RESEARCH

MorganStanley

October20,202504:00AMGMT

ChinaInternetandOtherServices|AsiaPacific

3Q25EarningsPreview

Weexpectanoverallsolidsetofresultsin3Q25earningsfor

theonlineentertainmentandOTAsector.WebelievedefensivenameslikeNetEaseandTMEtooutperformamidtradetensions.

KeyTakeaways

■Herearethekeyfocusgoinginto3Qearnings:

■NetEase's3Q25revenue/grossingtogaugeFW'snewrunrate.

■TCOM's4Q25marginguidanceisafirstcheckpointofpotentialnormalizationofoverseasmarketingintensity.

■TMEislikelytosharerelativedetailed2026outlook,givengoodvisibility.

■Kuaishou'strafficandmonetizationsequentialgrowthtoevaluateitsnewAlrecommendationsystemOneRec.

NetEase(OW):Weforecast15%gamerevenuegrowthand26%Non-GAAPprofitgrowth.FWJ'sfree-to-playversion'sstrongperformanceiswidelyknownbuthardtoquantify,givenitisaPCgame.Weobservedlimited2025revenueconsensus

upwardrevisionpost2Qearnings,sowebelievetheriskisskewedtotheupside.

TME(OW):Our3Qforecastisinlinewithguidance,butwebelieveriskisskewedtotheupsideforothermusicrevenue,duetoconcertseasonality.TMEsharednext

yearoutlookamid3Qearningsinthepasttwoyears,sowethinkthekeythingto

watchin3Q25earningsis2026profitguidance(consensusofRmb11.2bn).Giventheuncertaintyinconcerts'contribution,absoluteprofitismoreimportantthanmargin.

TCOM(OW):Our3Qbottom-Lineforecastisatthehigherendofguidancerange.

WeexpectTCOM'sYoYOPMcontractionwillcometoaminimallevelin3Q(~1ppt),andOPMtoexpandslightlyin4Qfromalowbase.Thisiscriticaltoevaluate2026consensusforecastofareturnofoperatingleverage.Thecommentonthe

competitionfromFliggyisanotherkeyfocus.

Tongcheng(OW):Weexpect13%coreOTArevenuegrowthand14%profitgrowth.DespitetheclosingofWandaHotelMgmtacquisition,wethinkmanagement's

commentsonsynergywillbeavailableatthefull-yearresultratherthanat3Q.

Kuaishou(EW):MSeisinlinewith3Qguidance,andweexpectthecompanyto

raiseitsfull-yearprofitguidanceby3-5%onabetterrunrate.Klingremainsatthecenterofmarketdebate,especiallyaftertherecentstrongperformanceofKling2.5turbo,butmorepeersarecomingtocompete.Wethinktrafficandmonetization'smarginalchangeunderthenewOneRecAlrecommendationmodelwillbeeven

moreimportantthanKling.

Bilibili(EW):Weforecast20%growthinadsanda16%declineingamerevenue.Weforecastan8%non-GAAPnetmargin(Rmb613mnprofit)andthinkriskis

skewedtotheupside,duetoarelativelylowbase.

IDEA

MORGANSTANLEYASIALIMITED+

YangLiu

EquityAnalyst

+8522239-1911

YangLiu@

TomTang

EquityAnalyst

+8523963-1860

+8522848-6918

Tom.Tang@

GaryYu

EquityAnalyst

Gary.Yu@

CHINAINTERNETANDOTHERSERVICES

AsiaPacific

IndustryViewAttractive

MorganStanleydoesandseekstodobusinesswith

companiescoveredinMorganStanleyResearch.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofMorganStanley

Research.InvestorsshouldconsiderMorganStanley

Researchasonlyasinglefactorinmakingtheirinvestmentdecision.

Foranalystcertificationandotherimportantdisclosures,refertotheDisclosureSection,locatedattheendofthisreport.

+=Analystsemployedbynon-U.S.affiliatesarenotregisteredwithFINRA,maynotbeassociatedpersonsofthemember

andmaynotbesubjecttoFINRArestrictionson

communicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalystaccount.

2

IDEA

MorganStanleyIRESEARCH

Previewtoearnings

FocusKPIFocusKPISurpriseLikelyimpacttoconsensusEPS*

KuaishouTechnology1024.HK

Klingrevenuegrowth-In-line-Largelyunchanged

·Weforecastrevenuetogrow14%YoYdrivenby13%YoYadgrowthand37%YoYotherrevenuegrowth.

