The Zhitong Finance App learned that NetEase (09999) rose nearly 4% at the end of the session. As of press release, it had risen 3.62% to HK$200.4, with a turnover of HK$2,223 billion.

According to the news, NetEase announced the results for the second quarter. CICC pointed out that NetEase's revenue in the second quarter also increased 8% to 30.1 billion yuan, which is slightly better than our and market expectations. Mainly, game and VAS revenue performance was good. Both gross profit and operating profit were better than our expectations. We judge that this is mainly due to continuous improvement in gross margin and improvement in operating efficiency.

Goldman Sachs released a research report saying that benefiting from the favorable PC and mobile game portfolio, the decline in iOS/Android channel fees and the shift to its own channels, NetEase's second-quarter game gross margin reached a record high. Goldman Sachs believes that gross margin expansion is structural. In line with operational efficiency optimization, operating profit is expected to maintain a high ten-digit year-on-year increase in the second half of the year.

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