Largest Daily Loss Since December
- NetEase shares experience a significant drop due to profit miss and softness in PC games
- Largest daily percentage loss since December
- 18% drop in net profit and 13% decline in adjusted net profit for Q2
- 6.7% increase in sales from games and related services
- PC game revenue remains flat
- Adjustments to ‘Fantasy Westward Journey’ impacting performance
- Strong performance of ‘Naraka: Bladepoint’ offsetting some losses
- Concerns about mobile-game performance in H2
- Overall gaming performance remains intact with new titles in the pipeline
NetEase shares plunged after reporting an 18% drop in net profit and a 13% decline in adjusted net profit for the second quarter, missing market expectations. The Chinese gaming giant’s Hong Kong-listed shares fell by 13%, with its American depositary receipts sinking 11%. Despite a flat PC game revenue and adjustments to ‘Fantasy Westward Journey’, strong performance of ‘Naraka: Bladepoint’ helped offset some losses. However, concerns about mobile-game performance in the second half of the year persist. The company plans to launch the highly anticipated title ‘Where Winds Meet’ later this year.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about NetEase’s financial performance and the reasons behind the stock selloff, including specific details on their game titles and market reactions. It also includes quotes from analysts to provide different perspectives on the situation.
Noise Level: 4
Noise Justification: The article provides relevant information about NetEase’s financial performance and the factors affecting it, such as changes in their games and market reactions. However, it could benefit from more analysis or context on the broader implications of these events for the gaming industry and the company’s future prospects.
Public Companies: NetEase (NTES)
Key People: Bill Pang (Vice President), Sherry Qin (Writer)
Financial Relevance: Yes
Financial Markets Impacted: NetEase’s stock price and the Chinese videogame market
Financial Rating Justification: The article discusses NetEase’s financial performance, specifically its second-quarter results and their impact on the company’s stock price. This has a direct effect on financial markets as it causes a selloff in shares of the Chinese videogame giant, NetEase, which impacts the company and potentially other companies within the same industry.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
Move Size: The market move size mentioned in the article is a 13% decrease in NetEase’s Hong Kong-listed shares and an 11% decrease in its American depositary receipts.
Sector: Technology
Direction: Down
Magnitude: Large
Affected Instruments: Stocks
www.wsj.com 