·WeforecastKlingrevenueofRmb300mn.

·Weforecastnon-IFRSnetprofitgrowthof20%YoY

TGroupLtdTCOM.O

Non-GAAPoperatingmargin-In-line-Largelyunchanged

·Weforecastnetrevenuetogrow15%YoYwith10-12%YoYgrowthindomesticandoutboundand30%+growthininternationalrevenue.

·Weforecastnon-gaapoperatingprofittogrow7%YoYwith32%margin.

TongchengTraveHoldings0780.HK

Netprofitgrowth-In-line

·Weforecast3Q25revenuetogrow9%YoYwith13%YoYgrowthin

·Weforecastnon-IFRSoperatingprofittogrow13%YoY.

·Weforecastnetprofittogrow14%YoY.

個Modestrevisionhigher

hoteland8%growthintransportation.

BilibiliIncBILI.O

Netprofitgrowth-In-line-Largelyunchanged

·Weforecast3Q25revenuetogrow5%YoYwithgamerevenuedown16%YoY

·Weforecastnon-GAAPnetprofittogrow160%YOYtoRmb613mnoffalowbase.

·Weseeupdateongamepipelineandfeedbackaskey.

NetEase,IncNTES.0

Gamingrevenuegrowth個Likelyupsidesurprise-Largelyunchanged

·Weforecastonlinegamesrevenuetogrow15%YoYandnetrevenuetogrow12%YoY.

·Weforecastnon-GAAPnetprofitto26%YoY.

TencentMusicEntertainmentGroupTME.N

Othermusicrevenuegrowth個Likelyupsidesurprise-Largelyunchanged

·Weforecast3Q25revenuetogrow17%yoYtoRmb8.2bnwith17%YoYgrowthinsubscriptionand35%YoYgrowthinothermusicrevenue

·Weforecatnetprofittogrow28%yoYtoRmb2.2bn.

*LikelyimpacttoconsensusEPSisforthenext12monthsSource:Companydata,MorganStanleyResearch

MorganStanley

RESEARCH

IDEA

3Q25preview

Exhibit1:Kuaishou:3Q25preview

Incomestatement(Rmbmn)

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

3Q25EQoQ

3Q25EYoY

Livestreaming

8,575

9,302

9,338

9,846

9,814

10,044

9,729

-3%

4%

GrowthYoY

-8%

-7%

-4%

-2%

14%

8%

4%

Onlinemarketingservices

16,650

17,515

17,634

20,620

17,977

19,765

19,957

1%

13%

GrowthYoY

27%

22%

20%

13%

8%

13%

13%

Otherservices(ECmainly)

4,183

4,158

4,159

4,918

4,817

5,237

5,704

9%

37%

GrowthYoY

48%

21%

18%

14%

15%

26%

37%

Totalrevenue

29,408

30,975

31,131

35,384

32,608

35,046

35,391

1%

14%

Costofrevenue

(13,288)

(13,840)

(14,217)

(16,261)

(14,816)

(15,542)

(15,904)

2%

12%

Revenuesharing

(8,339)

(8,731)

(8,873)

(10,334)

(9,942)

(10,542)

(10,557)

0%

19%

As%ofrevenue

-28.4%

-28.2%

-28.5%

-29.2%

-30.5%

-30.1%

-29.8%

0.3ppt

-1.3ppt

Bandwidthcosts

(1,399)

(1,370)

(1,465)

(1,527)

(1,477)

(1,335)

(1,390)

4%

-5%

As%ofrevenue

-4.8%

-4.4%

-4.7%

-4.3%

-4.5%

-3.8%

-3.9%

-0.1ppt

0.8ppt

D&A(datacenter)

(1,544)

(1,586)

(1,624)

(1,713)

(1,235)

(1,406)

(1,510)

7%

-7%

Paymentprocessingcosts

(596)

(708)

(669)

(846)

(768)

(800)

(845)

6%

26%

Others

(1,410)

(1,445)

(1,586)

(1,841)

(1,394)

(1,459)

(1,602)

10%

1%

Grossprofit

16,120

17,135

16,914

19,123

17,792

19,504

19,487

0%

15%

Grossmargin

54.8%

55.3%

54.3%

54.0%

54.6%

55.7%

55.1%

-0.6ppt

0.7ppt

Selling&marketing

(9,384)

(10,040)

(10,364)

(11,317)

(9,897)

