Core Viewpoint - NetEase reported strong performance in Q1 2025, with net revenue of 28.829 billion RMB, reflecting a year-on-year growth of 7.4% and a quarter-on-quarter growth of 7.8% [1][2] Group 1: Financial Performance - NetEase's Q1 2025 gross profit reached 18.479 billion RMB, marking an 8.6% increase year-on-year, with a gross margin of 64.1% [2] - The company's operating expenses for Q1 2025 were 8.038 billion RMB, a decrease of 14.4% year-on-year, attributed to reduced marketing spending in the gaming sector [2] - Net profit attributable to shareholders for Q1 2025 was 10.301 billion RMB, showing a significant year-on-year increase of 34.9% [2] Group 2: Business Segments - Revenue from games and related value-added services in Q1 2025 was 24.048 billion RMB, accounting for approximately 83.4% of total revenue, with a year-on-year growth of 12.1% [1] - New game releases, such as "Yan Yun Shi Liu Sheng" and "Jie Wai Kuang Chao," contributed to the revenue growth, with the former surpassing 30 million registered players and the latter achieving a peak of over 110,000 concurrent players shortly after launch [1] - Non-gaming segments, including Youdao, NetEase Cloud Music, and other businesses, experienced revenue declines of 6.7%, 8.4%, and 17.6% respectively [1] Group 3: Market Reaction - Following the earnings announcement, NetEase's stock price rose by 1.2% to 168.1 HKD per share, with a market capitalization of 532.5 billion HKD [2] - In pre-market trading in the US, NetEase's stock price increased by 4.85%, reaching 112.3 USD per share [2]

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Financial Performance - NetEase's total net revenues for 1Q25 were $3.973 billion, a 7.4% increase year-over-year[39] - Games and related value-added services contributed $3.314 billion in net revenues for 1Q25, up 12.1% year-over-year[39] - Net income attributable to the company's shareholders for 1Q25 was $1.42 billion, a 34.9% increase year-over-year[39] - Basic net income per ADS (GAAP) for 1Q25 was $2.24[9] - The company's net cash position as of March 31, 2025, was $18.9 billion[9] Business Segments - Youdao's net revenues for 1Q25 were $179 million, a 6.8% decrease year-over-year[39] - NetEase Cloud Music's net revenues for 1Q25 were $256 million, reflecting an 8.5% decrease year-over-year[39] - Innovative businesses and others generated $224 million in net revenues for 1Q25, a 17.5% decrease year-over-year[39] Games Highlights - Online games accounted for 98% of games and related value-added services net revenues in 1Q25[12] - Where Winds Meet surpassed 30 million registered players as of March 2025[18] - Once Human mobile game quickly claimed the No1 position on the iOS download charts in more than 160 regions upon its April 2025 launch[18]

Market Overview - Major U.S. stock index futures are down, with Dow futures falling by 0.44%, S&P 500 futures down by 0.65%, and Nasdaq futures decreasing by 0.83% [1] - Pre-market trading shows a broad decline in prominent tech stocks, including Nvidia, AMD, and Intel, each down approximately 1%, and Tesla down about 2% [1] - Chinese concept stocks are also mostly down in pre-market trading, with JD.com down around 3%, NIO down nearly 2%, Pinduoduo down over 1.3%, and Alibaba and Xpeng down about 1% [1] Company Performance - Cisco Systems saw a pre-market increase of nearly 4%, reporting Q3 FY2025 revenue of $14.1 billion, an 11% year-over-year growth [1] - CoreWeave, a cloud services startup backed by Nvidia, experienced a pre-market drop of nearly 10% due to profit decline linked to accelerated AI investment plans [1] - Gaotu reported a pre-market increase of over 10%, with Q1 FY2025 revenue reaching 1.493 billion yuan, a 57.7% year-over-year increase, and an adjusted net profit of approximately 140 million yuan, resulting in a net profit margin of 9.2% [1] - NetEase saw a pre-market rise of nearly 4%, with Q1 FY2025 revenue of $28.8 billion, a 7.4% year-over-year increase, exceeding analyst expectations [1] Regulatory Environment - Tesla's stock is down approximately 3% in pre-market trading, potentially ending a six-day winning streak, as U.S. regulators intensify scrutiny of its Robotaxi plan, with the National Highway Traffic Safety Administration sending a list of questions as part of an ongoing investigation into Tesla's Full Self-Driving software [2]

