Intrinsic value of Netease ADR - NTES

Previous Close

$322.19

  Intrinsic Value

$1,129

stock screener

  Rating & Target

str. buy

+250%

Previous close

$322.19

 
Intrinsic value

$1,129

 
Up/down potential

+250%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NTES stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  67.41
  35.40
  32.36
  29.62
  27.16
  24.95
  22.95
  21.16
  19.54
  18.09
  16.78
  15.60
  14.54
  13.59
  12.73
  11.95
  11.26
  10.63
  10.07
  9.56
  9.11
  8.70
  8.33
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
  6.59
  6.43
Revenue, $m
  5,523
  7,478
  9,898
  12,830
  16,315
  20,385
  25,064
  30,366
  36,300
  42,865
  50,057
  57,865
  66,279
  75,283
  84,865
  95,010
  105,707
  116,947
  128,724
  141,034
  153,877
  167,258
  181,184
  195,668
  210,723
  226,369
  242,628
  259,525
  277,089
  295,352
  314,348
Variable operating expenses, $m
 
  4,868
  6,444
  8,353
  10,621
  13,271
  16,316
  19,768
  23,631
  27,905
  32,587
  37,670
  43,148
  49,009
  55,247
  61,852
  68,815
  76,133
  83,799
  91,813
  100,174
  108,885
  117,951
  127,380
  137,181
  147,366
  157,951
  168,951
  180,385
  192,274
  204,641
Fixed operating expenses, $m
 
  103
  105
  108
  110
  113
  116
  119
  122
  125
  128
  131
  134
  138
  141
  145
  148
  152
  156
  160
  164
  168
  172
  176
  181
  185
  190
  195
  200
  205
  210
Total operating expenses, $m
  3,696
  4,971
  6,549
  8,461
  10,731
  13,384
  16,432
  19,887
  23,753
  28,030
  32,715
  37,801
  43,282
  49,147
  55,388
  61,997
  68,963
  76,285
  83,955
  91,973
  100,338
  109,053
  118,123
  127,556
  137,362
  147,551
  158,141
  169,146
  180,585
  192,479
  204,851
Operating income, $m
  1,827
  2,507
  3,349
  4,370
  5,584
  7,001
  8,631
  10,479
  12,547
  14,835
  17,342
  20,064
  22,997
  26,136
  29,477
  33,014
  36,743
  40,662
  44,769
  49,061
  53,539
  58,205
  63,061
  68,112
  73,361
  78,817
  84,487
  90,379
  96,504
  102,873
  109,498
EBITDA, $m
  1,874
  2,569
  3,431
  4,475
  5,717
  7,168
  8,837
  10,728
  12,844
  15,186
  17,752
  20,538
  23,540
  26,753
  30,172
  33,793
  37,610
  41,621
  45,824
  50,217
  54,801
  59,577
  64,547
  69,716
  75,089
  80,674
  86,477
  92,507
  98,776
  105,295
  112,075
Interest expense (income), $m
  0
  0
  29
  64
  107
  159
  218
  287
  365
  452
  549
  654
  769
  893
  1,025
  1,166
  1,315
  1,472
  1,637
  1,810
  1,991
  2,179
  2,376
  2,581
  2,793
  3,015
  3,244
  3,483
  3,731
  3,990
  4,258
Earnings before tax, $m
  2,010
  2,507
  3,321
  4,306
  5,476
  6,843
  8,413
  10,192
  12,182
  14,383
  16,793
  19,410
  22,228
  25,244
  28,452
  31,848
  35,429
  39,191
  43,132
  47,251
  51,548
  56,026
  60,685
  65,531
  70,568
  75,803
  81,243
  86,896
  92,773
  98,884
  105,240
Tax expense, $m
  304
  677
  897
  1,163
  1,479
  1,848
  2,271
  2,752
  3,289
  3,883
  4,534
  5,241
  6,002
  6,816
  7,682
  8,599
  9,566
  10,581
  11,646
  12,758
  13,918
  15,127
  16,385
  17,693
  19,053
  20,467
  21,936
  23,462
  25,049
  26,699
  28,415
Net income, $m
  1,679
  1,830
  2,424
  3,143
  3,998
  4,995
  6,141
  7,440
  8,893
  10,499
  12,259
  14,169
  16,226
  18,428
  20,770
  23,249
  25,863
  28,609
  31,486
  34,493
  37,630
  40,899
  44,300
  47,838
  51,515
  55,336
  59,307
  63,434
  67,724
  72,185
  76,825

