By Sherry Qin

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

NET PROFIT FORECAST: The Chinese videogame giant is expected to post a 17% rise in net profit to 7.70 billion yuan, equivalent to $1.06 billion, according to the consensus estimate of 16 analysts in a FactSet poll. That would come after NetEase's net profit declined for two consecutive quarters.

ADJUSTED NET PROFIT: Excluding share-based compensation expenses, adjusted net profit is expected at 8.08 billion yuan, according to FactSet, up from 7.38 billion yuan in the same period a year earlier.

REVENUE FORECAST: Revenue likely edged 1.6% lower to 26.70 billion yuan, dragged by continued weakness for its mobile games. Nomura expects NetEase's PC game revenue to rise 25% on year on the resumption of Blizzard titles while mobile game revenue likely dropped 6% on year due to a high base following the strong debut of blockbuster title "Justice Mobile" in 2023.

NetEase's Hong Kong-listed shares have risen 19% so far this year after falling 7.6% in the last quarter in 2024. Investor sentiment has been buoyed by the homegrown AI startup DeepSeek's breakthrough last month, which has broadly lifted tech stocks listed in Hong Kong.

WHAT TO WATCH:

-- NetEase's online gaming business should have bottomed out in the third quarter and its revenue growth could improve continuously from the fourth quarter, Nomura analysts said in a recent note. The addition of promising new titles and a normalized base effect for some of its key titles should boost its top line in 2025, they add.

-- NetEase launched two new titles-- "Where Winds Meet" and "Marvel Rivals"--in December. Analysts have recently noted that the success of "Marvel Rivals" together with contributions of "Where Winds Meet" should pave the way for stronger growth momentum in 2025. Jefferies expects NetEase's overall gaming revenue to grow 8% in 2025, with PC games expected to grow about 25%.

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

(END) Dow Jones Newswires

February 17, 2025 23:28 ET (04:28 GMT)

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