(Yicai) Aug. 15 -- Shares of NetEase fell after the Chinese internet giant posted worse-than-expected earnings results for the second quarter of the year, as the market had set the bar too high after a promising first quarter.

NetEase [HKG 9999] closed down 3.7 percent at HKD200.20 (USD25.60) in Hong Kong today. Its New York-listed shares [NASDAQ: NTES] declined 3.9 percent to USD129.67 yesterday. Both stocks hit new record highs on July 23.

Net profit totaled CNY8.6 billion (USD1.2 billion) in the second quarter, up 26 percent from a year earlier but down 17 percent from the first quarter, the Hangzhou-based company announced yesterday. Revenue rose 9 percent to CNY27.9 billion (USD3.9 billion) from the same period last year but shrank 3 percent from the previous quarter.

After NetEase delivered a better-than-expected performance in the first quarter, the market raised its expectations for the company's second-quarter performance, according to Dolphin Research, an analysis institution under stock trading platform Longbridge. However, the performance missed expectations at the end.

In the first quarter, NetEase reported net profit of CNY10.3 billion and revenue of CNY28.8 billion, up 35 percent and 7 percent, respectively. The market had forecast revenue of CNY28.5 billion.

NetEase's revenue from the gaming and related value-added services business jumped 14 percent to CNY22.8 billion in the three months ended June 30 from a year earlier, mainly thanks to the positive performance of mobile game Identity V and new titles Where Winds Meet and Marvel Rivals. However, the figure declined 5 percent from the previous three months.

As one of NetEase's new flagship games this year, Where Winds Meet has demonstrated steady overall performance, exceeding pre-launch expectations in terms of active users and monetization, Chief Executive Officer William Ding said during the earnings call yesterday.

NetEase has been actively investing in artificial intelligence technology, which has already yielded notable results in the company's product development and operations, Ding noted, adding that AI is expected to help create more vivid and engaging games in the future.

Youdao, NetEase's online education business, reported revenue of CNY1.4 billion, up 7 percent in the period. Revenue from online music platform NetEase Cloud Music fell 4 percent to CNY2 billion, and that from the company's innovative and other businesses plunged 18 percent to CNY1.7 billion.

Editors: Dou Shicong, Futura Costaglione