(10,503)

(11,039)

5%

7%

Promotionandadvertising

(8,757)

(9,447)

(9,777)

(10,671)

(9,354)

(9,935)

(10,476)

5%

7%

Others

(627)

(593)

(587)

(646)

(543)

(568)

(563)

-1%

-4%

General&administrative

(462)

(792)

(796)

(866)

(828)

(897)

(855)

-5%

7%

Research&development

(2,843)

(2,805)

(3,100)

(3,451)

(3,298)

(3,400)

(3,574)

5%

15%

Others

563

408

465

779

490

585

516

Operatingprofit

3,994

3,906

3,119

4,268

4,259

5,289

4,535

-14%

45%

Operatingmargin

13.6%

12.6%

10.0%

12.1%

13.1%

15.1%

12.8%

-2ppt

3ppt

Interestincome,net

114

66

37

19

(24)

(54)

(54)

0%

-246%

Non-operatingitems

(3)

(19)

(6)

(1)

2

(12)

(12)

Profitbeforetax

Taxexpenses/(benefits)

4,105

15

3,953

27

3,150

120

4,286

(312)

4,237

(258)

5,223

(301)

4,469

(402)

-14%

42%

Profitaftertax

4,120

3,980

3,270

3,974

3,979

4,922

4,067

-17%

24%

Netmargin

14.0%

12.8%

10.5%

11.2%

12.2%

14.0%

11.5%

-3ppt

1ppt

DilutedEPADS(Rmb)

0.94

0.90

0.75

0.88

0.91

1.13

0.93

-17%

25%

Non-IFRSmeasures

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

EBITDA

5,979

6,344

5,578

6,869

6,434

7,715

7,106

-8%

27%

Operatingmargin

20.3%

20.5%

17.9%

19.4%

19.7%

22.0%

20.1%

-1.9ppt

2.2ppt

Operatingincome

4,262

4,605

3,797

4,995

4,860

5,985

5,215

-13%

37%

Operatingmargin

14.5%

14.9%

12.2%

14.1%

14.9%

17.1%

14.7%

-2.3ppt

2.5ppt

Netincome

4,388

4,679

3,948

4,701

4,580

5,618

4,747

-16%

20%

Netmargin

14.9%

15.1%

12.7%

13.3%

14.0%

16.0%

13.4%

-2.6ppt

0.7ppt

Opexas%ofrevenue

41.2%

42.7%

44.3%

42.0%

41.5%

40.6%

42.2%

1.7ppt

-2.1ppt

S&Mas%ofrevenue

31.8%

32.2%

33.1%

31.8%

30.2%

29.8%

31.0%

1.2ppt

-2.1ppt

G&Aas%ofrevenue

1.4%

2.1%

2.1%

2.1%

2.2%

2.1%

2.0%

-0.1ppt

-0.1ppt

R&Das%ofrevenue

9.0%

7.5%

8.4%

8.5%

8.9%

8.3%

8.8%

0.4ppt

0.3ppt

Source:Companydata,MorganStanleyResearchestimates.

MORGANSTANLEYRESEARCH3

4

MorganStanley|RESEARCHIDEA

Exhibit2:TME:3Q25preview

Rmbmn

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

3Q25EQoQ

3Q25E

YoY

Onlinemusicservices

5,007

5,424

5,480

5,831

5,804

6,854

6,720

-2%

23%

GrowthYoY

43%

28%

20%

16%

16%

26%

23%

Subscription

3,615

3,745

3,840

4,030

4,220

4,380

4,505

3%

17%

GrowthYoY

39%

29%

20%

18%

17%

17%

17%

Digitalsales,ads,sublicensing

1,392

1,679

1,640

1,801

1,584

2,474

2,214

-11%

35%

GrowthYoY

54%

24%

21%

12%

14%

47%

35%

Socialentertainment

1,761

1,736

1,535

1,627

1,552

1,588

1,511

-5%

-2%

GrowthYoY

-50%

-43%

-24%

-13%

-12%

-9%

-2%

As%ofrevenue

26%

24%

22%

22%

21%

19%

18%

Totalrevenue

6,768

7,160

7,015

7,458

7,356

8,442

8,230

-3%

17%

GrowthYoY

-3%

-2%

7%

8%

9%

18%

17%

Costofrevenues

3,997

4,150

4,024

4,205

4,114

4,693

4,623

-1%

15%

Grossprofit

2,771

3,010

2,991

3,253

3,242

3,749

3,608

-4%

21%

%margin

40.9%

42.0%

42.6%

43.6%

44.1%

44.4%

43.8%

-0.6ppts

1.2ppts

S&Mexpenses

187

210

220

248

199

216

230

7%

5%

G&Aexpenses

949

938

998

926

944

940

1,035

10%

4%

Totaloperatingexpenses

1,136

1,148

1,218

1,174

1,143

1,156

1,266

9%

4%

Interestincome

278

304

299

315

297

254

316

25%

6%

Othergains/(losses)

