Core Points - The account of the late singer Coco Lee was accessed by an individual due to a phone number reassignment by the telecom operator, raising concerns about digital account security and management of digital legacies [1][3]. Group 1: Incident Details - On October 11, a user reported that after registering a new phone number with NetEase Cloud Music, they received a verification code and were automatically logged into Coco Lee's account [1]. - The account had 261,000 followers and contained numerous unread private messages from fans expressing their condolences, with messages dated from September to October 2025 [3]. Group 2: Company Response - NetEase Cloud Music's customer service confirmed that the issue arose from the reassignment of the phone number linked to the artist's account and stated that they had contacted the new number owner to address the situation [3]. Group 3: Broader Implications - Analysts suggest that this incident highlights broader issues regarding account security in the digital age and the management of digital legacies, emphasizing the need for platforms to enhance security mechanisms and for users to improve their security awareness [3].

Core Viewpoint - The incident involving a user logging into the late singer CoCo Lee's NetEase Cloud Music account highlights issues related to account security and the management of phone numbers by telecom operators, leading to unintended account access by new users [1][3]. Group 1 - A user reported being able to log into CoCo Lee's NetEase Cloud Music account after registering a new phone number, which was previously associated with the late singer's account [1]. - NetEase Cloud Music's customer service confirmed that this situation can occur when the original account holder does not unlink their phone number after it becomes inactive, allowing the number to be reassigned to a new user by the telecom operator [1][4]. - The incident raises concerns about the security of personal accounts and the importance of promptly updating account information when phone numbers change [2][4]. Group 2 - The user stated that NetEase Cloud Music's official support contacted them to confirm that the account had been unlinked [3]. - CoCo Lee, a renowned singer, tragically passed away on July 2, 2023, due to depression, which adds a sensitive context to the situation surrounding her account [3].

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年9月30日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 網易雲音樂股份有限公司 呈交日期: 2025年10月2日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 09899 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 1,000,000,000 | USD | | 0.0001 | USD | | 100,000 | | 增加 / 減少 (-) | | | | | | | USD | | | | 本月底結存 | | | 1,000,000,000 | USD | | 0.0001 | USD | | 100,000 | 本月底法定/註冊股本 ...

Core Viewpoint - The company is focusing on enhancing its competitive advantages and growth potential in the online music market, emphasizing a return to its core music offerings and improving liquidity and profitability [1] Company Overview - The company has undergone significant product changes, including a major revamp of NetEase Cloud Music in 2024, which will close live streaming, social, and e-commerce features to refocus on music recommendations and community experience [1] - The return of major copyrights has strengthened the content offering, covering top artists from Chinese, Japanese, Korean, and Western markets [1] - Liquidity has improved significantly, with the proportion of mid-to-long tail equity increasing from 22.8% at the end of 2022 to 29.7% by the end of 2024, currently exceeding 31% [1] - The company turned a profit in 2023, with continuous improvement in profitability expected for 2024-2025, projecting a gross margin exceeding 36% in the first half of 2025 [1] Industry Analysis - The online music market is projected to reach a scale of 28.8 billion yuan in 2024, with a year-on-year growth of 20%, and a compound annual growth rate (CAGR) of 32% from 2017 to 2024, indicating strong resilience as a "small happiness" consumption category [2] - The primary growth driver in the industry is young users, with nearly 70% of new users on music platforms being born after 2000 [2] - The domestic market is characterized by a stable duopoly between Tencent Music and NetEase Cloud Music, while the overseas market is fragmented with Spotify holding the largest share [2] - Domestic platforms enjoy higher gross margins compared to their overseas counterparts due to the concentrated bargaining power of major overseas record labels [2] Growth Drivers - The company is leveraging its high proportion of young users to implement a targeted copyright strategy, with growth primarily driven by online music and membership increases in the short to medium term, and price increases in the long term [3] - The current paid user wall is only half that of Tencent Music, with a potential increase of 1% in the paid wall expected to add approximately 880,000 members; a mid-term target of 60% could see membership exceed 8.8 million [3] - The company aims for a long-term membership growth target of 100 million, with a 40% payment rate, and anticipates an average revenue per paying user (ARPPU) of 10 yuan/month [3] Profitability Outlook - The company expects steady growth in monthly active users (MAU) and a 15% growth rate in membership, projecting long-term revenues from online music to exceed 14 billion yuan [3] - With improved operational leverage and a higher proportion of self-produced content, gross margins are expected to rise to nearly 47% in the medium to long term, with net profits projected to reach 5-6 billion yuan [3] Financial Projections - The company maintains its revenue forecasts for 2025-2027 at 7.9 billion, 8.8 billion, and 9.8 billion yuan, respectively, with adjusted net profits of 2.86 billion, 2.33 billion, and 2.74 billion yuan, corresponding to price-to-earnings (PE) ratios of 18, 22, and 19 times [4] - The company is confident in its differentiated copyright strategy and its appeal to young users, which lays a solid foundation for long-term growth, with substantial potential for both revenue and profit [4] - A target market capitalization of 76.5 billion HKD for 2026 is set, maintaining a buy rating based on user value and PE levels [4]