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  5,264
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  8,396
  4,242
  5,614
  7,278
  9,254
  11,563
  14,216
  17,224
  20,590
  24,314
  28,393
  32,822
  37,594
  42,702
  48,137
  53,891
  59,959
  66,334
  73,014
  79,996
  87,281
  94,871
  102,770
  110,986
  119,525
  128,400
  137,622
  147,206
  157,169
  167,528
  178,303
Adjusted assets (=assets-cash), $m
  3,132
  4,242
  5,614
  7,278
  9,254
  11,563
  14,216
  17,224
  20,590
  24,314
  28,393
  32,822
  37,594
  42,702
  48,137
  53,891
  59,959
  66,334
  73,014
  79,996
  87,281
  94,871
  102,770
  110,986
  119,525
  128,400
  137,622
  147,206
  157,169
  167,528
  178,303
Revenue / Adjusted assets
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
  1.763
Average production assets, $m
  225
  307
  406
  526
  669
  836
  1,028
  1,245
  1,488
  1,757
  2,052
  2,372
  2,717
  3,087
  3,479
  3,895
  4,334
  4,795
  5,278
  5,782
  6,309
  6,858
  7,429
  8,022
  8,640
  9,281
  9,948
  10,641
  11,361
  12,109
  12,888
Working capital, $m
  4,370
  -464
  -614
  -795
  -1,012
  -1,264
  -1,554
  -1,883
  -2,251
  -2,658
  -3,104
  -3,588
  -4,109
  -4,668
  -5,262
  -5,891
  -6,554
  -7,251
  -7,981
  -8,744
  -9,540
  -10,370
  -11,233
  -12,131
  -13,065
  -14,035
  -15,043
  -16,091
  -17,180
  -18,312
  -19,490
Total debt, $m
  552
  820
  1,836
  3,066
  4,529
  6,237
  8,201
  10,427
  12,917
  15,673
  18,692
  21,969
  25,501
  29,280
  33,302
  37,560
  42,051
  46,768
  51,711
  56,878
  62,269
  67,886
  73,731
  79,810
  86,130
  92,697
  99,521
  106,614
  113,986
  121,652
  129,625
Total liabilities, $m
  2,870
  3,139
  4,155
  5,385
  6,848
  8,556
  10,520
  12,746
  15,236
  17,992
  21,011
  24,288
  27,820
  31,599
  35,621
  39,879
  44,370
  49,087
  54,030
  59,197
  64,588
  70,205
  76,050
  82,129
  88,449
  95,016
  101,840
  108,933
  116,305
  123,971
  131,944
Total equity, $m
  5,525
  1,103
  1,460
  1,892
  2,406
  3,006
  3,696
  4,478
  5,353
  6,322
  7,382
  8,534
  9,775
  11,102
  12,516
  14,012
  15,589
  17,247
  18,984
  20,799
  22,693
  24,667
  26,720
  28,856
  31,077
  33,384
  35,782
  38,274
  40,864
  43,557
  46,359
Total liabilities and equity, $m
  8,395
  4,242
  5,615
  7,277
  9,254
  11,562
  14,216
  17,224
  20,589
  24,314
  28,393
  32,822
  37,595
  42,701
  48,137
  53,891
  59,959
  66,334
  73,014
  79,996
  87,281
  94,872
  102,770
  110,985
  119,526
  128,400
  137,622
  147,207
  157,169
  167,528
  178,303
Debt-to-equity ratio
  0.100
  0.740
  1.260
  1.620
  1.880
  2.070
  2.220
  2.330
  2.410
  2.480
  2.530
  2.570
  2.610
  2.640
  2.660
  2.680
  2.700
  2.710
  2.720
  2.730
  2.740
  2.750
  2.760
  2.770
  2.770
  2.780
  2.780
  2.790
  2.790
  2.790
  2.800
Adjusted equity ratio
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,679
  1,830
  2,424
  3,143
  3,998
  4,995
  6,141
  7,440
  8,893
  10,499
  12,259
  14,169
  16,226
  18,428
  20,770
  23,249
  25,863
  28,609
  31,486
  34,493
  37,630
  40,899
  44,300
  47,838
  51,515
  55,336
  59,307
  63,434
  67,724
  72,185
  76,825
Depreciation, amort., depletion, $m
  47
  61
  81
  105
  134
  167
  206
  249
  298
  351
  410
  474
  543
  617
