NetEase, Inc 6-K, filed Aug 18, 2022

NetEase, Inc. (NTES)

6-K 2022-08-18 For: 2022-08-18

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Added on April 02, 2026

About this 6-K

NetEase, Inc filed this 6-K on August 18, 2022.

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		NETEASE, INC.

		By:	/s/ Charles Zhaoxuan Yang
		Name:	Charles Zhaoxuan Yang
		Title:	Chief Financial Officer

Date:	August 18, 2022

	December 31,		June 30,		June 30,
	2021		2022		2022
		RMB		RMB		USD (Note 1)
Assets
Current assets:
Cash and cash equivalents		14,498,157		16,461,908		2,457,698
Time deposits		70,754,846		84,916,751		12,677,737
Restricted cash		2,876,628		3,089,413		461,237
Accounts receivable, net		5,507,988		5,213,151		778,303
Inventories		964,733		843,767		125,971
Prepayments and other current assets, net		6,235,857		7,317,644		1,092,495
Short-term investments		12,281,548		10,166,531		1,517,823
Assets held for sale		497		-		-
Total current assets		113,120,254		128,009,165		19,111,264

Non-current assets:
Property, equipment and software, net		5,433,858		6,022,365		899,115
Land use right, net		4,108,090		4,156,674		620,575
Deferred tax assets		1,297,954		1,254,640		187,313
Time deposits		5,823,840		4,473,840		667,927
Restricted cash		1,330		1,129		169
Other long-term assets, net		23,857,510		24,261,773		3,622,187
Assets held for sale		1,088		-		-
Total non-current assets		40,523,670		40,170,421		5,997,286
Total assets		153,643,924		168,179,586		25,108,550

Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity
Current liabilities:
Accounts payable		985,059		942,070		140,647
Salary and welfare payables		4,133,254		3,211,330		479,439
Taxes payable		4,537,050		3,260,873		486,835
Short-term loans		19,352,313		28,027,125		4,184,340
Contract liabilities		12,132,743		12,316,763		1,838,844
Accrued liabilities and other payables		9,360,907		9,686,526		1,446,160
Total current liabilities		50,501,326		57,444,687		8,576,265

Non-current liabilities:
Deferred tax liabilities		1,345,874		1,448,250		216,218
Long-term loans		1,275,140		3,355,700		500,993
Other long-term payable		1,097,708		1,023,880		152,861
Total non-current liabilities		3,718,722		5,827,830		870,072
Total liabilities		54,220,048		63,272,517		9,446,337

Redeemable noncontrolling interests		145,238		142,579		21,286

NetEase, Inc.’s shareholders’ equity		95,328,080		100,830,817		15,053,645
Noncontrolling interests		3,950,558		3,933,673		587,282
Total shareholders’ equity		99,278,638		104,764,490		15,640,927

Total liabilities, redeemable noncontrolling interests and shareholders’ equity		153,643,924		168,179,586		25,108,550

	Three Months Ended								Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
	2021		2022		2022		2022		2021		2022		2022
	RMB		RMB		RMB		USD (Note 1)		RMB		RMB		USD (Note 1)
Net revenues	20,524,501		23,555,842		23,159,078		3,457,559		41,041,712		46,714,920		6,974,354
Cost of revenues	(9,334,887	)	(10,719,463	)	(10,217,587	)	(1,525,446	)	(18,799,459	)	(20,937,050	)	(3,125,819	)
Gross profit	11,189,614		12,836,379		12,941,491		1,932,113		22,242,253		25,777,870		3,848,535

Operating expenses:
Selling and marketing expenses	(3,013,447	)	(2,915,489	)	(3,300,705	)	(492,782	)	(5,780,129	)	(6,216,194	)	(928,053	)
General and administrative expenses	(1,011,183	)	(1,015,769	)	(1,112,755	)	(166,130	)	(1,961,377	)	(2,128,524	)	(317,780	)
Research and development expenses	(3,406,859	)	(3,398,082	)	(3,581,700	)	(534,734	)	(6,467,048	)	(6,979,782	)	(1,042,054	)
Total operating expenses	(7,431,489	)	(7,329,340	)	(7,995,160	)	(1,193,646	)	(14,208,554	)	(15,324,500	)	(2,287,887	)
Operating profit	3,758,125		5,507,039		4,946,331		738,467		8,033,699		10,453,370		1,560,648

