on May 15, netease (Nasdaq: NTES) announced today that the company as of March 31, 2014 in the first quarter unaudited financial results. Netease according to data in the first quarter of 2014 total revenue of 2.519 billion yuan, up 11.6% from a year earlier. Net profit of 1.124 billion yuan, up 5.7% from a year earlier.
netease CEO and director, says Mr Ding “actively develop high quality new games, product and service, to meet the growing tradition and the mobile Internet market in China, is the power source for the development of our business. This quarter our revenue reached 2.5 billion yuan, up 11.6% from a year earlier. Both the business income growth, online gaming revenue grew 6.3%, advertising services revenue grew 47.9%, mailboxes, electricity and other business income growth of 81.4%.”
quarter revenue was 2.519 billion yuan, up 11.6% from a year earlier, the advertising business grow 47.9%
in the first quarter of 2014 total revenue of RMB 2.519 billion ($405 million), up 11.6% from a year earlier. Among them, the online game service income of RMB 2.156 billion ($347 million), up 6.3% from a year earlier. Advertising revenue of 245 million yuan ($39.37 million); Year-on-year growth of 47.9%; Mailbox, electricity and other business income is 119 million yuan ($19.09 million), up 81.4% from a year earlier.
netease in the first quarter of 2014 online game service income of RMB 2.156 billion ($347 million), up 6.3% from a year earlier.
Mr Ding said, “in the first quarter, in the face of traditional and new trend of mobile Internet industry appear constantly, we continue to launch new games and expansion. As agents, and since the game user groups growing, we provide users with innovative gameplay, and high quality service, to promote the success in the first quarter performance. In the first quarter, we formally issued free digital strategy card games the hearth myth: warcraft heroes, and in April released versions of the game. The BFS myth: warcraft heroes is highly sought after by the player, the version application stores in China become the popular application of rating and ranking the forefront of the free application. Since our research game also has caught the attention of the user. In the first quarter, we issued the “fantasy westward journey 2”, “new feifei” and “new westward journey 3” of the new expansion, all of the game in the first quarter has stable performance. In a series of promotional activities, the new 2 “a Chinese Odyssey” also performed well this quarter.
“in April, we issued a new” mix wights 2 “the expansion. Netease XinYou strategy in 2014, 3 d Oriental fantasy mmorpgs “day yu” open small limit for the first time in April also delete file test, get the height of the players look forward to working with attention. The next few months, we are planning in view of the existing several popular game launch new expansion, such as “world 3”, “westward journey 3” and “fairy legend”. In addition to the day yu, we expected later this year to launch a first-person shooter “crisis in 2015. In addition, we recently announced is working closely with blizzard entertainment, the introduction of free online in China team game hero “storm.”
“mobile end the roll out of the game, for the steady growth of the online game business has played a supplementary role. Game user for pocket edition of the “fantasy westward journey 2 feedback and adhesion degrees are encouraging. In the first quarter, we also introduced a “mini westward journey”, this is the first paragraph netease card fight hand swim, preliminary feedback from users, the performance more than expected. We will also introduce more new mobile applications and games this year, including some good agent products, make the mobile end products more varied. In addition, the letter has been integrated into the new element, optimize the experience, attract more users to join the instant messaging social platform. We have been testing ask new social function, and will be in the swim easecredit platform is introduced into the social relations, with easecredit account can log in the game directly, and ranking and share with friends and so on, in order to enhance the user experience.”
netease AD service revenue in the first quarter of 2014 to 245 million yuan ($39.37 million), up 47.9% from a year earlier.
Mr Ding said, “in the first quarter, our advertising services rendered good year-on-year growth. Including transportation, food and beverage, fastest-growing financial services. Online portal, integrated mobile terminal applications and email services continue to attract new users, and provides customers with more services. As of March 31, 2014, the E-mail users more than 650 million, 240 million mobile phone news client installation. We have reached a strategic cooperation with Brazil and Spain, reported the forthcoming 2014 World Cup. These high level increase our brand awareness of cooperation, for users and advertisers can create huge attraction.”
netease mail in the first quarter of 2014, electricity and other business income is 119 million yuan ($19.09 million), up 81.4% from a year earlier.
“we email, electricity and other business development momentum is encouraging, especially the lottery with a third party products and insurance products related to electric business revenue in the first quarter growth rapidly.”
