NetEase Reports Better-Than-Expected 3Q, Citigroup Reports

Citigroup said today that NetEase (NASDAQ: NTES) reported better-than-expected 3Q results with top line beating Street by 2%, driven by solid FWJ momentum and strength of its advertising revs as a result of Asian Games sponsorship.

“Despite doubling its S&M spend during the quarter, NTES managed to outperform on the EPS, helped by a US$8m FX gain on Euro-denominated bank deposit,” Citigroup writes. “Looking forward, management commented in the press release that it plans to release the next expansion pack for FWJ in 1Q11, which should further help to maintain solid momentum for the game in 2011, in our view.”

NetEase currently trades at $39.72.