545

746

627

920

3,396

1,568

1,127

-28%

80%

Operatingprofit

1,959

2,198

2,144

2,409

4,836

2,978

2,709

-9%

26%

Shareofprofit

(18)

54

29

31

23

16

28

73%

-5%

Financecost

(30)

(26)

(97)

59

(25)

(12)

(29)

140%

-70%

Profitbeforetax

1,911

2,226

2,076

2,499

4,834

2,982

2,708

-9%

30%

%margin

28.2%

31.1%

29.6%

33.5%

65.7%

35.3%

32.9%

-2.4ppts

3.3ppts

Incometaxexpense

381

432

367

423

446

515

487

-5.4%

33%

%effectivetaxrate

19.9%

19.4%

17.7%

16.9%

9.2%

17.3%

18.0%

0.7ppts

0.3ppts

Profitaftertax

1,530

1,794

1,709

2,076

4,388

2,467

2,220

-10%

30%

Non-controllinginterests

108

112

126

119

97

58

189

225%

50%

Netprofit

1,422

1,682

1,583

1,957

4,291

2,409

2,032

-15.7%

28.3%

%margin

21.0%

23.5%

22.6%

26.2%

58.3%

28.5%

24.7%

-3.9ppts

2.1ppts

DilutedEPADS(Rmb)

0.91

1.07

1.01

1.25

2.77

1.55

1.31

-15.7%

30%

Non-IFRS

Grossprofit

2,865

3,101

3,083

3,344

3,333

3,839

3,704

-4%

20%

Margin

42.3%

43.3%

43.9%

44.8%

45.3%

45.5%

45.0%

-0.5ppts

1.1ppts

Operatingprofit

1,938

2,136

2,051

2,345

2,370

2,850

2,662

-7%

30%

Margin

28.6%

29.8%

29.2%

31.4%

32.2%

33.8%

32.3%

-1.4ppts

3.1ppts

Netprofit

1,704

1,873

1,814

2,280

2,124

2,574

2,300

-11%

27%

GrowthYoY

21%

22%

29%

45%

25%

37%

27%

Margin

25.2%

26.2%

25.9%

30.6%

28.9%

30.5%

27.9%

-2.5ppts

2.1ppts

As%ofrevenue

S&Mexpenses

2.5%

2.7%

2.9%

3.1%

2.5%

2.4%

2.6%

0.2ppts

-0.3ppts

G&Aexpenses

11.2%

10.7%

11.8%

10.3%

10.6%

9.3%

10.1%

0.7ppts

-1.7ppts

DilutedEPADS

1.09

1.19

1.16

1.46

1.37

1.66

1.48

-10.7%

28.0%

Operatingdata

MAUs(mn)

Onlinemusicservices

578

571

576

556

555

553

553

0.0%

-4.0%

GrowthYoY

-2%

-4%

-3%

-3%

-4%

-3%

-4%

Payingusers(mn)

Onlinemusicservices

113.5

117.0

119.0

121.0

122.9

124.4

125.7

1.0%

5.6%

GrowthQoQ

Payingratio

6.8

3.5

2.0

2.0

1.9

1.5

1.3

Onlinemusicservices

ARPPU(Rmb/month)

19.6%

20.5%

20.7%

21.8%

22.1%

22.5%

22.7%

1.0%

10.0%

Onlinemusicservices

10.6

10.7

10.8

11.1

11.4

11.7

11.9

1.8%

11.1%

GrowthYoY

16%

10%

4%

4%

8%

10%

11%

Source:Companydata,MorganStanleyResearchestimates.

