NetEase (09999.HK) will announce its second-quarter results on Thursday. According to a FactSet survey of nine analysts, NetEase's second-quarter net profit is expected to increase by 13% year-on-year to RMB 9.72 billion, while adjusted net profit is expected to increase by 7.3% year-on-year to RMB 10.23 billion. Nomura analysts cautioned that due to NetEase's holdings in Alibaba and Pinduoduo, related investment losses may widen, thus the actual net profit may be lower than expected. NetEase's second-quarter revenue is expected to increase by 4.3% year-on-year to RMB 29.1 billion, mainly supported by the solid performance of long-running games such as *Fantasy Westward Journey* and *Egg Party*. Furthermore, Nomura analysts predict that NetEase's game *Forgotten Sea*, launched in July, will generate monthly revenue of RMB 200 million to 300 million, potentially accelerating the growth of NetEase's game revenue in the second half of the year. According to Citigroup, NetEase currently has 57 games in development, of which 23 have been approved for release in China. Updates to the release schedule for new games by management could be an additional catalyst for the share price.
