By Sherry Qin

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

NET PROFIT: The Chinese videogame giant is expected to post a 35% increase in net profit to 9.135 billion yuan, equivalent to $1.27 billion, according to the consensus estimate of 18 analysts in a FactSet poll.

ADJUSTED NET PROFIT: Excluding share-based compensation expenses, adjusted net profit is expected at 9.58 billion, according to FactSet, compared with 7.82 billion yuan in the year-earlier period.

REVENUE FORECAST: Revenue likely rose 11% to 28.35 billion yuan, according to FactSet. Nomura analysts said the market is likely too bullish about NetEase's second-quarter results after a strong first-quarter beat. They expect 9% revenue growth, below the market consensus.

NetEase's Hong Kong-listed shares have climbed nearly 50% so far this year after gaining 33.5% in the second quarter. Analysts have said that NetEase's stock could be an appealing choice during periods of market volatility, as its online gaming business isn't exposed to macro weakness or geopolitical headwinds.

WHAT TO WATCH:

--Investors will pay attention to NetEase's game launch schedule in the second half of 2025. NetEase highlighted new game reveals, including "Sea of Remnants" and "Destiny: Rising," at a recent games exhibition. That could suggest an accelerated launch schedule into the rest of the year, Citi analysts said in a note.

--NetEase could experience margin volatility as it grows its cross-platform and international titles, which have lower margins, according to Daiwa analysts. However, its overall profitability will likely remain stable through disciplined cost and resource management, they wrote in a note. The gaming company is prioritizing high-potential and long-lifecycle products and looks well-positioned to benefit from industry trends that are moving toward blockbuster franchises and cross-platform games, the analysts said.

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

(END) Dow Jones Newswires

August 12, 2025 23:38 ET (03:38 GMT)

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