  696
  779
  867
  959
  1,056
  1,156
  1,262
  1,372
  1,486
  1,604
  1,728
  1,856
  1,990
  2,128
  2,272
  2,422
  2,578
Funds from operations, $m
  2,623
  1,892
  2,505
  3,248
  4,131
  5,162
  6,347
  7,689
  9,190
  10,851
  12,669
  14,643
  16,770
  19,045
  21,466
  24,028
  26,730
  29,568
  32,542
  35,650
  38,892
  42,270
  45,786
  49,442
  53,243
  57,192
  61,297
  65,562
  69,996
  74,607
  79,403
Change in working capital, $m
  382
  -121
  -150
  -182
  -216
  -252
  -290
  -329
  -368
  -407
  -446
  -484
  -522
  -558
  -594
  -629
  -663
  -697
  -730
  -763
  -796
  -830
  -863
  -898
  -933
  -970
  -1,008
  -1,048
  -1,089
  -1,132
  -1,178
Cash from operations, $m
  2,241
  2,013
  2,655
  3,430
  4,348
  5,415
  6,637
  8,018
  9,558
  11,258
  13,115
  15,128
  17,291
  19,603
  22,060
  24,657
  27,393
  30,265
  33,272
  36,413
  39,688
  43,100
  46,649
  50,340
  54,176
  58,162
  62,305
  66,610
  71,085
  75,739
  80,581
Maintenance CAPEX, $m
  0
  -45
  -61
  -81
  -105
  -134
  -167
  -206
  -249
  -298
  -351
  -410
  -474
  -543
  -617
  -696
  -779
  -867
  -959
  -1,056
  -1,156
  -1,262
  -1,372
  -1,486
  -1,604
  -1,728
  -1,856
  -1,990
  -2,128
  -2,272
  -2,422
New CAPEX, $m
  -165
  -82
  -99
  -120
  -143
  -167
  -192
  -217
  -243
  -269
  -295
  -320
  -345
  -369
  -393
  -416
  -439
  -461
  -483
  -505
  -527
  -549
  -571
  -594
  -617
  -641
  -667
  -693
  -720
  -749
  -779
Cash from investing activities, $m
  -2,026
  -127
  -160
  -201
  -248
  -301
  -359
  -423
  -492
  -567
  -646
  -730
  -819
  -912
  -1,010
  -1,112
  -1,218
  -1,328
  -1,442
  -1,561
  -1,683
  -1,811
  -1,943
  -2,080
  -2,221
  -2,369
  -2,523
  -2,683
  -2,848
  -3,021
  -3,201
Free cash flow, $m
  215
  1,886
  2,495
  3,229
  4,099
  5,114
  6,278
  7,595
  9,066
  10,691
  12,469
  14,397
  16,472
  18,691
  21,050
  23,545
  26,175
  28,937
  31,830
  34,853
  38,005
  41,289
  44,707
  48,261
  51,954
  55,793
  59,782
  63,928
  68,237
  72,718
  77,380
Issuance/(repayment) of debt, $m
  216
  820
  1,016
  1,231
  1,463
  1,708
  1,964
  2,226
  2,491
  2,756
  3,019
  3,278
  3,531
  3,780
  4,022
  4,258
  4,490
  4,718
  4,943
  5,167
  5,391
  5,617
  5,845
  6,079
  6,319
  6,567
  6,824
  7,092
  7,372
  7,666
  7,974
Issuance/(repurchase) of shares, $m
  -173
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  42
  820
  1,016
  1,231
  1,463
  1,708
  1,964
  2,226
  2,491
  2,756
  3,019
  3,278
  3,531
  3,780
  4,022
  4,258
  4,490
  4,718
  4,943
  5,167
  5,391
  5,617
  5,845
  6,079
  6,319
  6,567
  6,824
  7,092
  7,372
  7,666
  7,974
Total cash flow (excl. dividends), $m
  277
  2,706
  3,510
  4,460
  5,562
  6,822
  8,242
  9,821
  11,557
  13,447
  15,488
  17,675
  20,004
  22,470
  25,071
  27,804
  30,665
  33,655
  36,773
  40,019
  43,396
  46,906
  50,552
  54,340
  58,274
  62,360
  66,606
  71,020
  75,609
  80,384
  85,354
Retained Cash Flow (-), $m
  -1,295
  -290
  -357
  -432
  -514
  -600
  -690
  -782
  -875
  -968
  -1,061
  -1,152
  -1,241
  -1,328
  -1,413
  -1,496
  -1,578
  -1,658
  -1,737
  -1,815
  -1,894
  -1,973
  -2,054
  -2,136
  -2,220
  -2,307
  -2,398
  -2,492
  -2,590
  -2,693
  -2,802
Prev. year cash balance distribution, $m
 
