(Yicai) Agu. 25 -- Shares of NetEase fell although the Chinese gaming giant said its net profit jumped 55.8 percent in the second quarter of the year because of higher investment income and exchange gains.

NetEase's Hong Kong-listed shares [HKG: 9999] were trading down 5.3 percent at HKD155.90 (USD19.88) as of today's lunch break. In New York, the company's stock [NASDAQ: NTES] closed 4 percent down at USD98.59.

Net profit was CNY8.2 billion (USD1.1 billion) in the three months ended June 30, according to the Hangzhou-based firm's latest financial statement released yesterday. Revenue rose 3.7 percent to CNY24 billion (USD3,3 billion) in the second quarter from a year earlier.

NetEase reported investment income of CNY288 million (USD39.5 million) in the second quarter, compared with a loss of CNY707 million in the same period last year. Exchange gains increased to CNY1.5 billion from CNY865 million in the period.

Second-quarter gross profit widened 11.1% to CNY14.4 billion, mainly because of increased revenue from the operation of online games, such as Eggy Party, and decreased royalty fees related to the termination of certain licensed games.

"Players continue to revere our flagship Fantasy Westward Journey series, while embracing newer titles like Eggy Party that extend our reach in casual games," said NetEase's Chief Executive Officer William Ding. "The June releases of widely acclaimed Justice mobile game and Racing Master further showcase our endless drive to bring players innovative, first-rate games in diversified genres.

"We believe that each addition to our game portfolio validates our exceptional R&D capabilities and the broad influence our ingenuity has in the marketplace, including expanding the casual game market and altering the face of traditional massively multiplayer online games," noted Ding, who is also the company's director.

NetEase's revenue from the Cloud Music business fell 11.1 percent to CNY1.9 billion in the second quarter from the same period last year, while its gross profit margin more than doubled to 27 percent in the period. Revenue from the firm's educational technology unit Youdao soared 26.2 percent to CNY1.2 billion.

"In addition to games, our Cloud Music and Youdao businesses remain on track and are generating premium content," Ding added. "Throughout the NetEase family, we prioritize the creation of novel and high-quality products and services that grow our global appeal, elevate user experiences, and advance their respective industries."

Editor: Futura Costaglione