Momentum Stock Watch: NetEase, Inc. (NTES)

Company Profile:

NetEase, Inc. (NetEase) operates an interactive online community in the People’s Republic of China. The company operates through Online Game Services; Advertising Services; and E-mail, E-commerce and Others segments. It offers PC-client massively multi-player online role-playing games and mobile games; and distributes its point cards to gamers. The company’s NetEase Websites provide Chinese Internet users a network of Chinese language-based online content channels, as well as community and communication services, including news content, community forums, mobile-based applications, open courses, and interactive online video. It also offers other Web-based applications and services, including a Web directory. In addition, NetEase, Inc. provides online advertising services. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is based in Beijing, the People’s Republic of China.

Recent News:

The company will report financial results for the fourth quarter and 2017 fiscal year on Wednesday, February 7, 2018, after the close of the U.S. markets.

For the third quarter ended September 30, 2017, the company reported net revenues were RMB12.5 billion (US$1.9 billion), an increase of 35.5% compared with the third quarter of 2016. Net income attributable to the Company’s shareholders was RMB2.5 billion (US$379.9 million).

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

NTES’s strengths can be seen in its strong growth, robust profitability and great efficiency compared with its peers. Its revenue and net income have increased over recent several years. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator and RSI stands at 46.06 with positive bias. We rate NetEase, Inc. (NTES) a STRONG BUY.