NetEase : Q2 2023 Investor Presentation

N e t E a s e

2Q23 Investor Presentation

Investor Relations

Aug 24, 2023

SAFE HARBOR STATEMENT

This announcement contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. In addition, statements that are not historical facts, including statements about NetEase's strategies and business plans, its expectations regarding the growth of its business and its revenue and the quotations from management in this announcement are or contain forward-looking statements. NetEase may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in announcements made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that the online games market will not continue to grow or that NetEase will not be able to maintain its position in that market in China or globally; risks associated with NetEase's business and operating strategies and its ability to implement such strategies; NetEase's ability to develop and manage its operations and business; competition for, among other things, capital, technology and skilled personnel; potential changes in government regulation that could adversely affect the industry and geographical markets in which NetEase operates; the risk that NetEase may not be able to continuously develop new and creative online services or that NetEase will not be able to set, or follow in a timely manner, trends in the market; the risk related to economic uncertainty and capital market disruption; the risk related to the expansion of NetEase's businesses and operations internationally; and the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect NetEase's business and financial results. Further information regarding these and other risks is included in NetEase's filings with the SEC and announcements on the website of the Hong Kong Stock Exchange. NetEase does not undertake any obligation to update this forward-looking information, except as required under applicable law.

NetEase, Inc.

NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase") is a leading internet and game services provider centered around premium content. With extensive offerings across its expanding gaming ecosystem, the Company develops and operates some of the most popular and longest running mobile and PC games available in China and globally.

Powered by one of the largest in-house game R&D teams focused on mobile, PC and console, NetEase creates superior gaming experiences, inspires players, and passionately delivers value for its thriving community worldwide. By infusing play with culture, and education with technology, NetEase transforms gaming into a meaningful vehicle to build a more entertaining and enlightened world.

Beyond games, NetEase service offerings include its majority-controlled subsidiaries Youdao (NYSE: DAO), an intelligent learning company with industry-

leading technology, and Cloud Music (HKEX: 9899), a well-known online music platform featuring a vibrant content community, as well as Yanxuan, NetEase's private label consumer lifestyle brand.

NetEase's market-leading ESG initiatives are among the most recognized in the global media and entertainment industry, earning it inclusion in 2022 Dow Jones Sustainability World Index, 2022 Dow Jones Sustainability Emerging Markets Index, and 2023 Bloomberg Gender-Equality Index, as well as receiving an "A" rating from MSCI. For more information, please visit: http://ir.netease.com/.

MARKET SNAPSHOT

In USD

$66.2	3.2	$1.77	$3.3
billion	billion	billion

Market Cap 1	Shares Outstanding,	Basic Net Income per ADS	Net Revenues
(8/23/23)	Diluted (2Q23)	(GAAP) (2Q23)	(2Q23)

$1.1	$13.7
billion	billion

A

Net income attributable to the	Cash position 2	MSCI ESG Rating 3
Company's shareholders (GAAP)	(06/30/23)
(2Q23)

Note:

• Market Cap is calculated using the closing price on NASDAQ; Our market cap is HK$511.9 billion based on the closing price on the Hong Kong Stock Exchange

• Cash position refers to total cash and cash equivalents, current and non-current time deposits and restricted cash, as well as short-term investments balance, minus short-term and long-term loans
  3 The result is based on the latest update in December 2022

GAMES AND RELATED VALUE-ADDED SERVICES

USD million 1

Games and Related Value-added Services

Net Revenues and Gross Margin

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

-

	Gross Margin	Online Games
64.9%	66.7%	67.4%

	2,767
2,502	2,592

2Q22

1Q23

2Q23

Related VAS

100.0%

90.0%

80.0%

70.0%

60.0%

50~ .26%:0% PC & console games

40.0%

30.0%

~ 74%: mobile games

20.0%

10.0%

0.0%

Online Games	Related
92% (2Q23)	VAS

Definition of this segment was changed to include related value-added services, such as NetEase CC Live streaming service, game- related merchandise and others, as of 2Q 2022.

Note:

• US$1.00 = RMB7.2513 on June 30, 2023. Same exchange rate is applied to all years for illustrative purposes