NetEase Reports Q4 Earnings
5 Min. Read Time
Key News
Asian equities were mostly higher as Vietnam and Japan outperformed, while Mainland China and India underperformed.
Mainland China's markets were mixed as the Shanghai managed a gain, while Shenzhen and the technloogy-focused STAR Market experienced slight declines overnight. Semiconductor stocks were mixed, which impacted the performance of the STAR Market. Semiconductor Manufacturing International (SMIC) declined -1.07%. Non-ferrrous metals and precious metals stocks rebounded overnight.
Medical conract research organization WuXi Biologics rose after it reported that preliminary 2025 net income rose 46%.
BYD surpassed Ford in vehicle deliveries for the first time in 2025. This is a huge milestone after the company surpassed Tesla for the same metric. It makes sense as BYD does well in both internal combustion and electric vehicles.
Internet earnings started as NetEase reported after the close in Hong Kong overnight. However, the bulk of the earnings will come later this month and into March. Please see below for indicated earnings dates for top internet companies.
| Internet Company | Earnings Date (Expected) |
|---|---|
| NetEase | 2/11/2026 |
| Alibaba | 2/19/2026 |
| Mercado Libre | 2/24/2026 |
| Trip.com | 2/25/2026 |
| JD.com | 3/6/2026 |
| JD Health | 3/6/2026 |
| Tencent | 3/18/2026 |
| KE Holdings | 3/18/2026 |
| PDD Holdings | 3/20/2026 |
| Meituan | 3/23/2026 |
MSCI announced its latest inclusions and deletions in the MSCI China Index. The global index provider added 37 stocks and removed 16 stocks from the index. Notable additions included Sense Time and Hesai.
In its earnings call, NetEase confirmed that management is in discussions with the Hong Kong Stock Exchange to designate its Hong Kong-listing as a dual primary listing with the US. This is a significant move, as it would open the stock up to Mainland investors through includion in Southbound Stock Connect. Stock Connect requires dual primary status to be attained in Hong Kong if a company is also listed in the United States. NetEase will likely have to make some adjustments to its employee stock option plans and other corporate governance changes to satisfy the Hong Kong Exchange's requirements. Alibaba went through the same process in 2024.
NetEase Q4 Earnings Overview
% changes are year-over-year
- Revenue +3% to RMB 27.5B ($4.0B) versus estimate RMB 28.8B
- Net Income RMB 7.4B ($1.1B) versus estimate RMB
- Net Margin 27%
- Earnings per Share (EPS) RMB 11.5 ($1.7)
NetEase missed analyst estimates on its top and bottom line due to a slowdown in games growth overall driven by a decline in growth for legacy titles such as Justice Mobile. NetEase was up in Hong Kong overnight and the earnings were reported after the close. However, the name is higher in the US this morning. NetEase management reported the strong implementation of AI across its gaming products, improving the user experience almost everywhere. Meanwhile, the company completed fewer share buybacks than earlier in the year in the fourt quarter. Looking forward, the level of promotion for the Lunar New Year holiday and other subsidies to encourage spending and games growth wil be key to watch.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.3% |
| Hang Seng Tech | HSTECH Index | 0.9% |
| Hong Kong Turnover | HKTurn Index | -7.2% |
| Hong Kong Short Sale Turnover | HKSST Index | -1.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 615.092720306513 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | -0.2% |
| China (STAR Board) | Star50 Index | -1.1% |
| Mainland Turnover | .chturn Index | -5.7% |
| Japan | NKY Index | 2.3% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | 2% |