MorganStanleyIRESEARCHIDEA

Exhibit3:TCOM:3Q25preview

Rmbmn1Q242Q243Q244Q241Q252Q253Q25E

3Q25EQoQ

3Q25E

YoY

Accommodationreservation

4,496

5,136

6,802

5,178

5,541

6,225

7,958

GrowthYoY

Transportationticketing

29%

5,000

20%

4,871

22%

5,650

33%

4,780

23%

5,418

21%

5,397

17%

6,215

GrowthYoY

Packagedtour

20%

883

1%

1,025

5%

1558

16%

870

8%

947

11%

1,079

10%

1,714

GrowthYoY

CorporatetravelGrowthYoY

129%

511

15%

42%

633

8%

17%

656

11%

24%

702

11%

7%

573

12%

5%

692

9%

10%

722

10%

Others

GrowthYoY

1,031

39%

1,123

31%

1,234

41%

1,238

25%

1,371

33%

1,471

31%

1,604

30%

28%17%

15%10%

59%10%

4%10%

9%30%

Grossrevenue11,92112,78815,90012,76813,85014,86418,213

Businesstaxandsurcharges(16)(16)(27)(24)(20)(21)(20)

23%15%

Netrevenue11,90512,77215,87312,74413,83014,84318,193

23%15%

GrowthYoY29%14%16%23%16%16%15%

Costofrevenues(2,238)(2,312)(2,800)(2,640)(2,705)(2,818)(3,500)

24%25%

GrossProfit9,66710,46013,07310,10411,12512,02514,693

22%12%

Grossmargin

81.2%

81.9%

82.4%

79.3%

80.4%

81.0%

80.8%

Productdevelopment

(3,109)

(2,993)

(3,640)

(3,397)

(3,525)

(3,500)

(4,186)

Salesandmarketing

(2,312)

(2,835)

(3,382)

(3,373)

(2,999)

(3,326)

(4,002)

GeneralandadministrativeOperatingexpenses

(931)

(6,352)

(1,077)

(6,905)

(1,045)

(8,067)

(1,033)

(7,803)

(1,038)

(7,562)

(1,097)

(7,923)

(1,181)

(9,369)

-0.3ppts-1.6ppts

20%15%

20%18%

8%13%

18%16%

Operatingincome3,3153,5555,0062,3013,5634,1025,324

30%6%

Interestincome

InterestexpenseOtherincome(net)

ProfitbeforetaxIncometaxexpenseProfitaftertax

EqutyinincomeofaffiliatesNetincome

Non-controllinginterests

Accretiontoredemptionvalue

592

(499)759

4,167(664)

3,503

822

4,325

(13)

634

(514)(183)

3,492(693)

2,799

1,089

3,888

(55)

598

(399)

1,781

6,986

(721)

6,265

558

6,823

(58)

517

(323)(137)

2,358(526)

1,832

359

2,191

(34)

640

(286)

1,137

5,054(638)

4,416(102)

4,314(37)

609

(265)

1,114

5,560

(998)

4,562

318

4,880

(34)

609

(265)

12,000

17,668

(963)

16,704

350

17,054

(58)

0%2%

0%-34%

977%574%

218%153%

-3%34%

266%167%

10%-37%

249%150%

Netincometoshareholders4,3123,8336,7652,1574,2774,84616,996

76%47%

DilutedEPADS(Rmb)

Non-GAAP

Expensesas%ofrevenueProductdevelopment

Salesandmarketing

Generalandadministrative

SBC

EBITDA

GrowthYoYMargin

OperatingprofitGrowthYoY

As%of2019

OPM

Netprofit(companydefinition)NPM

DilutedEPADS(Rmb)

6.38

1Q24

24.3%

19.1%

6.2%

0.0%

3,974

40.9%

33.4%

3,765

43.8%

274.8%

31.6%

4,05534.1%

6.00

5.57

2Q24

20.9%

21.8%

6.1%

0.0%

4,436

20.6%

34.7%

4,229

21.7%

245.0%

33.1%

4,98539.0%

7.25

9.93

3Q24

21.5%

21.1%

5.3%

0.0%

5,680

23.0%

35.8%

5,465

23.7%

207.4%

34.4%

5,96337.6%

8.75

2.906.096.9724.434Q241Q252Q253Q25E

24.9%23.9%21.8%21.6%26.2%21.4%22.1%21.7%

6.5%5.9%5.7%5.1%0.0%0.0%0.0%0.0%

2,9804,2474,8806,039

4.4%6.9%10.0%6.3%23.4%30.7%32.9%33.2%2,7604,0434,6685,874

4.3%7.4%10.4%7.5%269.8%11891.2%-1051.4%444.6%

21.7%29.2%31.4%32.3%3,0384,1885,0115,54623.8%30.3%33.8%30.5%

4.355.967.207.97

78%45%

QoQYoY

-0.2ppts0.1ppts

-0.3ppts0.6ppts-0.5ppts-0.2ppts0.0ppts0.0ppts

24%6%

0.3ppts-2.6ppts26%7%

0.8ppts-2.1ppts

11%-7%

-3.3ppts-7.1ppts

11%-9%

Source:Companydata,MorganStanleyResearchestimates.

