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In a ballroom at the Four Seasons hotel in Hong Kong last month, some 300 potential investors gathered to size up Japan's most popular smartphone messaging app ahead of its $1 billion-plus initial public offering in New York and Tokyo.

Line Corp.'s top executives made their sales pitch, armed with data showing revenue growth and plans to expand its advertising business, according to people who attended the roadshow.

Investors asked the executives about user-growth prospects, acquisitions and the chances of re-entering China, where censors block Line and some other foreign social networks.

But Line's Chief Executive, Takeshi Idezawa, speaking to global investors in Japanese through an interpreter, kept the focus on plans for the five-year-old app to earn more revenue in Japan, where it is already dominant, the people said.

"It made me wonder whether the management has what it takes to build a regional business across Asia," said Tony Chu, a portfolio manager at U.S. asset-management firm RS Investments, who attended the meeting.

As Line prepares to make its debut in New York on Thursday and Tokyo on Friday, after raising $1.14 billion in the technology industry's biggest IPO so far this year, some investors are questioning whether the company—valued about $6.6 billion—can expand beyond its core markets and contend with larger rivals in the U.S. and China.

Tokyo-based Line, owned by South Korean internet giant Naver Corp., is grappling with slowing user growth and annual losses, while trying to earn more money from content it has introduced to transform itself from a simple chat app into an all-in-one smartphone portal.

Created in 2011 as a free communication app, Line quickly gained popularity thanks to the cutesy digital stickers users can send to convey various emotions. Some stickers are free, while others cost up to nearly $6.

But its monthly active user count of 218 million has been plateauing in recent quarters, and the company hasn't been able to significantly expand beyond Japan, Taiwan, Thailand and Indonesia, which collectively account for two-thirds of its users. While revenue grew to more than ¥ 120 billion ($1.15 billion) last year from about ¥ 40 billion in 2013, it has posted net losses in two of the past three years, and has a debt load of ¥ 104.6 billion.

Analysts and fund managers say investors will likely want shares of the company while technology IPO markets are in the doldrums, but whether or not the hype lasts will depend on Line's ability to sustain growth.

"I expect initial popularity, but unless the company creates new pillars of revenue in the next year or two, share prices could be dragged down," said Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute.

To diversify, Line has been adding functions including taxi-hailing, mobile payments, and music and video streaming, though many of the features have yet to gain significant traction. Facing more experienced competitors, it has had to close some of its features, such as Line Mall, an e-commerce service it launched in 2013.

So far, Line has had limited success in making money outside of its home country, which accounts for about 70% of the company's revenue, most of which is derived from games, sales of digital stickers and advertisements.

"Our current business and future growth could be materially and adversely affected if we experience a decline in users or user engagement in Japan," Line noted in its IPO prospectus filed to the U.S. Securities and Exchange Commission.

The company declined to comment beyond what it said in its filing.

Line also operates in a highly competitive environment, facing ambitious players with larger financial resources and user bases. Facebook Inc.'s WhatsApp and Messenger apps collectively boast nearly two billion users and have been expanding globally, while Tencent Holdings Ltd.'s WeChat dominates the Chinese market with 762 million users. WhatsApp is widely used in 109 countries, and Messenger in 49 countries, while Line is dominant in only four countries, according to data from research firm SimilarWeb.

Line has said it aims to replicate the success it has had in Japan in other markets, with a particular focus on Asia. Line is installed on 79% of Android devices in Japan, 92% in Taiwan, 94.6% in Thailand, and 70.8% in Indonesia, according to SimilarWeb.

Rong Lin, a 36-year-old Taipei resident working for an internet company, said Line was ubiquitous in Taiwan, where even older people who have never used a computer before use it to text, share stickers, and for voice and video chat. But she said some of Line's services, such as mobile payments, had not taken off.

In 2013, Line tried to expand in India with TV commercials, but ultimately most smartphone users didn't switch to Line.

"Most of my friends are using WhatsApp," said Abhinav Bansal, a 23-year-old graduate student in Mumbai.

To create new sources of revenue, Line this year plans to launch a low-cost mobile carrier in Japan, using the wireless networks of NTT DoCoMo Inc. But Japan's wireless market is already saturated with cheap mobile options. It has beefed up its advertisement services, but user growth will be key in drawing potential clients.

Some analysts said listing in the U.S. could boost Line's brand overseas.

"Whether it can use its IPO to increase penetration in overseas markets will impact its future share performance," said Tomoichiro Kubota, a senior market analyst at Matsui Securities Co.

Line will begin trading 22 million new shares in New York on Thursday and 13 million shares in Tokyo on Friday after pricing its IPO at the top end of its range. Line first submitted an application to list on the Tokyo Stock Exchange in 2014, but postponed the offering, and then scrapped plans to list in 2015.

Naver, Line's parent company, will retain more than 80% of Line's shares after the IPO, enabling the South Korean company to continue to have control.

Write to Alexander Martin at alexander.martin@wsj.com and Juro Osawa at juro.osawa@wsj.com

(END) Dow Jones Newswires

July 13, 2016 08:25 ET (12:25 GMT)

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