Mr Ding concluded, “with optional game more and more, players are increasingly looking for better game experience. This capacity to gamers identification and prediction of the demand, is the cornerstone of our business development. Our games and services and it is consistent and strong growth. In the next year, we will continue to integrate, optimize, and enrich our product. We are exploring more overseas agent and opportunities for development, to further expand our brand, bring more revenue. At the same time, along with the maturity of the mobile game, we will further look for profit, and constantly promote the development of traditional network game. We are pleased to announce the board of directors has approved a new dividend policy, will take effect in the beginning of the year. We are about to issue American depositary receipts of $0.34 per share as cash dividends this quarter.”
sales tax 153 million yuan
in the first quarter of 2014 the sales tax is 153 million yuan ($24.69 million), in the first quarter and the same period last year 163 million yuan and 105 million yuan respectively. Year-on-year growth in sales tax is mainly due to the reform of the tax law in China, since 2013 the company online gaming revenue gradually by pay business tax to pay VAT. VAT increase previously included in the cost of sales is largely offset by group internal revenue of business tax, did not netease online games business gross margin have a significant impact.
gross profit of 1.708 billion yuan, integrated gross margin of 72%
in the first quarter of 2014 gross profit of RMB 1.708 billion ($275 million), in the first quarter and the same period last year 1.727 billion yuan and 1.546 billion yuan respectively. Integrated gross margin was 72%, and the last quarter and 71% and 72% respectively over the same period last year.
online gaming service revenue growth and annulus compared to the main benefit from the hearth myth: heroes of warcraft launched and several since research game revenue growth. Such as “fantasy westward journey 2”, the game in the current quarter introduced a new expansion, and the new 2 “a Chinese Odyssey”, the game held a series of promotional activities.
advertising services is the main reason of the gross margin year-on-year growth, transportation, food and beverage and advertising service demand growth in financial services, as well as the commercialization of the mobile application development. Advertising revenue and gross margin fell mainly because of China’s advertising business seasonal factors.
a mailbox, electricity and other revenue and quarter-on-quarter growth thanks to the rapid development of electrical business, such as lottery tickets with a third party products and insurance products related to electricity service income.
according to the business category, 2014 online games in the first quarter gross margin of 78.5%, the previous quarter and 77.7% and 77.8% respectively over the same period last year.
2014 advertising services in the first quarter gross margin of 47.8%, the previous quarter and 57.8% and 29.0% respectively over the same period last year. Gross margin year-on-year growth is the main reason for the advertisement service demand. Gross margin fell the main reason is that seasonal factors.
in the first quarter of 2014 mailbox, electricity and other business gross margin was 6.7%, the previous quarter and gross loss rate was 4.0% and 4.0% respectively over the same period of last year. Gross margin improvement is mainly due to the relatively high gross profit margin of electricity business income growth.
operating costs 564 million yuan, the operating rate 23.8%
in the first quarter of 2014 operating costs RMB 564 million ($90.67 million), in the first quarter and the same period last year 648 million yuan and 456 million yuan respectively. Operating expenses rose is due to online games and advertising business related marketing costs increase, the number of employees, the average salary increase, as well as r&d spending increases. Operating costs fell is mainly due to the independent research and development to reduce the cost of the game market.
in the first quarter of 2014 operating rate is 23.8%, the previous quarter and 26.8% and 21.2% respectively over the same period last year.
net profit of 1.124 billion yuan, up 5.7% year on year, net profit margin of 47.5%
in the first quarter of 2014 operating profit of 1.144 billion yuan ($184 million), the last quarter and year 1.079 billion yuan and 1.09 billion yuan respectively. Operating margins of 48.4%, the previous quarter and 44.5% and 50.7% respectively over the same period last year.
in the first quarter of 2014 the company income tax expenses of RMB 180 million ($28.89 million), in the first quarter and the same period last year 49.42 million yuan and 143 million yuan respectively. In the first quarter of 2014 the actual rate is 13.8%, the previous quarter and 3.8% and 11.8% respectively over the same period last year. Effective tax rate on the cause of the change is due to the part of the subsidiaries of group in the fourth quarter of 2013 was identified as key software enterprises (from 2013 to 2013), in the fourth quarter of 2013 identified 2013 annual enterprise income tax tax credit, which reduces the effective tax rate.
in the first quarter of 2014 net income of 1.124 billion yuan ($181 million), up 5.7% from a year earlier. Net profit margin was 47.5%, the previous quarter and 51.1% and 49.4% respectively over the same period last year.
in the first quarter of 2014, the company posted a net exchange revenue of RMB 7.12 million ($1.15 million), last quarter and respectively in the same period last year net exchange loss 17.57 million yuan and RMB 9.31 million yuan. Net exchange gains and losses of change is mainly due to the company’s bank deposits and loan balance of foreign currency for dollars into RMB exchange rate fluctuates convert.
in the first quarter of 2014 net profit for the first American depositary receipts of $1.39 per share (basic) and $1.38 (diluted). Last quarter is $1.53 (basic) and $1.52 (diluted), in the same period last year for $1.32 (basic and diluted).
on March 31, 2014, the group’s cash and cash equivalents and deposit of RMB 19.252 billion ($3.097 billion), as of December 31, 2013, is RMB 18.584 billion yuan. In the first quarter of 2014 business activities net cash inflow is about 1.65 billion yuan ($265 million), the previous year and the same period of last year to 1.623 billion yuan and 1.548 billion yuan. nullnullnullnullnull