Investment Rating - The report maintains a "Buy" rating for NetEase Cloud Music [3][8]. Core Insights - The report emphasizes the company's competitive advantages and growth potential, particularly focusing on its young user base and the resilience of the online music industry [7][8]. - The company has improved its liquidity and profitability significantly, with a return to profitability in 2023 and continued improvement expected in 2024 and 2025 [7][26]. Summary by Sections 1. Review: Return to Core Product and Improvement in Liquidity and Profitability - The company has refocused on its music core by simplifying its app and enhancing music recommendations and community experiences [19][22]. - Major copyright returns have strengthened the content offering, covering top artists across various genres [22][24]. - Liquidity has improved, with the proportion of mid-to-long tail equity increasing from 22.8% at the end of 2022 to over 31% currently [24][25]. - The company achieved a gross margin exceeding 36% in the first half of 2025, indicating a strong recovery [7][26]. 2. Industry: Strong Anti-Cyclicality and Favorable Market Structure - The online music market in China is projected to reach 28.8 billion RMB in 2024, growing at 20% year-on-year, with a CAGR of 32% from 2017 to 2024 [35][36]. - Young users are the primary growth driver, with nearly 70% of new users being from the post-2000 generation [37][38]. - The competitive landscape is stable, with Tencent Music and NetEase Cloud Music as the dominant players [40][41]. 3. Growth Drivers: Focus on Young Users with High Certainty and Potential - The user structure influences the company's differentiated copyright strategy, targeting a high proportion of young users [54][62]. - The company aims to increase its paid user base significantly, with projections suggesting a potential membership of over 88 million if the payment wall is raised [9][62]. - The community engagement is high, with average daily usage time nearing 80 minutes, indicating strong user loyalty [69]. 4. Profitability Forecast and Valuation - Revenue projections for 2025-2027 are 7.9 billion, 8.8 billion, and 9.8 billion RMB, respectively, with adjusted net profits of 2.86 billion, 2.33 billion, and 2.74 billion RMB [6][8]. - The report estimates a target market capitalization of 76.5 billion HKD for 2026, based on comparative company valuations [8][9].

Core Insights - NetEase Cloud Music has upgraded its features for the Li Auto vehicle version, introducing a new karaoke function without a microphone, personalized recommendation sections, and diverse podcast and audiobook content [3][4] Group 1: Feature Upgrades - The new karaoke feature allows Li Auto owners to use a full cabin amplification mode, simplifying the process of singing while commuting or traveling [3] - The upgrade includes an audiobook function covering various categories such as music, emotions, and parenting [4] - Additional features like "Heart Mode," "Personal Radar," and "Artist Radio" have been introduced to enhance the user experience [4] Group 2: Industry Collaboration - NetEase Cloud Music has partnered with over 50 well-known automotive companies, including Li Auto, BYD, and Xiaomi Auto [4] - The company aims to continuously innovate product features and improve in-car music services to enrich the travel experience for users [4]

