NetEase Inc - ADR

Strong start: revenue growth driven by games - NetEase reported RMB 30.6B total revenue in Q1’26, reflecting continued momentum in games. - Games & related value-added services: RMB 25.7B (+7% YoY); online games: RMB 25.1B (+7% YoY, +18% QoQ)—company attributes QoQ/YoY rise to higher net revenue from developed-game franchises (examples cited: *Niwena* / *Jade* / other portfolio titles mentioned in the call). - Certain monetization and live-service improvements show up in commentary on franchise longevity (consistent content delivery, innovation, and global/domal engagement).

Margin and financial strength (good): profitability improved - Gross margin increased meaningfully to 69.4% YoY (company transcript shows an apparent prior-year figure of 54.1%; for game VAS, gross margin was 74.8% vs 68.8% in the prior-year period). - Operating expenses described at about 28% of net revenue; R&D ~14.7% of net revenue (stable). - Net cash position: RMB 167.2B at March 31, 2026 (vs RMB 153.5B end of 2025) → balance-sheet strength supports capital return and investment.

Capital return: dividend + ongoing buybacks - Board approved a Q1 dividend of $0.44 per share (USD 720 per ADS). - Under the existing USD 5B share repurchase program, the company had repurchased about USD 3.1B total cost (transcript indicates ~USD 23.2M shares/units repurchased as of Mar 31, 2026, with wording imperfect but buyback activity is clearly positive).