Other income/ (expenses):
Investment income/ (loss), net	889,392		(548,702	)	(707,489	)	(105,625	)	1,584,690		(1,256,191	)	(187,544	)
Interest income, net	386,207		458,244		505,991		75,542		775,135		964,235		143,956
Exchange (losses)/gains, net	(591,720	)	(97,880	)	865,283		129,183		(312,401	)	767,403		114,570
Other, net	147,588		216,330		121,175		18,091		295,555		337,505		50,388
Income before tax	4,589,592		5,535,031		5,731,291		855,658		10,376,678		11,266,322		1,682,018
Income tax	(1,113,228	)	(1,219,271	)	(1,259,320	)	(188,012	)	(2,386,636	)	(2,478,591	)	(370,044	)

Net income from continuing operations	3,476,364		4,315,760		4,471,971		667,646		7,990,042		8,787,731		1,311,974
Net income from discontinued operations	-		-		624,864		93,290		-		624,864		93,290
Net income	3,476,364		4,315,760		5,096,835		760,936		7,990,042		9,412,595		1,405,264

Accretion of redeemable noncontrolling interests	(145,415	)	(733	)	(754	)	(113	)	(289,242	)	(1,487	)	(222	)
Net loss attributable to noncontrolling interests	210,805		78,996		195,395		29,172		280,106		274,391		40,965
Net income attributable to the Company’s shareholders	3,541,754		4,394,023		5,291,476		789,995		7,980,906		9,685,499		1,446,007
Including:
-Net income from continuing operations attributable to the Company’s shareholders	3,541,754		4,394,023		4,666,612		696,705		7,980,906		9,060,635		1,352,717
-Net income from discontinued operations attributable to the Company’s shareholders	-		-		624,864		93,290		-		624,864		93,290

Basic net income per share *	1.06		1.34		1.62		0.24		2.38		2.96		0.44
-Continuing operations	1.06		1.34		1.43		0.21		2.38		2.77		0.41
-Discontinued operations	-		-		0.19		0.03		-		0.19		0.03

Basic net income per ADS *	5.29		6.70		8.08		1.21		11.92		14.78		2.21
-Continuing operations	5.29		6.70		7.13		1.07		11.92		13.83		2.07
-Discontinued operations	-		-		0.95		0.14		-		0.95		0.14

Diluted net income per share *	1.05		1.33		1.60		0.24		2.35		2.93		0.44
-Continuing operations	1.05		1.33		1.41		0.21		2.35		2.74		0.41
-Discontinued operations	-		-		0.19		0.03		-		0.19		0.03

Diluted net income per ADS *	5.23		6.63		8.00		1.19		11.76		14.63		2.18
-Continuing operations	5.23		6.63		7.05		1.05		11.76		13.69		2.04
-Discontinued operations	-		-		0.95		0.14		-		0.94		0.14

Weighted average number of ordinary shares used in calculating net income per share *
Basic	3,347,507		3,277,280		3,274,695		3,274,695		3,348,567		3,275,980		3,275,980
Diluted	3,385,953		3,316,129		3,305,504		3,305,504		3,392,961		3,310,809		3,310,809