| Malaysia | FBMKLCI Index | 0.5% |
| Pakistan | KSE100 Index | 0.6% |
| Philippines | PCOMP Index | 0.4% |
| South Korea | KOSPI Index | 1% |
| Taiwan | TWSE Index | 1.6% |
| Thailand | SET Index | 0.1% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 1.7% |
| Vietnam | VNINDEX Index | 2.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 83 | 106 |
| Advancing Stocks | 62 (Hang Seng) | 126 (CSI 300) |
| Declining Stocks | 23 (Hang Seng) | 136 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Materials, Information Technology, Energy | Materials, Energy, Consumer Discretionary |
| Bottom Sectors | Financials, Communication Services, Consumer Discretionary | Information Technology, Real Estate, Utilities |
| Top Subsectors | Construction Materials, Non-Ferrous Metals, Chemical Industry | Petrochemicals, Building Materials, Base Metals |
| Bottom Subsectors | Consumer Durables, Semiconductors, Health Care Equipment | Cultural Media, Education, Leisure Products |
| Southbound Connect Buys | Tencent, Zijin Gold International, Meituan | N/A |
| Southbound Connect Sells | Alibaba, Semiconductor Manufacturing International (SMIC), China Life Insurance | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 0.33 |
| Communication Services | 11 | -0.17 |
| Consumer Discretionary | 28 | 0.14 |
| Consumer Staples | 13 | 0.87 |
| Energy | 6 | 1.3 |
| Financials | 25 | -0.54 |
| Health Care | 16 | 0.76 |
| Industrials | 22 | 1.03 |
| Information Technology | 12 | 2.68 |
| Materials | 14 | 2.69 |
| Real Estate | 7 | 0.79 |
| Utilities | 11 | 0.83 |
| Mainland China Listed | 386 | -0.01 |
| Communication Services | 8 | -0.11 |
| Consumer Discretionary | 26 | 0.41 |
| Consumer Staples | 19 | -0.07 |
| Energy | 12 | 1.01 |
| Financials | 64 | -0.14 |
| Health Care | 31 | 0.07 |
| Industrials | 58 | 0.14 |
| Information Technology | 95 | -1.61 |
| Materials | 52 | 2.53 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.5 |
| Alibaba HK | 9988 HK Equity | -0.2 |
| JD.com HK | 9618 HK Equity | -0.2 |
| NetEase HK | 9999 HK Equity | 1 |
| Yum China HK | 9987 HK Equity | -1 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | 0.6 |
| Autohome HK | 2518 HK Equity | -4.6 |
| Bilibili HK | 9626 HK Equity | 5.2 |
| Trip.com HK | 9961 HK Equity | -0.5 |
| EDU HK | 9901 HK Equity | 3.2 |
| Xpeng HK | 9868 HK Equity | 1.9 |
| Weibo HK | 9898 HK Equity | 0.3 |
| Li Auto HK | 2015 HK Equity | 2.7 |
| Nio Auto HK | 9866 HK Equity | 1.6 |
| Zhihu HK | 2390 HK Equity | 2.5 |
| KE HK | 2423 HK Equity | 1.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | 4.6 |
| Meituan HK | 3690 HK Equity | 0.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -0.5 |
| XIAOMI CORP-CLASS B | 4.3 |
| ALIBABA GROUP HOLDING LTD | -0.2 |
| SEMICONDUCTOR MANUFACTURI-H | -2.2 |
| POP MART INTERNATIONAL GROUP | -5.5 |
| ZIJIN MINING GROUP CO LTD-H | 2.8 |
| MEITUAN-CLASS B | 0.1 |
| YANGTZE OPTICAL FIBRE AND-H | -5.7 |
| BYD CO LTD-H | 3.5 |
| CHINA LIFE INSURANCE CO-H | -3.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -4.3 |
| EOPTOLINK TECHNOLOGY INC L-A | -5.5 |
| BEIJING ENLIGHT MEDIA CO L-A | 5.1 |
| WANGSU SCIENCE & TECHNOLOG-A | 9.5 |
| CHINA NORTHERN RARE EARTH -A | 5 |
| BEIJING JETSEN TECHNOLOGY-A | 4.7 |
| COL GROUP CO LTD-A | -6 |
| GCL SYSTEM INTEGRATION TEC-A | 0 |
| SUZHOU TFC OPTICAL COMMUNI-A | 0.2 |
| BLUEFOCUS INTELLIGENT COMM-A | -3.6 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.91 versus 6.91 yesterday
- CNY per EUR 8.20 versus 8.22 yesterday
- Yield on 10-Year Government Bond 1.80% versus 1.81% yesterday
- Yield on 10-Year China Development 1.93% versus 1.93% yesterday
- Copper Price 1.25%
- Steel Price -0.07%
