NetEase Grew Gradually in Q1 2022 with 38.6% Increase YoY in Cloud Music Section

Consumer Discretionary, Communication Author: Contributor, 施放, Fuller Wang May 24, 2022 05:16 PM (GMT+8)

NetEase was continuously well-functioning in Q1 2022. Its plan and new add-ins in several sections can potentially indicate NetEase’s success in Q2 2022.

Netease

On May 24, 2022, NetEase released its financial report for Q1 2022. The revenue in this quarter was CNY 23.6 billion, which was CNY 1 billion above market expectation. Compared with Q1 2021’s revenue of CNY 20.5 billion, NetEase was up 14.8% year-over-year. NetEase’s gross profit was CNY 12.8 billion, up 16.1% year-over-year. The net profit attributed to shareholders was CNY 4.4 billion. Under non-GAAP, this amount was CNY 5.1 billion.

Going detailly into the major sections of NetEase, the net revenue from online game services was CNY 17.3 billion, up 15.3% year-over-year. The net revenue from Youdao, the online translator, was CNY 1.2 billion, down 10.4% year-over-year. The net revenue from Cloud Music was CNY 2.1 billion, up 38.6% year-over-year. The net revenue from innovation and other businesses was CNY 3 billion, up 11.5% year-over-year. Those data showed a good sign of NetEase’s growth in the future. 

The section of online game services was relatively stable, driving the whole company’s growth in Q1 2022. The current overseas market counts for more than 10% of online game services. NetEase will focus on the development of the overseas market and expect to reach a market share of 40% to 50%.

Focusing on Cloud Music, the net loss in Q1 2022 is CNY 200 million, down 89.2% year-over-year. Till the end of March 2022, the number of monthly active users of the online music service was 181.7 million, down 18.3 billion year-over-year. On May 17, 2022, Cloud Music published a patent related to its advanced recommendation methods. It can better target its product and meet users’ individual needs. Cloud Music’s High-Resolution Audio feature published on May 12, 2022 can also provide a better audiovisual feeling for its users. This feature is included in the VIP’s access, which can potentially attract more users to sign up for VIP, and therefore, increase its revenue in this section.