	Three Months Ended												Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2021			2022			2022			2022			2021			2022			2022
	RMB			RMB			RMB			USD (Note 1)			RMB			RMB			USD (Note 1)
Cash flows from operating activities:
Net income		3,476,364			4,315,760			5,096,835			760,936			7,990,042			9,412,595			1,405,264
Net income from discontinued operations		-			-			(624,864	)		(93,290	)		-			(624,864	)		(93,290	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		814,370			766,180			609,036			90,927			1,634,200			1,375,216			205,314
Fair value changes of equity security investments		(203,720	)		1,541,002			735,159			109,756			(681,317	)		2,276,161			339,822
Impairment losses of investments and other long-term assets		4,797			5,000			243,085			36,292			4,797			248,085			37,038
Fair value changes of short-term investments		(170,676	)		(79,776	)		(119,882	)		(17,898	)		(288,680	)		(199,658	)		(29,808	)
Share-based compensation cost		700,114			746,154			764,447			114,129			1,350,367			1,510,601			225,527
Allowance for/ (reversal of) expected credit losses		27,384			(313	)		10,965			1,637			40,988			10,652			1,590
Losses on disposal of property, equipment and software		1,424			1,445			481			72			1,265			1,926			288
Unrealized exchange losses/(gains)		572,708			98,034			(890,066	)		(132,883	)		298,661			(792,032	)		(118,247	)
Gains on disposal of long-term investments, business and subsidiaries		(166,505	)		(4,000	)		-			-			(173,828	)		(4,000	)		(597	)
Deferred income taxes		202,894			315,228			(169,539	)		(25,312	)		530,969			145,689			21,751
Share of results on equity method investees and revaluation results from previously held equity interest		(342,760	)		(911,498	)		(134,569	)		(20,091	)		(394,652	)		(1,046,067	)		(156,174	)
Changes in operating assets and liabilities:
Accounts receivable		573,111			212,075			82,282			12,284			88,768			294,357			43,946
Inventories		(9,608	)		103,591			17,791			2,656			(263,103	)		121,382			18,122
Prepayments and other assets		593,379			(569,843	)		(163,612	)		(24,426	)		(191,845	)		(733,455	)		(109,502	)
Accounts payable		(178,097	)		(92,373	)		48,452			7,234			(238,751	)		(43,921	)		(6,557	)
Salary and welfare payables		856,775			(1,756,224	)		782,789			116,867			(369,380	)		(973,435	)		(145,330	)
Taxes payable		(1,397,390	)		73,446			(538,234	)		(80,355	)		161,228			(464,788	)		(69,391	)
Contract liabilities		(381,446	)		(78,200	)		279,669			41,754			359,492			201,469			30,078
Accrued liabilities and other payables		(250,312	)		(103,136	)		600,934			89,717			406,252			497,798			74,319
Net cash provided by operating activities		4,722,806			4,582,552			6,631,159			990,006			10,265,473			11,213,711			1,674,163

Cash flows from investing activities:
Purchase of property, equipment and software		(421,872	)		(749,361	)		(445,054	)		(66,445	)		(751,618	)		(1,194,415	)		(178,321	)
Proceeds from sale of property, equipment and software		2,458			12,565			23,338			3,484			3,977			35,903			5,360
Purchase of intangible assets, content and licensed copyrights		(566,736	)		(143,836	)		(85,121	)		(12,708	)		(992,869	)		(228,957	)		(34,182	)
Net change in short-term investments with terms of three months or less		1,668,673			1,710,845			(159,173	)		(23,764	)		5,001,283			1,551,672			231,659
Purchase of short-term investments with terms over three months		(2,450,000	)		(1,250,000	)		-			-			(10,355,000	)		(1,250,000	)		(186,620	)
Proceeds from maturities of short-term investments with terms over three months		813,211			553,831			1,459,172			217,849			3,670,552			2,013,003			300,533
Investment in long-term investments and acquisition of subsidiaries		(3,376,973	)		(1,690,271	)		(899,968	)		(134,362	)		(3,935,414	)		(2,590,239	)		(386,713	)
Proceeds from disposal of long-term investments, businesses and subsidiaries		266,284			34,237			6,413			957			465,184			40,650			6,069
Placement/rollover of matured time deposits		(27,223,584	)		(24,045,997	)		(33,122,029	)		(4,944,989	)		(42,946,333	)		(57,168,026	)		(8,534,962	)
Proceeds from maturities of time deposits		25,790,186			14,699,795			32,100,141			4,792,425			37,271,321			46,799,936			6,987,046
Change in other long-term assets		(44,877	)		(169,545	)		(60,900	)		(9,092	)		(99,530	)		(230,445	)		(34,405	)
Net cash used in investing activities		(5,543,230	)		(11,037,737	)		(1,183,181	)		(176,645	)		(12,668,447	)		(12,220,918	)		(1,824,536	)

