NetEase shares jump after positive Q2 Results 

NetEase inc. (NTES) shares jumped yesterday +8.70% after the company announced an increase in revenues of 12.9% in the second quarter of 2021 compared with last year’s same quarter. However, 33% increase in operating expenses hurt the company’s bottom line as net profits recorded this quarter were 20% lower compared to same period in 2020.

NetEase, Inc. is a Chinese Internet technology company known as the second-largest gaming player in China behind Tencent and makes nearly 79% of revenue from online games. The company is trying to grow in other areas such as education and music streaming.

NetEase’s latest financial results were published one day after China’s National Press and Public Administration announced new rules limiting gamers under 18 years old to just three hours of gameplay per week. During the earnings call, the company reassured its investors that less than 1% of our revenue comes from minors.

Due to the policy risks that may haunt Chinese gaming stocks, investors can hold NTES through Gaming ETFs with exposure to global gaming platforms and developers. Among them is the Global X Video Games & Esports ETF (HERO), an ETF with $567 million in assets and 5.38% exposure to NetEase. HERO’s highest exposure is U.S.A with 40%, followed by Japan and South Korea with 22% and 14% respectively. China comes in at fourth with roughly 11% in weight.

For maximum exposure to NetEase with an ETF, investors can check out Global X MSCI China Communication Services ETF (CHIC) with 10.2% exposure to the gaming giant and full allocation to Chinese Equities in the Communication Services Sector.

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