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NetEase Inc – Software Publishers
NetEase, Inc. is a Chinese Internet technology company providing online services centered on content, community, communications, and commerce.
Analysis Results
Intrinsic Value $63.40
Latest Price $88.59
Relative Value 40% overvalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 10.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.5%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 10.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.55 1.45
2023 1.71 1.51
2024 1.89 1.56
2025 2.08 1.62
2026 2.3 1.68
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 52.4 billion. This corresponds to a present value of 36.0 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 7.82 billion. Adding in the terminal value gives a total present value of 43.8 billion.

There are presently 691.0 million outstanding shares, so the intrinsic value per share is 63.4.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 17,749,643,660
Current Cash 15,304,098,634
Current Liabilities 7,924,138,332
Current Debt 3,036,561,956
Non-Cash Working Capital (NCWC) -2,442,031,350
Change in NCWC -471,303,958
EBIT 2,575,994,414
Tax Provision 647,764,667
Depreciation and Amortization 513,992,719
Capital Expenditure -487,989,989
Unlevered Free Cash Flow 1,626,799,772
Current Assets 16,502,309,808
Current Cash 14,304,450,665
Current Liabilities 7,153,557,533
Current Debt 2,984,970,998
Non-Cash Working Capital (NCWC) -1,970,727,392
Change in NCWC -773,361,482
EBIT 2,224,936,871
Tax Provision 465,520,254
Depreciation and Amortization 529,174,050
Capital Expenditure -503,571,461
Unlevered Free Cash Flow 1,036,904,428
Current Assets 12,195,315,899
Current Cash 10,324,001,290
Current Liabilities 5,480,119,367
Current Debt 2,411,438,848
Non-Cash Working Capital (NCWC) -1,197,365,909
Change in NCWC -804,984,431
EBIT 1,976,781,973
Tax Provision 417,672,279
Depreciation and Amortization 374,547,825
Capital Expenditure -477,005,660
Unlevered Free Cash Flow 717,654,380
Current Assets 9,989,928,033
Current Cash 7,263,830,774
Current Liabilities 5,104,166,604
Current Debt 1,985,687,867
Non-Cash Working Capital (NCWC) -392,381,478
Change in NCWC -654,335,063
EBIT 1,133,188,630
Tax Provision 358,607,399
Depreciation and Amortization 302,900,486
Capital Expenditure -1,001,092,243
Unlevered Free Cash Flow -531,858,788
Current Assets 9,484,316,448
Current Cash 6,600,246,940
Current Liabilities 3,636,186,310
Current Debt 1,014,070,387
Non-Cash Working Capital (NCWC) 261,953,585
Change in NCWC 576,276,991
EBIT 1,858,898,165
Tax Provision 331,061,768
Depreciation and Amortization 122,757,673
Capital Expenditure -386,463,355
Unlevered Free Cash Flow 1,862,541,786
Current Assets 7,190,036,369
Current Cash 5,240,276,057
Current Liabilities 2,813,665,443
Current Debt 549,581,725
Non-Cash Working Capital (NCWC) -314,323,406
Change in NCWC -211,974,636
EBIT 1,806,601,114
Tax Provision 302,827,057
Depreciation and Amortization 47,172,650
Capital Expenditure -164,191,762
Unlevered Free Cash Flow 1,204,251,731
Current Assets 5,303,653,909
Current Cash 3,957,946,903
Current Liabilities 1,798,369,911
Current Debt 350,314,135
Non-Cash Working Capital (NCWC) -102,348,770
Change in NCWC -175,495,304
EBIT 1,109,160,960
Tax Provision 196,278,015
Depreciation and Amortization 28,122,113
Capital Expenditure -158,861,655
Unlevered Free Cash Flow 628,775,583
Current Assets 4,514,272,198
Current Cash 3,674,992,953
Current Liabilities 1,099,807,686
Current Debt 333,674,974
Non-Cash Working Capital (NCWC) 73,146,534
Change in NCWC -17,708,361
EBIT 775,662,282
Tax Provision 107,879,340
Depreciation and Amortization 28,398,749
Capital Expenditure -100,653,417
Unlevered Free Cash Flow 591,522,429
Current Assets 3,731,150,285
Current Cash 3,107,133,708
Current Liabilities 692,815,592
Current Debt 159,653,911
Non-Cash Working Capital (NCWC) 90,854,895
Change in NCWC 323,923,430
EBIT 712,359,082
Tax Provision 86,840,078
Depreciation and Amortization 25,918,163
Capital Expenditure -35,979,019
Unlevered Free Cash Flow 950,258,340
Current Assets 2,831,541,398
Current Cash 2,497,863,119
Current Liabilities 566,746,812
Current Debt 0
Non-Cash Working Capital (NCWC) -233,068,534
Change in NCWC -119,682,303
EBIT 588,161,954
Tax Provision 109,600,357
Depreciation and Amortization 37,002,770
Capital Expenditure -28,315,298
Unlevered Free Cash Flow 382,081,253

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