Group 1 - The core viewpoint of the articles highlights the performance of the gaming and cultural media sector, with notable stock movements in companies like NetEase Cloud Music and Liou Co., as well as the significant growth of the gaming media ETF [1][2] - As of September 19, the gaming media ETF has seen a net value increase of 79.20% over the past year, indicating strong market interest and performance in this sector [1] - The Delta Action game has topped the iOS sales chart, and its international version on Steam reached a peak of 226,000 concurrent players, showcasing the popularity and engagement of new gaming titles [1] Group 2 - Huayuan Securities notes that the current gaming market rally is based on product performance, EPS upgrades, and synchronized valuation recovery, suggesting that there is no strong bubble in valuations [2] - The report emphasizes two key strategies for continued focus on the gaming sector: the trading potential of major game titles and the structural growth opportunities in PC and mini-games [2] - The index tracks 50 listed companies involved in gaming, film, broadcasting, marketing, publishing, education, and cultural performances, reflecting the overall performance of the gaming and cultural media theme in the mainland and Hong Kong markets [2][3] Group 3 - As of August 29, the top ten weighted stocks in the index include Kuaishou-W, Tencent Holdings, and Bilibili-W, with these stocks collectively accounting for 54.14% of the index [3]

Core Viewpoint - The recent semi-annual adjustment of the FTSE Global Equity Index Series has included several Hong Kong stocks, indicating a shift in market dynamics and highlighting the performance of certain sectors, particularly gold and biopharmaceuticals [1][2][3]. Group 1: Index Adjustments - Chifeng Jilong Gold Mining (06693) and Laopuhuang Gold (06181) have been included in the FTSE China Large Cap Index for the first time, while 11 Hong Kong stocks, including SF Express (09699) and SOTY Technology (02498), have been added to the FTSE China Small Cap Index [1][2]. - The FTSE Global Equity Index Series categorizes stocks into four market capitalization tiers based on free float market capitalization, which excludes strategic holdings and locked shares [1]. Group 2: Market Performance - The newly included stocks have shown significant price increases this year, with Chifeng Jilong Gold rising over 120% and Laopuhuang Gold increasing by over 200%, reflecting strong sector performance [3]. - The biopharmaceutical sector has also seen substantial growth, with companies like Rongchang Bio (09995) and Sanofi (01530) experiencing stock price increases of nearly 670% and a market capitalization exceeding 77 billion HKD, respectively [3][5]. Group 3: Company Highlights - Chifeng Jilong Gold focuses on gold mining and resource recovery, reporting a net profit of 1.107 billion RMB in the first half of 2025, a year-on-year increase of 55.79% [4]. - Laopuhuang Gold, which went public on June 28, 2024, has seen its stock price surge by 204.65% this year, making it the highest-priced stock in the Hong Kong market [4]. - SF Express, as the largest third-party instant delivery platform in China, has seen steady growth in market capitalization and liquidity since its listing in December 2021, with a target price of 20 HKD set by Daiwa [4]. - Sanofi has gained attention due to a significant business development deal with Pfizer, leading to a market capitalization of 77 billion HKD [5]. - Fourth Paradigm (06682) has received positive outlooks from multiple brokerages, with target prices raised due to its strong position in the AI sector [6].

