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# NetEase: Masked Margin Miss (Archive)
- URL: https://www.huntingalphas.com/ntes-netease-masked-margin-miss-archive/
- Published: 2023-02-25T08:30:00.000Z
- Updated: 2026-02-26T15:43:39.000Z
- Description: Favorable PC mix exposed a structural 360 bps margin headwind in core gaming.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, NTES, Communication Services

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- My most important takeaway from NetEase's Q4 FY22 earnings call yesterday is on the margin dynamics:
- The headline \~300bps gross profit margin miss vs consensus is understandable as it is due to a one-time effect.
- But a favorable mix effect toward PC games - which have materially higher margins than mobile games - failed to translate into higher margins.
- Based on this, I deduce that NetEase is seeing a 360bps margin headwind in its core online gaming business. I expect this weakness to continue as the underlying drivers look weak.
- Technical analysis supports my view, which is a 'Sell' stance on the stock.

Read the full article [here](https://seekingalpha.com/article/4581950-netease-stock-masked-margin-miss?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*