(Yicai Global) Feb. 26 -- Shares of NetEase plunged after one of China’s leading internet firms blamed its more than 50-percent net profit decline in the fourth quarter on fluctuating forex rates and bad investments.

NetEase's stock price [NASDAQ: NTES] dropped by 7.5 percent to USD108.66 in New York yesterday and continued sliding by 3.4 percent in after-hours trading.

Non-GAAP net income fell by 56 percent to CNY1.6 billion (USD244.9 million) over the last quarter of 2020 from a year ago, the Guangzhou-based company said in its earnings report published before the market closed yesterday. Exchange losses were CNY1.8 billion and net investment loss was CNY271.9 million (USD42 million).

NetEase has approved a new share buyback program of up to USD2 billion to purchase its stock on the secondary market in the 24 months following March 2, it added.

Beyond the poor investments, the company's daily business was growing. Revenue rose by almost 26 percent to CNY19.8 billion (USD3.1 billion) from a year ago amid robust performance in gaming, search engine Youdao, and innovative fields of business, the report added.

"Our online games business continued its strong performance during 2020, propelled by the sustained and growing popularity of our diversified titles," said Chief Executive William Ding. In 2021, the company has already launched mobile game Revelation ahead of other expected new titles.

Ding criticized Chinese app stores' commissions that go as high as 50 percent, referring to the rates as "unhealthy" and "probably unsustainable." Chinese platforms should be more in synch with their International counterparts, he added.

Despite Covid-19, 2020 was not all bad for the internet sector as the report shows. For the whole year, NetEase's revenue climbed by 24 percent to CNY73 billion. Gross profit increased by almost 24 percent to CNY39 billion amid busy operations with a highlight of freemium platform NetEase Cloud Music.

NetEase splurged CNY3 billion on research and development in the fourth quarter, up by 9 percent from a quarter earlier. For the 12 months of 2020, R&D expenses equaled 14.1 percent of total revenue, falling from 14.2 percent in 2019.

Editor: Emmi Laine, Xiao Yi