NTES
NetEase
China
★ Quality 52/100Price today
$122.16
what the market pays
Worth
$125.63
calculated cycle value
Price is 3% below its value
charlieapp.co
How many times the cash flow
China · vs 6 peers
You pay 10.1x times this business's cash flow; its sector median is 11x.
3% below what Charlie thinks it's worth (10.4x) — that gap is your safety margin.
Why Fair price?
The model estimates an intrinsic value of $125.63 per share. Today's price of $122.16 is just 3% off that value — not cheap, not expensive, that's a fair price.
This is a quality business. The price reflects that quality.
There's no extra safety margin. Not the best time to buy new.
To enter with a margin, the price should drop to $100.50–$119.35.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$100.50
-20% off Value
🟡 Discounted
≤$119.35
-5% off Value
⚪ Today
$122.16
+3% Valor
Fair price
Good business at a fair price. If you already own it, holding makes sense. For a new position, wait for a better price.
“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
— Warren Buffett
Model updated · July 2026
The business
A gaming machine that prints cash and doesn't owe a cent.
NetEase develops and operates video games for mobile and PC in China, its big cash register. It charges for in-game purchases and licensing; it rounds things out with streaming music (NetEase Cloud Music), education (Youdao), and commerce. The 64% gross margin tells the story.
Long-lived franchises like Fantasy Westward Journey have spent two decades retaining players and monetizing them nonstop. Making a game that lasts twenty years is rare; copying it, nearly impossible. But this isn't Tencent: the moat exists, without being impregnable.
Revenue history
From $13.6B to $16.1B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $16.1B · FY2025
Of every $100 in sales, $70 goes to costs and operations; $30 is left as net profit (30% margin).
Catalysts and risks
Approval of new game licenses by the Chinese regulator, freeing up held-back launches.
International expansion of titles to reduce dependence on China.
$6.7 billion in cash with zero debt: ammunition for buybacks and dividends.
The Chinese regulator can freeze licenses or limit gaming hours overnight.
VIE structure: you don't own the Chinese company, you own a contract in the Cayman Islands.
Excessive dependence on video games; a portfolio flop really hurts.
Charlie's note
“Paying 13x for a business with a 64% margin, no debt, and mountains of cash isn't crazy. The 4% growth is modest, but the price already assumes it with plenty of margin to spare.”
Analysis · June 2026
So when would be a good price for NetEase?
By our calculation, not yet. We will email you the day it drops to $119.35 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.