  4,712
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  7,128
  3,154
  4,027
  5,048
  6,222
  7,552
  9,039
  10,681
  12,479
  14,427
  16,523
  18,763
  21,142
  23,658
  26,308
  29,088
  31,998
  35,036
  38,204
  41,502
  44,933
  48,499
  52,204
  56,053
  60,053
  64,209
  68,528
  73,019
  77,691
  82,552
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  6,834
  2,887
  3,505
  4,157
  4,823
  5,481
  6,106
  6,676
  7,168
  7,564
  7,847
  8,007
  8,039
  7,942
  7,723
  7,392
  6,962
  6,452
  5,882
  5,274
  4,648
  4,024
  3,421
  2,855
  2,336
  1,873
  1,471
  1,130
  848
  622
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

NetEase, Inc. (NetEase) is a technology company. The Company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet media, e-mail, e-commerce and other businesses. The Company operates through three segments: Online Game Services; Advertising Services, and E-mail, E-commerce and Others. Its online games business primarily focuses on offering personal computer (PC)-client massively multi-player online role-playing games (PC-client MMORPGs), as well as mobile games to the Chinese market. The NetEase Websites provide Internet users with Chinese language online services centered over three core service categories, which include content, community and communication. Its online advertising offerings include banner advertising, direct e-mail, sponsored special events, games, contests and other activities. It offers free and fee-based premium e-mail services to its individual users and corporate users.

FINANCIAL RATIOS  of  Netease ADR (NTES)

Valuation Ratios
P/E Ratio 630.7
Price to Sales 191.7
Price to Book 191.7
Price to Tangible Book
Price to Cash Flow 472.6
Price to Free Cash Flow 510.1
Growth Rates
Sales Growth Rate 67.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 10.7%
Cap. Spend. - 3 Yr. Gr. Rate 38.8%
Financial Strength
Quick Ratio 10
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 10%
Interest Coverage 0
Management Effectiveness
Return On Assets 23.4%
Ret/ On Assets - 3 Yr. Avg. 19.9%
Return On Total Capital 31.6%
Ret/ On T. Cap. - 3 Yr. Avg. 25.2%
Return On Equity 34.4%
Return On Equity - 3 Yr. Avg. 27.3%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 56.7%
Gross Margin - 3 Yr. Avg. 62.6%
EBITDA Margin 37.2%
EBITDA Margin - 3 Yr. Avg. 40.6%
Operating Margin 33.1%
Oper. Margin - 3 Yr. Avg. 35.2%
Pre-Tax Margin 36.4%
Pre-Tax Margin - 3 Yr. Avg. 39.5%
Net Profit Margin 30.4%
Net Profit Margin - 3 Yr. Avg. 33.5%
Effective Tax Rate 15.1%
Eff/ Tax Rate - 3 Yr. Avg. 14.3%
Payout Ratio 21.9%

NTES stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTES stock intrinsic value calculation we used $5523 million for the last fiscal year's total revenue generated by Netease ADR. The default revenue input number comes from 2016 income statement of Netease ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NTES stock valuation model: a) initial revenue growth rate of 35.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NTES is calculated based on our internal credit rating of Netease ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Netease ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NTES stock the variable cost ratio is equal to 65.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $100 million in the base year in the intrinsic value calculation for NTES stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Netease ADR.

Corporate tax rate of 27% is the nominal tax rate for Netease ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NTES stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NTES are equal to 4.1%.

Life of production assets of 4.8 years is the average useful life of capital assets used in Netease ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NTES is equal to -6.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5525 million for Netease ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 133.973 million for Netease ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Netease ADR at the current share price and the inputted number of shares is $43.2 billion.

