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NetEase.com profit jumps on China gaming boom
NetEase, China's second biggest online game operator, said it expected net profit to grow about 14 per cent.
China's NetEase.com Inc reported a sharp rise in second-quarter profit on a boom in its core online gaming business, sparking a rally for its shares as it foresaw more growth in the current quarter.
NetEase, China's second biggest online game operator, said it expected net profit to grow about 14 per cent, and revenues to grow 17 per cent, in the third quarter from the second. This follows a 58-per cent profit increase and 27-per cent revenue jump in the second quarter from the first.
Its American Depositary Shares (ADSs), which closed down 1.3 per cent in regular trade on the Nasdaq, shot up 17 per cent to $69.75 in after-hours trade following the release of results.
"We believe we have strong skills in combining traditional Chinese culture and advanced gaming technology," said Michael Tong, chief operating officer of the former Web portal that has transformed itself into an online game specialist, in a conference call to discuss the results.
"This gives NetEase a distinct advantage over our competitors."
NetEase acting Chief Executive Officer Ted Sun said the company expected to report a third-quarter net profit of $32.6 million to $34.2 million on gross revenue of $58 million to $59.7 million.
Those figures, the company said, were based on the pegged conversion rate of 8.28 yuan to the dollar that China abandoned last month after revaluing its currency by 2.1 per cent and allowing it to move in reference to a basket of currencies.
