On August 21, NetEase fell 5.63% in regular trading, trading at $120.06/share, with turnover of $155 million.
On the news front, NetEase released its Q2 earnings before the market opened on August 20, delivering mixed results that triggered the sell-off. Revenue came in at 30.1 billion yuan, up 7.9% year-over-year and above the consensus estimate of 29.45 billion yuan. Gaming and related value-added services revenue reached 25 billion yuan, growing 10% year-over-year.
However, profitability sharply missed expectations. Adjusted EPS per ADS was 12.02 yuan, far below the market estimate of 15.59 yuan. Net profit attributable to shareholders fell 18.6% year-over-year to 7 billion yuan. The shortfall was primarily driven by investment losses of approximately 2.95 billion yuan and foreign exchange losses of roughly 440 million yuan, while the effective tax rate rose to 25.5%.
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