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COMPANY NEWS

▶ Level Up: China's Online Gaming Keeps Growing   [Jan-17-18 10:44AM  Barrons.com]
▶ Should You Buy Activision Blizzard, Inc.? 3 Pros, 3 Cons   [Jan-11-18 10:10AM  InvestorPlace]
▶ New Strong Sell Stocks for January 9th   [Jan-09-18 08:26AM  Zacks]
▶ Pokemon Go to Launch in China   [Jan-02-18 01:03PM  InvestorPlace]
▶ New Strong Sell Stocks for December 27th   [Dec-27-17 09:32AM  Zacks]
▶ Breaking Down NetEases e-Commerce Push   [Dec-22-17 09:00AM  Market Realist]
▶ Qualcomm: Hold or Sell?   [Dec-18-17 04:01PM  GuruFocus.com]
▶ Trade NetEase.com From the Long Side   [11:45AM  TheStreet.com]
▶ ETFs with exposure to NetEase, Inc. : December 13, 2017   [Dec-13-17 01:48PM  Capital Cube]
▶ Jim Simons: Pioneer Quant Manager   [Dec-12-17 02:54PM  GuruFocus.com]
▶ Why NetEase Stock Jumped 16.6% in November   [Dec-09-17 07:01PM  Motley Fool]
▶ 2 Catalysts That Could Push NetEase Higher   [Nov-30-17 02:17PM  Motley Fool]
▶ Company News For Nov 20, 2017   [09:30AM  Zacks]
▶ Chinese Video Game Publisher NetEase Spikes To Record High   [Nov-17-17 05:36PM  Investor's Business Daily]
▶ Why NetEase Stock Jumped Today   [01:09PM  Motley Fool]
▶ China's NetEase Blasts Into Buy Zone On Strong Earnings   [Nov-16-17 04:02PM  Investor's Business Daily]
▶ Cost Pressures Hit NetEase's Bottom Line   [08:10AM  Motley Fool]
▶ S&P 500 Futures Rally On Wal-Mart; Cisco Set To Retake Buy   [07:14AM  Investor's Business Daily]
▶ NetEase posts 3Q profit   [Nov-15-17 06:16PM  Associated Press]
▶ NetEase Inc (NTES): What Does The Future Look Like?   [Nov-14-17 08:46PM  Simply Wall St.]
▶ NetEase Stock Has a Lot to Prove on Wednesday   [Nov-13-17 04:35PM  Motley Fool]
▶ Why Shares of NetEase Inc. Surged Today   [Nov-06-17 04:34PM  Motley Fool]
▶ Take-Two Scores New High On Price-Target Hike; NetEase Downgraded   [Oct-30-17 04:35PM  Investor's Business Daily]
▶ 2 Reasons NetEase Is Built for Growth   [Oct-29-17 08:40AM  Motley Fool]
▶ ETFs with exposure to NetEase, Inc. : October 27, 2017   [Oct-27-17 11:07AM  Capital Cube]
▶ At $277.73, Is NetEase Inc (NTES) A Buy?   [Oct-19-17 04:17PM  Simply Wall St.]
▶ 3 Stocks for Future Millionaires   [Oct-12-17 09:38PM  Motley Fool]
▶ Lukewarm Analysts Can't Sink NetEase Stock   [Oct-10-17 10:09AM  Motley Fool]
▶ 3 Incredibly Cheap Chinese Tech Stocks   [09:00AM  Motley Fool]
▶ ETFs with exposure to NetEase, Inc. : October 5, 2017   [Oct-05-17 11:13AM  Capital Cube]
▶ ETFs with exposure to NetEase, Inc. : September 25, 2017   [Sep-25-17 10:42AM  Capital Cube]
▶ Should You Buy NetEase Inc (NTES) Now?   [Sep-15-17 12:37PM  Simply Wall St.]
▶ ETFs with exposure to NetEase, Inc. : September 14, 2017   [Sep-14-17 06:45PM  Capital Cube]
▶ Why NetEase Stock Fell 11% in August   [Sep-13-17 07:31PM  Motley Fool]
▶ 2 Video-Game Stocks to Consider for the Long Run   [Sep-05-17 09:19PM  Motley Fool]
▶ New Strong Sell Stocks for August 25th   [Aug-25-17 06:20AM  Zacks]
▶ Why NetEase's Dip Is an Opportunity in Disguise   [Aug-16-17 09:46AM  Motley Fool]
▶ Tech Tumblers: SNAP, NVDA, NTES, APRN   [Aug-11-17 12:24PM  TheStreet.com]
▶ NetEase: Buy the Dip?   [02:40AM  Barrons.com]
▶ NetEase Reports Second Quarter 2017 Financial Results   [Aug-10-17 11:25PM  CNW Group]
▶ Why NetEase Stock Plunged Today   [01:34PM  Motley Fool]
▶ Chinese Internet Stocks NetEase, YY Retreat   [04:36AM  Investor's Business Daily]
▶ NetEase posts 2Q profit   [Aug-09-17 11:32PM  Associated Press]
▶ Coming Up Wednesday: Earnings From 4 Major China Internet Companies   [Aug-08-17 11:12AM  Investor's Business Daily]
▶ Will NetEase Make It or Break It This Earnings Season?   [Aug-07-17 08:11PM  Motley Fool]
▶ Netease: What to Expect From Q2 Results   [Aug-02-17 11:35PM  Barrons.com]
▶ Chinese stocks are getting slammed   [12:17PM  Yahoo Finance]
Financial statements of NTES
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