quarter of 1.9 billion yuan (about 288.8 million US dollars), lower than the previous quarter's 3.0 billion yuan, lower than the same period last year of 4 billion yuan .

In the fourth quarter of 2017, the company recorded a net exchange loss of 159 million yuan (US $ 24.5 million), a net exchange loss of 109.9 million yuan and a net exchange gain of 90.5 million yuan in the previous quarter and the same period of last year. The net exchange gain or loss was mainly due to the translation of the Company's USD bank deposits and loan balances with the exchange rate fluctuations of the United States dollar to Renminbi.

NetEase fourth quarter diluted earnings per ADS 1.49 US dollars, lower than the previous quarter's 2.93 US dollars, lower than the same period last year's 4.28 US dollars. Not in accordance with GAAP, NetEase fourth quarter diluted earnings per ADS of 2.18 US dollars, lower than the previous quarter's 3.50 US dollars, lower than the same period last year's 4.59 US dollars.

2017 results analysis:

Net revenue

NetEase's net revenue in 2017 was 54.1 billion yuan (about 8.3 billion U.S. dollars), up from 382 billion yuan in the previous year.

NetEase's net revenue for online games in 2017 was 36.3 billion yuan (about 5.6 billion U.S. dollars), up from 28 billion yuan in the same period of last year. NetEase mobile game revenue in 2017 accounted for 70.8% of net revenue of online games, up from 61.9% of the same period of last year.

NetEase's advertising services net revenue in 2017 was 2.4 billion yuan (about 57.5 billion U.S. dollars), up from 2.2 billion yuan in the same period of last year. The best performing advertisers in 2017 are: Automotive, Internet Services and Real Estate.

NetEase posted a net revenue of 11.7 billion yuan (US $ 1.8 billion) in 2017, up from RMB4.5 billion in the same period of last year.

NetEase's net revenue for e-mail and other businesses in 2017 was 3.7 billion yuan (about 57.5 billion U.S. dollars), up from 3.5 billion yuan in the same period of previous year.

Gross profit

NetEase's gross profit for 2017 was 25.9 billion yuan (about 4 billion U.S. dollars), up from RMB 21.7 billion the previous year.

Operating expenses

NetEase's total operating expenses for 2017 was RMB13.8 billion (about US $ 2.1 billion), up from RMB9.0 billion the previous year. Net profit YoY growth of total operating expenses in 2017 was mainly due to the increase in sales and marketing expenses, R & D expenses and staff costs, and the increase in operating costs of the e-commerce business.

Net profit

Net profit attributable to shareholders of Netease in 2017 was RMB10.7 billion (equivalent to approximately USD1.6 billion), lower than the previous year's revenue of RMB11.6 billion. Not in accordance with GAAP, Net profit attributable to shareholders of Netease in 2017 was RMB12.7 billion (equivalent to approximately USD2 billion), down from RMB12.9 billion of the previous year.

NetEase diluted earnings per American Depositary Receipts for 2017 was $ 12.41, down from $ 13.48 a year earlier. Not in accordance with GAAP, NetEase diluted earnings per American Depositary Receipts for 2017 was $ 14.73, down from $ 14.94 a year earlier.

Quarterly dividends

The Netease board of directors has authorized a payout of US $ 0.38 per ADS for the fourth quarter. The dividend's equity registration date is February 23, 2018, and the dividend date is March 2, 2018. According to the quarterly dividend policy announced by Netease on May 13, 204, the quarterly dividend is equal to approximately 25% of the company's net profit after tax each fiscal year.

Other Information

As of December 31, 2017, Netease held cash and cash equivalents, time deposits and short-term investments totaling RMB43.2 billion (about US $ 6.6 billion), as of December 31, 2016, of RMB36,933 million. NetEase net cash inflow from operating activities for the fourth quarter of 2017 was approximately RMB11.9 billion (approximately US $ 1.8 billion), compared with RMB15.5 billion in the previous quarter.

Stock repurchase

On November 15, 2016, Netease's Board of Directors approved the company to repurchase up to US $ 1 billion of circulating ADSs in no more than 12 months. As of November 14, 2017, when the project expired, NetEase repurchased about 1.1 million ADRs, costing about 306.1 million U.S. dollars.

