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<Research>Jefferies Expects App Store Commission Reduction to Have Low-Single-Digit Positive Impact on CN Entertainment Firms' Earnings
Apple (AAPL.US) reduced the commission rate for the China App Store, including lowering the commission rate for in-app purchases and paid app transactions from 30% to 25%, Jefferie...
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<Research>Jefferies Expects App Store Commission Reduction to Have Low-Single-Digit Positive Impact on CN Entertainment Firms' Earnings
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Apple (AAPL.US)      reduced the commission rate for the China App Store, including lowering the commission rate for in-app purchases and paid app transactions from 30% to 25%, Jefferies issued a research report saying. The broker believed that this measure is a positive factor for the overall entertainment sector, and expected a low single-digit impact on major companies' earnings this year.

For example, TENCENT (00700.HK)  -7.400 (-1.490%)    Short selling $1.08B; Ratio 47.391%   is expected by the market to see its smartphone game revenue grow by 11.7% YoY to RMB256 billion, accounting for 31% of total revenue.

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The broker estimated that 70% of this comes from the domestic market, involving about RMB180 billion. Assuming 30% of revenue comes from iOS, with the commission rate reduced from 30% to 25%, the positive impact on earnings in 2026 is expected to be low single-digit.

Regarding NTES-S (09999.HK)  -1.300 (-0.738%)    Short selling $244.93M; Ratio 79.905%   , the market predicted 2026 game revenue to hike by approx. 8.5% YoY to RMB97 billion, accounting for 80% of total revenue. The broker estimated that 90% comes from the domestic market, with 40% of game revenue from iOS. Considering the new measure takes effect in mid-March, the commission rate reduction is forecasted to have less than a 3% impact on earnings this year.

As for KUAISHOU-W (01024.HK)  -1.300 (-2.814%)    Short selling $218.76M; Ratio 44.692%   , the market projected live streaming revenue to be flat at RMB39.4 billion, accounting for 25% of total revenue. Assuming 25% comes from iOS, the commission rate reduction is expected to have a positive impact of less than 2% on earnings this year.

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Regarding online music platforms, the broker anticipated the adjustment to have a positive impact on the 2026 earnings of TME-SW (01698.HK)  -0.980 (-2.686%)    Short selling $46.13M; Ratio 264.857%   / NETEASE MUSIC (09899.HK)  +1.600 (+1.216%)    Short selling $24.03M; Ratio 91.313%   by approx. 1%/ 2% respectively.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-04-02 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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