	Three Months Ended												Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2021			2022			2022			2022			2021			2022			2022
	RMB			RMB			RMB			USD (Note 1)			RMB			RMB			USD (Note 1)
Cash flows from financing activities:
Net changes in bank loans with terms of three months or less		4,978,642			3,403,195			2,721,487			406,307			7,100,683			6,124,682			914,391
Proceed of bank loans with terms over three months		1,320,614			1,915,210			1,641,708			245,101			1,557,530			3,556,918			531,034
Payment of bank loans with terms over three months		(582,328	)		-			(32,273	)		(4,818	)		(750,028	)		(32,273	)		(4,818	)
Amounts paid for NetEase’s issuance of shares in Hong Kong		-			-			-			-			(13,800	)		-			-
Net Amounts received/ (paid) related to capital contribution from or repurchase of noncontrolling interests and redeemable noncontrolling interests shareholders		8,176			(102,042	)		33,200			4,957			1,515,225			(68,842	)		(10,278	)
Cash paid for repurchase of NetEase’s ADSs/ purchase of subsidiaries’ ADSs and shares		(2,468,969	)		(1,243,917	)		(2,119,613	)		(316,450	)		(4,487,436	)		(3,363,530	)		(502,162	)
Dividends paid to NetEase’s shareholders		(1,278,879	)		(1,683,472	)		(1,403,637	)		(209,557	)		(1,539,721	)		(3,087,109	)		(460,893	)
Net cash provided by financing activities		1,977,256			2,288,974			840,872			125,540			3,382,453			3,129,846			467,274

Effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies		(25,112	)		(21,202	)		74,898			11,182			10,881			53,696			8,017
Net increase/ (decrease) in cash, cash equivalents and restricted cash		1,131,720			(4,187,413	)		6,363,748			950,083			990,360			2,176,335			324,918
Cash, cash equivalents and restricted cash, at the beginning of the period		12,027,245			17,376,115			13,188,702			1,969,021			12,168,605			17,376,115			2,594,186
Cash, cash equivalents and restricted cash, at end of the period		13,158,965			13,188,702			19,552,450			2,919,104			13,158,965			19,552,450			2,919,104

Supplemental disclosures of cash flow information:
Cash paid for income tax, net		1,240,692			1,515,330			1,055,096			157,522			1,790,883			2,570,426			383,754
Cash paid for interest expense		48,082			37,741			93,079			13,896			91,984			130,820			19,531

	Three Months Ended												Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2021			2022			2022			2022			2021			2022			2022
	RMB			RMB			RMB			USD (Note 1)			RMB			RMB			USD (Note 1)
Net revenues:
Games and related value-added services		15,774,818			18,641,814			18,139,843			2,708,207			31,881,629			36,781,657			5,491,357
Youdao		1,293,407			1,200,541			956,225			142,761			2,633,274			2,156,766			321,997
Cloud Music		1,692,507			2,067,206			2,191,510			327,184			3,183,674			4,258,716			635,810
Innovative businesses and others		1,763,769			1,646,281			1,871,500			279,407			3,343,135			3,517,781			525,190
Total net revenues		20,524,501			23,555,842			23,159,078			3,457,559			41,041,712			46,714,920			6,974,354

Cost of revenues:
Games and related value-added services		(5,813,002	)		(7,052,050	)		(6,375,598	)		(951,852	)		(12,026,054	)		(13,427,648	)		(2,004,695	)
Youdao		(616,661	)		(562,691	)		(546,498	)		(81,590	)		(1,189,076	)		(1,109,189	)		(165,598	)
Cloud Music		(1,623,327	)		(1,815,649	)		(1,905,954	)		(284,551	)		(3,161,053	)		(3,721,603	)		(555,621	)
Innovative businesses and others		(1,281,897	)		(1,289,073	)		(1,389,537	)		(207,453	)		(2,423,276	)		(2,678,610	)		(399,905	)
Total cost of revenues		(9,334,887	)		(10,719,463	)		(10,217,587	)		(1,525,446	)		(18,799,459	)		(20,937,050	)		(3,125,819	)

Gross profit:
Games and related value-added services		9,961,816			11,589,764			11,764,245			1,756,355			19,855,575			23,354,009			3,486,662
Youdao		676,746			637,850			409,727			61,171			1,444,198			1,047,577			156,399
Cloud Music		69,180			251,557			285,556			42,633			22,621			537,113			80,189
Innovative businesses and others		481,872			357,208			481,963			71,954			919,859			839,171			125,285
Total gross profit		11,189,614			12,836,379			12,941,491			1,932,113			22,242,253			25,777,870			3,848,535

Gross profit margin:
Games and related value-added services		63.2	%		62.2	%		64.9	%		64.9	%		62.3	%		63.5	%		63.5	%
Youdao		52.3	%		53.1	%		42.8	%		42.8	%		54.8	%		48.6	%		48.6	%
Cloud Music		4.1	%		12.2	%		13.0	%		13.0	%		0.7	%		12.6	%		12.6	%
Innovative businesses and others		27.3	%		21.7	%		25.8	%		25.8	%		27.5	%		23.9	%		23.9	%