Part 1 of this article can be found here:
Given this background, you would think NTES’s management could have easily explained what happened. A great opportunity for them to do so is on the 2nd quarter earning conference call on 8/14/2008.
Let’s see what happened on the 2nd quarter earning conference. First, they stopped giving revenue breakdown per game (even though they had always done so before). This continues a pattern where they are providing less and less information to the wall street analysts.
In the question and answering session, an analyst specifically asked a question on the expansion pact schedule. Netease managers refuse to provide exact date.
The very next date, 8/15/2008, NTES announced on their web site they are coming out with the expansion pact of TX2 by the end of this month. See the following link:
During the earning conference, another analyst asked about the “perceived” recent weakness of TX2. Rather than explaining that is due to the strength of Netease’s anti-piracy technology, Netease’s management sneered and said something to the effect of what weakness and what confusion. That wall street analyst had to bring up the announcement made by NTES’s CEO that TX2 would be a million player (in PCU) mega-hit in one year. NTES’s management then basically just repeat that announcement again. No additional information is provided.
I know NTES’s management are all programmers and engineers. Their antipathy and aversion to the bean counters of wall street is palpable.
Of all the Chinese game companies, NTES had always been the one that provide the most information to their game players. It continues to be the case. They are open and friendly to the game players.
But it is also the company that would freeze out the wall street analysts.
About this Blog
The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.
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