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NetEase and Nio surprise positively

The Chinese internet technology company NetEase was able to benefit from the coronavirus pandemic in the past quarter and exceeded expectations in the third quarter. This also applies to the latest company results of the Chinese electric car manufacturer Nio, whose share has seen particularly strong gains this year.

First things first about NetEase and Nio:

  • NetEase with high revenue growth in gaming services
  • Nio is the seventh largest car manufacturer in the world

NetEase has various Internet business areas with Chinese-language content and offers numerous services in the online games area as well as in the digital media area. The strength of the group, however, is the games sector, which also shone in the current quarter.

At HKD 1.26, earnings per share were lower than in the same quarter of the previous year when HKD 1.61 was achieved. In terms of sales, NetEase posted HKD 21.97 billion in the past quarter. This corresponds to an increase in sales of more than 30 percent compared to the previous year. At that time, NetEase had turned over HKD 16.26 billion. Now sales in online game services have risen sharply by around 20 percent. Analysts (FactSet) had expected less overall, namely earnings of HKD 0.744 per share and sales of HKD 20.76 billion.

Products on NetEase Inc. ADR

The e-automobile industry is not only attracting attention with the flagship Tesla. Various Chinese companies have established themselves in the slipstream of the world’s largest electric car manufacturer, including Nio. Similar to Tesla, Nio has overtaken traditional carmakers in terms of ratings. With a market capitalization of more than $ 60 billion, the group is now the seventh largest automobile company in the world, ahead of BMW and GM. Nio will produce around 60,000 automobiles this year, for comparison: Toyota and VW produce around 10 million vehicles a year.

But Nio is growing rapidly, as the latest quarterly figures show. Sales increased by almost 170 percent compared to the previous year. It was last at CNY 4.53 billion (yuan), the analyst consensus at FactSet had expected CNY 4.37 billion. The loss decreased from CNY 2.55 per share to CNY 0.98. Analysts had previously expected a loss of 1.18 CNY per share. The Nio share rose even faster than at Tesla. This year it climbed from almost $ 4 at the beginning of the year to currently almost $ 50. A profit of around 1000 percent. The Netease share also increased significantly this year, but could not keep up with Nio with a price increase of 45 percent.

Products on NIO INC. ADR

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Source: HSBC

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