Core Insights - NetEase-S (09999) reported a net revenue of RMB 28.8285 billion for Q1 2025, representing a year-on-year increase of 7.4% [1] - The gross profit for the same period was RMB 18.5 billion (USD 2.5 billion), up 8.6% year-on-year [1] - Net profit attributable to shareholders reached RMB 10.301 billion (USD 1.4 billion), marking a significant year-on-year growth of 34.94% [1] - Basic earnings per share were USD 0.45, with a dividend of USD 0.1350 per share for Q1 2025 [1] Revenue Breakdown - The net revenue from games and related value-added services was RMB 24 billion (USD 3.3 billion), compared to RMB 21.2 billion and RMB 21.5 billion in the previous quarter and the same quarter last year, respectively [1] - Online games accounted for approximately 97.5% of this segment's net revenue, an increase from 96.7% in the previous quarter and 95.2% year-on-year [1] - The increase in revenue was driven by the performance of existing games like "Identity V" and new releases such as "Yanyun Sixteen Sounds" and "Marvel Showdown" [1] Other Business Segments - Youdao's net revenue for Q1 2025 was RMB 1.3 billion (USD 178.9 million), unchanged from the previous quarter but down from RMB 1.4 billion year-on-year, primarily due to a focus on long-term core business development [2] - NetEase Cloud Music reported net revenue of RMB 1.9 billion (USD 256.1 million), consistent with the previous quarter but down from RMB 2 billion year-on-year, mainly due to a decrease in social entertainment service revenue [2] - The net revenue from innovation and other businesses was RMB 1.6 billion (USD 223.8 million), down from RMB 2.3 billion in the previous quarter and RMB 2 billion year-on-year, attributed to declines in revenue from NetEase Yanxuan, advertising services, and other businesses [2] Management Commentary - The CEO of NetEase emphasized the company's strong performance in Q1 2025, attributing it to continuous innovation and the launch of new products [3] - The diversified layout of the company is resonating with global players, and the strong performance of new games and quality content updates are enhancing the longevity of existing games [3] - The company remains committed to high-quality, technology-driven innovation across its various business segments, aiming to strengthen user connections and create long-term value [3]

Core Insights - Net revenue for the first quarter of 2025 reached RMB 28.8 billion (USD 4 billion), representing a year-on-year increase of 7.4% [1] - The gaming and related value-added services generated net revenue of RMB 24 billion (USD 3.3 billion), up 12.1% year-on-year [1] - The company reported a gross profit of RMB 18.5 billion (USD 2.5 billion), an increase of 8.6% year-on-year [1] Financial Performance - Net income attributable to shareholders was RMB 10.3 billion (USD 1.4 billion) [1] - Non-GAAP net income attributable to shareholders was RMB 11.2 billion (USD 1.5 billion) [1] - Basic earnings per share were USD 0.45, with non-GAAP basic earnings per share at USD 0.49 [1] Dividend Announcement - The board approved a dividend of USD 0.1350 per share for the first quarter of 2025 [1] CEO Commentary - The CEO highlighted the company's strong performance in 2025, attributing it to continuous innovation and the launch of new products [2] - The gaming segment showed robust performance, with strong content updates and gameplay enhancements contributing to the success of long-standing games [2] - The company remains focused on high-quality, technology-driven innovation across its various business segments, including Youdao and other services [2]

