HONG KONG — NetEase, the Chinese Internet giant, unveiled third quarter net profits of RMB1.0 billion ($173 million), a gain of more than 23% compared with last year, powered by its strength in online games. But earnings per share came in some 3% below market estimates and in the grey market the NASDAQ-listed stock was down some 7%.

Revenues in the July-Sept. period were RMB2.51 billion ($411 million), compared with RMB2.41 billion in the previous quarter and RMB2.04 billion in the same quarter last year.

The company which is the Chinese distributor of “World of Warcraft” said it had done well with its self-developed titles including “Fantasy Westward Journey,” “Heroes of Tang Dynasty II,” “Ghost II” and “Kung Fu Master.” It is currently beta testing Blizzard Entertainment’s “Hearthstone: Wizards of Warcraft.”

In the quarter the company moved into the instant messaging sector, challenging Tencent’s market leader WeChat with its own YiChat. Helped by the company’s 590 million email subscriber base and its massive 163.com portal, YiChat amassed 30 million subscribers between June and September.