By Sherry Qin

NetEase is scheduled to report first-quarter results on Thursday. Here's what you need to know:

NET PROFIT FORECAST: The Chinese video-game giant is expected to post an 11% fall in net profit to 9.19 billion yuan, equivalent to $1.35 billion, according to the consensus estimate of 24 analysts polled by Visible Alpha.

REVENUE FORECAST: Revenue likely rose 3.3% to 29.79 billion yuan.

Analysts at Nomura reckon that the first quarter was relatively quiet for NetEase's gaming business as only a few titles were released. However, demand for legacy games, led by the PC version of "Fantasy Westward Journey," likely managed to stay resilient.

NetEase's Hong Kong-listed shares slumped 21% in the first quarter amid concerns about its earnings growth and uncertainty around its gaming pipeline. Disappointing fourth-quarter results and a lack of new releases in the first quarter weighed on investor sentiment.

WHAT TO WATCH:

--Any guidance from the company on upcoming titles will be closely watched. The release of a new game, "Sea of Remnants," expected in the third quarter, could accelerate gaming business growth in the second half of the year, Nomura said in recent note.

--Focus will also be on updates to NetEase's listing status. The company, which trades on both the Nasdaq and the Hong Kong Stock Exchange, said in March that it received a notice from index operators in Hong Kong to convert to a dual-primary listing as the majority of trading in its shares now happens in the financial hub. Analysts say that making the change would pave the way for NetEase's H-shares to be included in the Hong Kong-China Stock Connect, boosting liquidity.

--Investors will also pay attention to any comments on Apple's fee reduction. Apple recently cut commission fees charged to game developers on its China App Store. Morningstar analyst Ivan Su expects that move, plus Google lowering its Play Store service fees, to improve Chinese gaming firms' margins and lift their operating profit by low single-digit percentages this year.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

May 19, 2026 03:25 ET (07:25 GMT)

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