MORGANSTANLEYRESEARCH5

MorganStanleyIRESEARCHIDEA

6

Exhibit4:Tongcheng:3Q25preview

(Rmbmn)

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

3Q25EQoQ

3Q25EYoY

Accommodationreservationservices

965

1,191

1,378

1,135

1,190

1,371

1,557

14%

13%

GrowthYoY

16%

13%

22%

29%

23%

15%

13%

GrowthYoYvs2019

97%

115%

99%

83%

419%

257%

127%

Transportationticketingservices

1,737

1,743

2,027

1,723

2,000

1,881

2,189

16%

8%

GrowthYoY

26%

17%

21%

17%

15%

8%

8%

GrowthYoYvs2019

38%

86%

78%

46%

191%

159%

107%

Others

502

592

609

599

603

755

803

6%

32%

GrowthYoY

36%

87%

24%

15%

20%

28%

32%

GrowthYoYvs2019

1323%

490%

166%

293%

575%

739%

359%

CoreOTA

3,203

3,526

4,013

3,457

3,792

4,008

4,549

13%

13%

GrowthYoY

24%

23%

22%

20%

18%

14%

13%

GrowthYoYvs2019

80%

122%

95%

77%

277%

234%

138%

Tourism

663

719

979

780

585

662

910

Revenue

3,866

4,245

4,991

4,238

4,377

4,669

5,459

17%

9%

GrowthYoY

49%

48%

51%

35%

13%

10%

9%

GrowthYoYvs2019

117%

167%

142%

117%

336%

289%

185%

Adjustedrevenue

3,822

4,195

4,933

4,191

4,318

4,604

5,393

17%

9%

Othercostofrevenue

(1,307)

(1,451)

(1,768)

(1,501)

(1,305)

(1,567)

(1,853)

18%

5%

Costofrevenue

(1,351)

(1,501)

(1,827)

(1,548)

(1,365)

(1,633)

(1,918)

17%

5%

Grossprofit

2,515

2,744

3,165

2,690

3,012

3,036

3,541

17%

12%

Grossmargin

65.0%

64.6%

63.4%

63.5%

68.8%

65.0%

64.9%

-0.2ppts

1.5ppts

Servicedevelopmentexpenses

(487)

(494)

(505)

(515)

(495)

(505)

(520)

3%

3%

Sellingandmarketingexpenses

(1,368)

(1,502)

(1,468)

(1,283)

(1,454)

(1,538)

(1,585)

3%

8%

Administrativeexpenses

(265)

(272)

(328)

(341)

(307)

(278)

(338)

22%

3%

FairvaluechangesoninvestmentsOtherincome(gov'tsubs)

39

14

19

28

43

37

(72)

25

21

18

48

17

35

Othergains/(losses),net

7

(6)

32

(30)

22

28

Operating(loss)/profit

455

517

977

474

817

809

1,133

40%

16%

Operatingmargin

11.8%

12.2%

19.6%

11.2%

18.7%

17.3%

20.8%

3.4ppts

1.2ppts

Profitbeforetax

452

539

955

451

805

786

1,098

40%

15%

Incometax(expense)/credit

(52)

(110)

(152)

(96)

(127)

(144)

(198)

Profitaftertax

Non-controllinginterests

FVchangerelatingtopreferredshare

400

(4)

429

4

803

(10)

355

(5)

679

(7)

642

(0)

901

40%

12%

Netprofit

397

434

793

351

672

642

901

40%

14%

Netmargin

10.3%

10.2%

15.9%

8.3%

15.4%

13.7%

16.5%

2.8ppts

0.6ppts

BasicEPS(Rmb)

0.17

0.19

0.34

0.14

0.29

0.28

0.38

37%

13%

DilutedEPS(Rmb)