On November 15, 2017, the Netease Board of Directors once again approved the company's repurchase of up to US $ 1 billion of circulating ADSs in no more than 12 months. As of December 31, 2017, Netease has not yet made a share buyback.

Stock performance

NetEase shares fell $ 4.84, or 1.54%, in regular trading on the Nasdaq on Wednesday, to close at 309.00 U.S. dollars. At press time, NetEase shares fell $ 16.00 in after-hours trading, a decrease of 5.18%, the stock price of 293.00 US dollars. In the past 52 weeks, NetEase lowest price of 252.55 US dollars, the highest share price of 377.64 US dollars. According to Wednesday's closing price calculation, Netease market value of about 405.59 billion US dollars. (Compile / Ming Xuan)


Financial report graphic

First, revenue growth continued to decline

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508435-742133725.jpg

NetEase fourth quarter net revenues of 14.676 billion yuan (about 22.452 billion US dollars), higher than the previous quarter's 12.4778 billion US dollars, higher than the same period last year of 12.090 billion yuan.

In the four quarters of 2017, NetEase net revenue grew 72%, 49%, 36% and 21% respectively, showing a continuous decline.

Second, online game revenue fell

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508420-1415606848.jpg

Netease fourth quarter online game net revenues of 8.0444 billion yuan (about 1,230,200,000 US dollars), lower than the previous quarter's 81.117 billion yuan, lower than the same period last year's 89.591 billion yuan. Handset revenue in the fourth quarter accounted for 68.0% of NetEase's net revenue, down from 68.3% in the previous quarter and 64.4% over the same period of previous year.

Third, advertising services revenue growth steady

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508420-446589216.jpg

NetEase fourth quarter advertising services net revenue of 736,600,000 yuan (about 113,200,000 U.S. dollars), higher than the previous quarter's 631,400,000 yuan, higher than the same period last year, 66,488,000,000 yuan. The best performing advertising revenue in Q4 were: Automotive, Internet Services and Real Estate.

In the four quarters of 2017, NetEase's advertising revenue grew at a steady year-on-year rate of 13%, 12%, 12% and 11% respectively.

Fourth, e-mail, e-commerce and other business revenue growth

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508466-1167369662.jpg

NetEase fourth quarter e-commerce business net revenue of 4.6537 billion yuan (about 7,153,000,000 U.S. dollars), higher than the previous quarter's 2.6675 billion yuan, higher than the same period last year of 1.6912 billion yuan.

Netease's net revenues from e-mail and other businesses for the fourth quarter of 2012 were RMB1,213.0 billion (about US $ 186.4 million), higher than the 1.0672 billion yuan in the previous quarter and 788.3 million yuan higher than the same period of last year.

Revenue from Netease's mailbox, e-commerce and other businesses continued to grow rapidly in the four quarters of 2017, reaching 63%, 69%, 80% and 153% respectively.

Fifth, operating expenses continued to grow

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508451-1897463666.jpg

NetEase's total operating expenses for the fourth quarter of 4.1778 billion yuan (about 663.6 million US dollars), higher than the previous quarter's 3.3979 billion yuan, higher than the same period last year of 2.59666 billion yuan. The year-on-year and sequential growth of operating expenses was mainly due to the increase in sales and marketing expenses, R & D expenditures and staff costs, as well as the increase in operating costs of the e-commerce business. In the fourth quarter of 2017, the freight and overhead charges for sales and marketing expenses amounted to RMB393 million (about US $ 60.45 million), as compared to RMB295 million and RMB177 million respectively in the previous quarter and the same period of last year.

Six, net profit continued to decline

orgsrc=//images2017.cnblogs.com/news/66372/201802/66372-20180208130508451-916531854.jpg

Fourth quarter net profit attributable to shareholders of Netease 1.3 billion yuan (about 19.76 billion US dollars), representing a decline of 65.1% from 3.7 billion yuan a year earlier, lower than the previous quarter's 2.5 billion yuan. In the fourth quarter of 2017, Netease recorded a net exchange loss of 159 million yuan (US $ 24.5 million), a net exchange loss of 109.9 million yuan and a net exchange gain of 90.5 million yuan in the previous quarter and the same period of last year.

NetEase fourth quarter diluted earnings per ADS 1.49 US dollars, lower than the previous quarter's 2.93 US dollars, lower than the same period last year's 4.28 US dollars.

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