Hong Kong · HKEX · 09999
NetEase (09999) stock analysis: valuation and financials
软件服务
HK$195.50 -1.8% Price as of Oct 13, 2026
High-quality, net-cash games franchise: FY2025 revenue CNY112.6B, 64.3% gross margin, FCF margin 42.9%, net cash CNY162.8B, 16.5x PE; mid-single-digit growth caps the rating.
- Market cap
- HK$625.9B
- P/E
- 16.5x
- EV/Sales
- 3.2x
- FCF yield
- 9.3%
- Dividend yield
- 2.3%
- 52-week range
- HK$170.50 – HK$240.20
Research as of Oct 14, 2026
Business quality scorecard
- Growth38
- Profitability95
- Cash flow100
- Balance sheet100
- Capital allocation94
- Innovation41
- Valuation96
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Free-to-play players worldwide pay for in-game virtual items, making games the profit engine behind FY2025 revenue of CNY 112.6B and a 31.8% operating margin; Youdao, Cloud Music and Yanxuan are smaller adjacent streams.
Financials by year
| FY2021Jan–Dec 2021 | FY2022Jan–Dec 2022 | FY2023Jan–Dec 2023 | FY2024Jan–Dec 2024 | FY2025Jan–Dec 2025 | |
|---|---|---|---|---|---|
| Revenue | ¥87.6B | ¥96.5B | ¥103.5B | ¥105.3B | ¥112.6B |
| Revenue growth | +18.9% | +10.1% | +7.2% | +1.8% | +7.0% |
| Gross margin | 53.6% | 54.7% | 60.9% | 62.5% | 64.3% |
| Operating margin | 18.7% | 20.3% | 26.8% | 28.1% | 31.8% |
| Net income | ¥16.9B | ¥20.3B | ¥29.4B | ¥29.7B | ¥33.8B |
| Free cash flow | ¥21.8B | ¥25.1B | ¥31.1B | ¥37.5B | ¥48.7B |
| FCF margin | 24.9% | 26.0% | 30.0% | 35.6% | 43.2% |
Amounts in CNY · What is free cash flow?
Margins Gross margin rose to 64.3% in FY2025 from 62.5% FY2024 (+1.8pp) and 67.2% on TTM; operating margin 31.8% vs 28.1% (+3.7pp), 35.2% TTM. Latest two quarters are the high-water mark (Q1 FY2026 gross 69.4%, Q2 FY2026 70.5%); the driver is revenue mix plus flat fixed cost, not disclosed segment detail.
- Cash flow HealthyOCF exceeds net income: FY2025 OCF 50.7B CNY vs net income 33.8B CNY, cash conversion 1.354x; TTM OCF 51.5B CNY vs 32.5B CNY.
- Debt LowNet cash of 162.8B CNY at FY2025 (cash 47.2B plus 115.4B short-term investments) against total debt of 6.4B CNY; net debt/EBITDA is -3.76x.
Balance sheet Leverage · Net cash
- Cash & short-term investments
- ¥175.4B
- Total debt
- ¥12.6B
- Net cash
- ¥162.8B
- Current ratio
- 3.5x
As of Jun 30, 2026 · Amounts in CNY · How to read a balance sheet
Management and track record
- Management StrongExecution: TTM FCF margin 42.9%, gross margin 67.2% (+1.8pp) and operating margin 35.2% (+3.7pp yoy); ROIC up 6.45 points over three years.
Valuation range
Implied value per share · Price when researched: HK$195.50
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
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