0.17

0.19

0.34

0.14

0.29

0.28

0.38

37%

13%

Non-IFRSmeasures

EBITDA

820

913

1,319

998

1,184

1,185

1,509

27%

14%

EBITDAmargin

21.2%

21.5%

26.4%

23.5%

27.1%

25.4%

27.6%

2.3ppts

1.2ppts

Operatingprofit

562

659

1,040

707

877

854

1,178

38%

13%

Operatingmargin

14.5%

15.5%

20.8%

16.7%

20.0%

18.3%

21.6%

3.3ppts

0.7ppts

Netprofit

558

657

910

660

788

775

1,034

33%

14%

GrowthYoY

11%

11%

47%

37%

41%

18%

14%

Netmargin

14.4%

15.5%

18.2%

15.6%

18.0%

16.6%

18.9%

2.3ppts

0.7ppts

MidpointofguidanceBeat/(miss)

DilutedEPS(Rmb)

0.24

0.29

0.39

0.26

0.34

0.33

0.44

30%

13%

Source:Companydata,MorganStanleyResearchestimates.

MorganStanleyIRESEARCHIDEA

Exhibit5:Bili:3Q25preview

Incomestatement(Rmbmn)

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

3Q25EQoQ

3Q25E

YoY

Mobilegames

983

1,007

1,823

1,798

1,731

1,612

1,532

-5%

-16%

GrowthYoY

-13.2%

13.1%

83.8%

78.5%

76.1%

60.1%

-15.9%

LivebroadcastingandVAS

2,529

2,566

2,821

3,083

2,807

2,837

3,107

10%

10%

GrowthYoY

17.3%

11.5%

8.7%

7.9%

11.0%

10.6%

10.1%

Advertising

1,669

2,037

2,094

2,389

1,998

2,449

2,513

3%

20%

GrowthYoY

31.2%

29.5%

27.8%

23.8%

19.7%

20.2%

20.0%

E-commerceandothers

484

516

567

465

467

440

505

15%

-11%

GrowthYoY

-5.0%

-4.1%

-2.2%

-16.4%

-3.5%

-14.8%

-11.0%

Totalrevenue

5,665

6,127

7,306

7,734

7,003

7,338

7,657

4%

5%

GrowthYoY

11.7%

15.5%

25.8%

21.8%

23.6%

19.8%

4.8%

Midpointofguidance

5,577

6,047

7,100

Beat/(miss)

2%

1%

3%

Non-gamerevenue

4,682

5,120

5,483

5,937

5,272

5,725

6,125

7%

12%

Costofrevenue

(4,059)

(4,294)

(4,758)

(4,946)

(4,464)

(4,662)

(4,821)

3%

1%

Grossprofit

1,605

1,833

2,547

2,788

2,539

2,676

2,836

6%

11%

Grossmargin

28.3%

29.9%

34.9%

36.1%

36.3%

36.5%

37.0%

0.6ppt

2.2ppt

Selling&marketing

(927)

(1,036)

(1,202)

(1,237)

(1,167)

(1,048)

(1,149)

10%

-4%

General&administrative

(532)

(488)

(505)

(506)

(516)

(510)

(516)

1%

2%

Research&development

(965)

(895)

(906)

(919)

(841)

(866)

(882)

2%

-3%

Operatingprofit

(819)

(585)

(67)

126

15

252

289

15%

-534%

Operatingmargin

-14.5%

-9.5%

-0.9%

1.6%

0.2%

3.4%

3.8%

Oppt

5ppt

Profitbeforetax

(763)

(614)

(88)

65

1

245

337

38%

-482%

Taxexpenses/(benefits)

(2)

6

8

24

(12)

(26)

(40)

52%

-575%

Profitaftertax

(765)

(608)

(80)

89

(11)

218

297

36%

-472%

Preferredsharesredemption

Deemeddividendforpreferred

s

Non-controllinginterest

16

(1)

0

1

2

1

Netincome

(749)

(609)

(80)

90

(9)

219

297

35%

-473%

Netmargin

-13.2%

-9.9%

-1.1%

1.2%

0.1%

3.0%

3.9%

1ppt

5ppt

DilutedEPADS(Rmb)

(1.64)

(1.33)

(0.17)

0.20

(0.02)

0.47

0.64

35%

-471%

Non-GAAPmeasures

Operatingloss

(512)

(284)

272

481

342

573

611

7%

124%

Operatingmargin

-9.0%

-4.6%

3.7%

6.2%

4.9%

7.8%

8.0%

Oppt

4ppt

Netincome

(440)

(272)

