Mobile games push NetEase stocks up 200% in 3 years

Chinese internet company NetEase has seen its shares rocket up over 200% in value in the past three years, with the NASDAQ stock price growing from around USD 64.5 in July of 2013 to USD 199.5 in July of 2016, Tencent Tech reported on Tuesday.

Additionally, according to NetEase’s latest financial report, the company achieved a net revenue of nearly RMB eight billion (USD 1.2 billion) in Q1 2016, a YoY growth of 116.3%. Online gaming achieved a YoY growth of 104.5%, making NetEase more than RMB six billion in net revenue, around three quarters of the company’s total net revenue.

Six billion out of the eight billion total revenue – NetEase is benefiting greatly from its PC and mobile games. Mobile games are the main cause of the large jump in stock price over the past three years.

“Mobile games remains a major driving force of our income,” said NetEase founder and CEO, Ding Lei. The game developer now has 90 mobile games that cover different categories, with another 41 currently under development. Aside from its own games, NetEase also cooperates with other game developers for licensed games.

Online gaming is booming, particularly in China’s mobile game market. Among more than 680 million netizens in China, 90% of them use mobile phones, according to the China Internet Network Information Center. That could explain why NetEase is working on mobile games.

According to Forbes, mobile games accounted for 36.6% of all gaming in China in 2015, while the percentage in 2012 was merely 5.4%.

Tencent is China’s largest game company: the revenue of its game division reached RMB 17.1 billion in Q1 2016, as compared with the RMB six billion reached by NetEase. Nonetheless, NetEase may yet gain a chance to surpass Tencent if they can fully grasp the mobile game market.

(Top photo from Baidu Images)

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