Company Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The Board of Directors comprises Mr. Ding Lei (Chairman and CEO), two executive directors, one non-executive director, and three independent non-executive directors, with audit, remuneration, and nomination committees established - Board members include **Chairman and CEO Mr. Ding Lei**, two executive directors, one non-executive director, and three independent non-executive directors[5](index=5&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee are all established and chaired by independent non-executive directors[5](index=5&type=chunk) [Key Contacts and Legal Information](index=3&type=section&id=Key%20Contacts%20and%20Legal%20Information) The company secretary is Ms. Wong Wai Yee, authorized representatives are Mr. Li Yong and Ms. Wong Wai Yee, auditor is PwC, registered in Cayman Islands with headquarters in Hangzhou, China, and legal counsel covers multiple jurisdictions - The company secretary is **Ms. Wong Wai Yee**, and authorized representatives are **Mr. Li Yong and Ms. Wong Wai Yee**[5](index=5&type=chunk) - The auditor is **PricewaterhouseCoopers**[5](index=5&type=chunk) - The company's registered office is in the Cayman Islands, its principal place of business in Hong Kong is in Causeway Bay, and its headquarters are in Hangzhou, China[5](index=5&type=chunk) - Legal counsel covers Hong Kong, US, China, and Cayman Islands law[6](index=6&type=chunk) [Share and Banking Information](index=4&type=section&id=Share%20and%20Banking%20Information) The principal share registrar is in the Cayman Islands, Hong Kong share registrar is Hong Kong Registrars Limited, main bank is ICBC Hangzhou Branch, stock code is 9899, and investor relations website is ir.music.163.com - The principal share registrar is Maples Fund Services (Cayman) Limited, and the Hong Kong securities registrar is Hong Kong Registrars Limited[6](index=6&type=chunk) - The main bank is **ICBC Hangzhou Branch**[6](index=6&type=chunk) - The company's stock code is **9899**, and the investor relations website is http://ir.music.163.com[6](index=6&type=chunk) Financial and Business Highlights [IFRS Measures](index=5&type=section&id=IFRS%20Measures) For the six months ended June 30, 2025, revenue decreased by 6.0% to RMB 3.8 billion, gross profit decreased by 2.3% to RMB 1.39 billion, while operating profit surged 40.8% to RMB 0.84 billion, and profit for the period increased 132.4% to RMB 1.9 billion For the six months ended June 30, 2025, IFRS Measures | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,827,117 | 4,070,493 | -6.0% | | Gross Profit | 1,392,485 | 1,425,731 | -2.3% | | Operating Profit | 844,506 | 599,933 | +40.8% | | Profit Before Income Tax | 1,068,060 | 813,578 | +31.3% | | Profit for the Period | 1,882,142 | 809,949 | +132.4% | [Non-IFRS Measures](index=5&type=section&id=Non-IFRS%20Measures) Under non-IFRS measures, for the six months ended June 30, 2025, adjusted operating profit grew 35.0% to RMB 0.905 billion, and adjusted net profit increased 121.0% to RMB 1.946 billion, primarily adjusted by adding back equity-settled share-based payments For the six months ended June 30, 2025, Non-IFRS Adjusted Financial Metrics | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Adjusted Operating Profit | 905,360 | 670,850 | +35.0% | | Adjusted Net Profit | 1,946,353 | 880,749 | +121.0% | - Non-IFRS measures adjust operating profit and net profit by adding back equity-settled share-based payments (primarily share incentive expenses) to better reflect core operating performance[10](index=10&type=chunk) Management Discussion and Analysis [Business Review](index=7&type=section&id=Business%20Review) In H1 2025, the company focused on high-quality development of its core music ecosystem, enhancing user engagement through content optimization, personalized distribution, innovative features, and community building, resulting in 15.2% growth in membership subscription revenue and a gross margin increase to 36.4% - The company is committed to high-quality development of its core music ecosystem, enhancing user attraction and engagement through content optimization, personalized distribution, innovative features, and community attributes[12](index=12&type=chunk) - Membership subscription revenue increased by **15.2% year-on-year**, primarily due to subscriber growth, although average revenue per paying user was slightly diluted by changes in subscriber structure[14](index=14&type=chunk) - Gross margin reached **36.4% in H1 2025**, a significant improvement from H1 2024, benefiting from business scale expansion, strong monetization of core online music services, and continuous cost optimization[14](index=14&type=chunk) [User Growth and Engagement](index=7&type=section&id=User%20Growth%20and%20Engagement) In H1 2025, the company maintained steady growth in total monthly active users, with the DAU/MAU ratio consistently above 30%, and increased mobile listening time and user engagement - Total monthly active users maintained a steady growth momentum in H1 2025[12](index=12&type=chunk) - The daily active users/monthly active users ratio grew steadily, remaining above **30%**[12](index=12&type=chunk) - User mobile listening time increased, and engagement improved[12](index=12&type=chunk) [Content Ecosystem and Original Music](index=7&type=section&id=Content%20Ecosystem%20and%20Original%20Music) The company continuously enriched its unique content reserves, expanded licensed content including K-Pop labels and renowned Chinese musicians, and actively promoted original Chinese music, with self-produced tracks like 'Dilemma' gaining popularity - Continuously enriched unique content reserves and expanded licensed content, including popular K-Pop labels such as RBW and StarShip Entertainment[13](index=13&type=chunk) - Supplemented works by renowned Chinese musicians such as Li Jian, Zhang Yixing, Chen Chusheng, and Jike Junyi[13](index=13&type=chunk) - Actively promoted original Chinese music, with several self-produced tracks like 'Dilemma' gaining popularity both on and off the platform[13](index=13&type=chunk) [Product Optimization and Innovative Features](index=7&type=section&id=Product%20Optimization%20and%20Innovative%20Features) In H1 2025, the company upgraded its main product for enhanced visual appeal, simplification, and ease of use, delivering superior audio-visual experiences through advanced personalized distribution and innovative features like 'Shenguang Player,' while expanding interactive scenarios to boost user activity - Main product upgrades and optimization enhanced visual appeal, simplification, and ease of use[13](index=13&type=chunk) - Provided superior audio-visual experiences through advanced personalized distribution and innovative features like "Shenguang Player"[13](index=13&type=chunk) - Expanded and enhanced interactive scenarios, strengthened the music community, and increased user activity and engagement[13](index=13&type=chunk) [Monetization and Profitability](index=8&type=section&id=Monetization%20and%20Profitability) In H1 2025, the company's music-centric monetization capabilities grew steadily, with membership subscription revenue up 15.2%, gross margin rising to 36.4%, and improved profitability driven by subscriber growth, core business monetization, and cost optimization - Membership subscription revenue increased by **15.2% year-on-year**, primarily due to subscriber growth[14](index=14&type=chunk) - Gross margin reached **36.4% in H1 2025**, a significant improvement compared to the same period in 2024[14](index=14&type=chunk) - Profitability improved due to business scale expansion, strong monetization of core online music services, and continuous cost optimization[14](index=14&type=chunk) [Future Strategic Focus](index=8&type=section&id=Future%20Strategic%20Focus) The company's future strategy focuses on efficiently enriching differentiated content, optimizing music listening and recommendation, fostering a music-oriented community, enhancing user willingness to pay, and improving profitability through cost optimization and operational efficiency - Further enrich and enhance differentiated content with higher efficiency, deepen cooperation with copyright holders, and strengthen independent musician incubation and self-produced music capabilities[14](index=14&type=chunk) - Provide an ultimate music experience by optimizing music listening experience and recommendation features[14](index=14&type=chunk) - Cultivate a music-oriented community ecosystem, expand social scenarios and ecosystems, and explore innovations in the social domain[14](index=14&type=chunk) - Improve profitability through continuous cost optimization, operational efficiency enhancements, and strict cost control[14](index=14&type=chunk) [Comprehensive and Differentiated Content Ecosystem](index=9&type=section&id=Comprehensive%20and%20Differentiated%20Content%20Ecosystem) The company continuously expanded its licensed and original music reserves, supporting independent musicians and self-produced music to promote original Chinese music, with over 819,000 registered independent musicians and 4.8 million tracks by June 2025, while also strengthening partnerships for K-Pop, Chinese, and niche genres - Continuously expanded unique content reserves, covering licensed tracks and original music, actively promoting the development of original Chinese music[16](index=16&type=chunk) - As of June 2025, the platform had over **819,000 registered independent musicians**, who