236

453

363

562

613

9%

159%

Netmargin

-7.8%

-4.4%

3.2%

5.9%

5.2%

7.7%

8.0%

Oppt

5ppt

DilutedEPADS(Rmb)

(0.96)

(0.59)

0.51

0.99

0.78

1.22

1.32

9%

158%

Operatingdata

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E

QoQ

YoY

CompanyMAU(mn)

341.5

336.0

348.0

340.0

368.0

363.0

362.2

0%

4%

GrowthYoY

8.3%

3.7%

2.1%

1.2%

7.8%

8.0%

4.1%

CompanymobileMAU(mn)

328.5

323.2

334.8

327.1

354.0

349.2

348.4

0%

4%

CompanyDAU(mn)

102.4

102.0

107.3

103.0

106.7

109.4

111.8

2%

4%

GrowthYoY

9.3%

5.7%

4.4%

2.9%

4.2%

7.3%

4.2%

Dailytimespent/DAU(minutes)

NM

NM

Monthlypayingusers(mn)

29.0

29.0

30.0

29.0

32.0

31.0

31.1

0%

4%

Payingratio

QuarterlyARPPU(Rmb)

8.5%

8.6%

8.6%

8.5%

8.7%

8.5%

8.6%

0.0ppt

0.0ppt

Livestreaming

83

76

92

99

81

83

98

19%

6%

Subscription

52

58

55

56

60

59

57

-3%

4%

Source:Companydata,MorganStanleyResearchestimates.

MORGANSTANLEYRESEARCH7

MorganStanleyIRESEARCHIDEA

8

Exhibit6:NTES:3Q25preview

NetEaseRMBmn

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

3Q25E3Q25EQoQ

3Q25E

YoY

3Q25E

Vari.

IncomeStatement

Onlinegames

20,430

19,274

20,196

20,541

23,447

22,145

23,2455%

15%

23,245

0%

GrowthYoY

9.8%

11.8%

-1.0%

5.1%

14.8%

14.9%

15.1%

15.1%

Youdao

1392

1,322

1,573

1,340

1,298

1,418

1,64916%

5%

1,649

0%

GrowthYoY

19.7%

9.5%

2.2%

-9.5%

-6.7%

7.2%

4.9%

4.9%

Music

2,030

2,041

1,999

1,880

1,858

1,969

2,0997%

5%

2,099

0%

GrowthYoY

3.6%

4.7%

1.3%

-5.3%

-8.4%

-3.5%

5.0%

5.0%

Innovativebusinessandothers

3,000

2,849

2,442

2,986

2,225

2,360

2,3751%

-3%

2,375

0%

GrowthYoY

-9.7%

-21.2%

-27.1%

-27.8%

-25.8%

-17.2%

-2.7%

-2.7%

Netrevenues

26,852

25,486

26,210

26,748

28,829

27,892

29,3685%

12%

29,368

0%

GrowthYoY

7.2%

6.1%

-3.9%

-1.4%

7.4%

9.4%

12.1%

12.1%

Grossprofit

17,016

16,042

16,477

16,272

18,479

18,052

18,7984%

14%

18,798

0%

GPM

63.4%

62.9%

62.9%

60.8%

64.1%

64.7%

64.0%-0.7ppts

1.1ppts

64.0%

0.0ppts

Salesandmarketing

(4,022)

(3,502)

(3,805)

(2,819)

(2,696)

(3,578)

(3,886)9%

2%

(3,886)

0%

Generalandadminstrative

(1,196)

(1,091)

(1,100)

(1,162)

(956)

(1,057)

(1,078)2%

-2%

(1,078)

0%

Researchanddevelopment

(4,175)

(4,456)

(4,424)

(4,470)

(4,386)

(4,357)

(4,579)5%

3%

(4,579)

0%

Non-GAAPmarginandratios

Operatingprofit

GrowthYoY

Operatingmargin

Netprofit(companydefinition)

Netmargin(exone-off)Ex-Youdao

Netmargin(exone-off)

8,517 5.9%31.7%

8,51131.7%

8,23232.3%

8,07217.8%31.7%

7,81930.7%

7,61731.5%

8,125-3.0%31.0%

7,49928.6%

7,17229.1%

8,75313.9%32.7%

9,68236.2%

9,36436.9%

11,39333.8%39.5%

11,23739.0%

10,82539.3%

10,00724.0%35.9%

9,53234.2%

9,17434.7%

10,2272%

25.9%

34.8%-1.1ppts9,4