Financial Performance - NetEase's net revenue for Q1 2025 was RMB 28.8 billion (USD 4 billion), an increase of 7.4% year-over-year[6] - Revenue from games and related value-added services reached RMB 24 billion (USD 3.3 billion), up 12.1% year-over-year[6] - Youdao's revenue was RMB 1.3 billion (USD 178.9 million), a decrease of 6.7% year-over-year[6] - NetEase Cloud Music's revenue was RMB 1.9 billion (USD 256.1 million), down 8.4% year-over-year[6] - Gross profit for Q1 2025 was RMB 18.5 billion (USD 2.5 billion), an increase of 8.6% year-over-year[6] - Total operating expenses were RMB 8 billion (USD 1.1 billion), a decrease of 14.4% year-over-year[6] - Net profit attributable to shareholders was RMB 10.3 billion (USD 1.4 billion), with a non-GAAP net profit of RMB 11.2 billion (USD 1.5 billion)[6] - In Q1 2025, the net profit attributable to shareholders was RMB 10.3 billion (USD 1.4 billion), an increase from RMB 8.8 billion in the previous quarter and RMB 7.6 billion year-over-year[18] - The basic earnings per share for Q1 2025 was USD 0.45, compared to USD 0.38 in the previous quarter and USD 0.33 in the same quarter last year[18] - The company’s non-GAAP net profit for Q1 2025 was RMB 11.2 billion (USD 1.5 billion), up from RMB 9.7 billion in the previous quarter and RMB 8.5 billion year-over-year[18] - The non-GAAP net profit attributable to shareholders for the first quarter of 2024 was RMB 8,510,844 thousand, reflecting a strong operational performance[37] Cash Flow and Assets - As of March 31, 2025, the company had a net cash balance of RMB 137 billion (USD 18.9 billion), up from RMB 131.5 billion at the end of 2024[20] - The operating cash flow for Q1 2025 was RMB 12.1 billion (USD 1.7 billion), a decrease from RMB 13 billion in the previous quarter and an increase from RMB 9.6 billion year-over-year[20] - Cash and cash equivalents decreased from RMB 51.38 billion to RMB 41.75 billion, a decline of about 18.5%[31] - Total current assets increased from RMB 153.32 billion to RMB 157.67 billion, a growth of about 2.2%[31] - Total assets increased from RMB 195.99 billion on December 31, 2024, to RMB 200.86 billion on March 31, 2025, reflecting a growth of approximately 2.2%[31] - Total liabilities decreased slightly from RMB 53.50 billion to RMB 52.99 billion, indicating a reduction of approximately 0.9%[31] - The company reported a total equity of RMB 142.41 billion as of December 31, 2024, increasing to RMB 147.78 billion by March 31, 2025, representing a growth of about 3.1%[31] - Short-term investments rose significantly from RMB 10.76 billion to RMB 17.36 billion, an increase of approximately 61.5%[31] Shareholder Returns - The company approved a dividend of USD 0.1350 per share for Q1 2025, with the payment date expected around June 10, 2025[21] - The share repurchase program, initiated on January 10, 2023, has seen the company buy back approximately 21.6 million ADS for a total of about USD 1.9 billion as of March 31, 2025[22] Market Position and Strategy - The company continues to focus on expanding its gaming ecosystem and developing new products, leveraging its strong R&D capabilities[26] - The company highlighted ongoing risks related to market growth and competition in the online gaming sector, which could impact future performance[28] - The company emphasized the importance of non-GAAP financial metrics for investors to assess operational performance and future prospects[30] - The company is focused on maintaining its market position and developing innovative online services to adapt to market trends[28] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[32] - The company plans to continue expanding its market presence and investing in new product development in the upcoming quarters[34] Game Performance - The number of registered players for "Yan Yun Shi Liu Sheng" exceeded 30 million by March 2025[9] - The new game "Jie Wai Kuang Chao" ranked sixth on the Steam global sales chart within three days of its launch[9] - Youdao achieved a record high operating profit in Q1 2025, maintaining positive operating profit momentum over recent quarters[9] Conference and Future Outlook - The management will discuss quarterly performance and future outlook in a conference call scheduled for May 15, 2025[25]

Core Insights - Net revenue from gaming and related value-added services for NetEase reached RMB 24 billion (USD 3.3 billion), representing a year-on-year growth of 12.1% compared to the same period in 2024 [1] Group 1: Financial Performance - Youdao's net revenue was RMB 1.3 billion (USD 178.9 million), showing a decline of 6.7% year-on-year compared to 2024 [1] - NetEase Cloud Music reported net revenue of RMB 1.9 billion (USD 256.1 million), which is a decrease of 8.4% year-on-year compared to 2024 [1] - Revenue from innovative businesses and others amounted to RMB 1.6 billion (USD 223.8 million), reflecting a decline of 17.6% year-on-year compared to 2024 [1]