Investment Rating - The report indicates a positive investment outlook for the gaming sector, highlighting its strong performance compared to other sub-industries within the media and internet sectors [3][5]. Core Insights - The gaming industry is experiencing significant growth, with mobile game market size increasing by 16% year-on-year in the first half of 2025, while PC games show a 5% increase [3][14]. - The report emphasizes the high demand for entertainment consumption, particularly in gaming, music, and trendy toys, while long-form video content has reached a low point [3][8]. - Cloud computing and AI applications are accelerating, with notable revenue growth in cloud services, particularly from Alibaba Cloud and Kingsoft Cloud, which reported year-on-year growth of 26% and 24% respectively [3][8]. - The advertising sector shows resilience, particularly in short video platforms and elevator advertising, with initial signs of AI integration [3][8]. - The internet healthcare sector is witnessing an uplift in market conditions, indicating a positive trend [3][8]. Summary by Sections 1. Overview - The report summarizes the performance of the media and internet sectors, noting the standout performance of the gaming industry [3][4]. 2. Entertainment Consumption - The gaming, music, and trendy toy IPs are thriving, while long-form video content is struggling [3][4]. - The gaming sector's revenue growth is driven by regulatory easing, increased demand from younger users, and innovative overseas strategies [3][14]. 3. Cloud Computing and AI Applications - Cloud services are experiencing accelerated growth, with significant investments from major players like Alibaba and Tencent [3][8]. - AI applications are beginning to monetize effectively, particularly in emotional consumption and productivity tools [3][8]. 4. Advertising - The advertising sector remains robust, with short video platforms and elevator ads showing resilience [3][8]. 5. Internet Healthcare - The report notes an improvement in the internet healthcare sector's market conditions [3][8]. 6. Publishing - The publishing sector is experiencing flat revenue growth, but tax exemptions are helping to restore profit margins [3][8].