Core Viewpoint - NetEase, Inc. reported strong financial results for the first quarter of 2025, driven by robust performance in its gaming segment and ongoing innovation across its business lines [1][5][10]. Financial Highlights - Net revenues for Q1 2025 were RMB 28.8 billion (US$ 4.0 billion), a 7.4% increase year-over-year [7][10]. - Net revenues from games and related value-added services reached RMB 24.0 billion (US$ 3.3 billion), marking a 12.1% increase compared to the same quarter of 2024 [8][10]. - Gross profit for the quarter was RMB 18.5 billion (US$ 2.5 billion), an increase of 8.6% year-over-year [13][10]. - Net income attributable to shareholders was RMB 10.3 billion (US$ 1.4 billion), up from RMB 7.6 billion in Q1 2024 [17][10]. - Non-GAAP net income attributable to shareholders was RMB 11.2 billion (US$ 1.5 billion), reflecting a significant increase from RMB 8.5 billion in the same quarter of the previous year [18][10]. Operational Highlights - The company launched several successful titles, including "Marvel Rivals" and "Where Winds Meet," which contributed to increased engagement and revenue [10][8]. - Youdao's net revenues were RMB 1.3 billion (US$ 178.9 million), consistent with the previous quarter but down 6.7% year-over-year due to a focus on core services [9][10]. - NetEase Cloud Music reported revenues of RMB 1.9 billion (US$ 256.1 million), a decrease of 8.4% compared to the same quarter of 2024 [11][10]. - Innovative businesses and others generated RMB 1.6 billion (US$ 223.8 million), down 17.6% year-over-year, primarily due to reduced revenues from advertising services [12][10]. Cash Flow and Dividend - As of March 31, 2025, the company's net cash totaled RMB 137.0 billion (US$ 18.9 billion), an increase from RMB 131.5 billion at the end of 2024 [20][10]. - The board approved a dividend of US$ 0.1350 per share for Q1 2025, payable in June 2025 [21][10]. Share Repurchase Program - The company has repurchased approximately 21.6 million ADSs for a total cost of US$ 1.9 billion under its ongoing share repurchase program [24][10].

Group 1 - The Hang Seng Index fell by 0.25%, down 59 points, closing at 23,581 points, while the Hang Seng Tech Index decreased by 0.62% [1] - Hong Kong's stock market saw a trading volume of HKD 110.1 billion in the morning session [1] Group 2 - BYD Co., Ltd. (01211) increased by 3.53%, with new energy vehicle sales in the first four months rising by 46.98% year-on-year, surpassing Toyota in Singapore [2] - NetEase-S (09999) rose by 1.8% ahead of its quarterly report release and an annual product exhibition next week [2] - Weimob Group (02013) surged by 20% following the establishment of an e-commerce product department by WeChat, indicating potential in AI development and WeChat small store business [2] - Tencent Music Entertainment Group (01698) rose over 7% post-earnings, with a steady increase in ARPPU and a 22.8% year-on-year growth in net profit for the first quarter [2] - Yixin Group (02858) saw an intraday increase of over 7%, with financing amounts facilitated by its fintech platform rising by 56.5% year-on-year in the first quarter [2] - China Tobacco Hong Kong (06055) increased by over 7%, signing a contract with Mengkun to boost its duty-free cigarette business, with potential for resource integration within the China Tobacco system [2] - Junshi Biosciences (02696) rose by over 6% after granting Sandoz AG rights for the development, production, and commercialization of product HLX13 [2] - Bruker Corporation (00325) saw a 6.48% increase in early trading, with a recent surge in new product launches indicating potential for high growth [2] - Dekang Agriculture and Animal Husbandry (02419) increased by over 11%, reporting sales revenue of HKD 1.867 billion from live pig sales in April, leading the industry in per-head profitability [2] - Xindong Company (02400) rose over 6% with the international launch of "Yise" scheduled for June, expected to further drive performance growth [2] - Beike-W (02423) fell by 4.14%, with a quarterly report set to be disclosed today, and institutions remain cautious about its profit outlook [2] Group 3 - MicroPort Scientific Corporation-B (02252) fell by 3.63% after announcing a discounted placement to raise funds, with the controlling shareholder cashing out nearly HKD 470 million [3]