交银国际研究 公司更新 | --- | --- | --- | |------------|-------------|----------| | 收盘价 | 目标价 | 潜在涨幅 | | 港元 92.85 | 港元 120.00 | +29.2% | 云音乐 (9899 HK) 上半年利润超预期，核心音乐会员业务维持稳健 2024 上半年利润超预期。2024 上半年云音乐收入 40.7 亿元（人民币，下 同），同/环比增4%/3%，主要受音乐业务拉动，基本符合我们/市场预期。 剔除版权成本一次性调整影响，毛利率同/环比扩 8/4 个百分点，受益于在 线音乐规模效应、自制增加以及社交收入分成比例收窄。经调整净利润 8.8 亿元，好于市场预期的 6.2 亿元，主要因费用优化好于预期。 音乐业务维持稳健增长，持续聚焦规模扩张及用户体验优化：1）会员订 阅收入同比增25%，公司不再披露MAU、会员等运营数据，但分享将通过 增加差异化内容供给及升级产品/会员功能发力用户和会员规模增长，预 计人均付费（ARPPU）或相对持稳。2）非会员收入同比增 33%，主要受 广告拉动，激励广告开始贡献收入增量。 展望：我们预计 2 ...

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 4,070,493 thousand, representing a 4.1% increase compared to RMB 3,908,380 thousand in the same period of 2023[6]. - Gross profit for the same period was RMB 1,425,731 thousand, a significant increase of 47.7% from RMB 965,147 thousand year-over-year[6]. - The company achieved a profit before income tax of RMB 813,578 thousand, marking a substantial increase of 160.8% compared to RMB 311,961 thousand in the previous year[6]. - Net profit for the period was RMB 809,949 thousand, reflecting a remarkable growth of 175.7% from RMB 293,750 thousand in the prior year[6]. - Adjusted net profit, which excludes certain equity settlement items, reached RMB 880,749 thousand, up 165.4% from RMB 331,893 thousand in the same period last year[6]. - Operating profit surged to RMB 599,933,000, a substantial rise from RMB 104,611,000 in 2023, representing an increase of 472.5%[47]. - Basic earnings per share for the first half of 2024 were RMB 3.88, compared to RMB 1.39 in 2023, reflecting a growth of 179.1%[48]. - The company's profit attributable to equity holders for the six months ended June 30, 2024, was RMB 809,832,000, a significant increase from RMB 293,750,000 in the same period of 2023, representing a growth of 175.5%[47]. - Adjusted net profit for the same period was RMB 880,749,000, compared to RMB 331,893,000 in 2023, reflecting a year-over-year increase of 164.5%[47]. - Total revenue for the first half of 2024 reached RMB 4,070,493,000, up from RMB 3,908,380,000 in 2023, marking an increase of 4.1%[47]. Revenue Breakdown - Online music service revenue increased by 26.6% to RMB 2,559.7 million, driven by a rise in subscription sales[30]. - Social entertainment service revenue decreased by 19.9% to RMB 1,510.8 million, reflecting a more cautious operational strategy[31]. - The cost of content services decreased to RMB 2,014,439, down 16% from RMB 2,399,396 in 2023[60]. - Total comprehensive income for the first half of 2024 was RMB 850,054,000, compared to RMB 528,113,000 in 2023, indicating an increase of 60.9%[48]. User Engagement and Content Strategy - Subscription revenue grew by 25.5% year-over-year, driven by an increase in the number of subscribers[12]. - Daily active users to monthly active users ratio remained above 30%, indicating strong user engagement[11]. - The company is focusing on expanding its content library, particularly in niche music genres like rap, to cater to diverse user preferences[12]. - The company expanded its music label library in the first half of 2024, collaborating with major Korean labels like JYP Entertainment and Kakao Entertainment, as well as Chinese labels like KC DIGITAL and Guoran Entertainment[16]. - The platform registered over 732,000 independent musicians by June 2024, with approximately 3.6 million music tracks uploaded, enhancing the support system for emerging musicians, particularly in niche genres like rap[17]. - The average listening time for long audio content per user increased by 49.4% in the first half of 2024, driven by enhanced quality content attracting long audio users and encouraging deeper consumption[20]. - The company focused on producing popular rap tracks and successfully launched several well-received songs, including the Henan dialect rap song "5:20 AM" and the instrumental piece "Farewell Letter" in the first half of 2024[21]. - The company enhanced user experience by optimizing music discovery and listening experiences, contributing to increased user engagement and retention[24]. - The company actively expanded its PGC long audio content reserve, including self-produced audio dramas that resonated well with the young user demographic, proving effective in attracting new users[22]. - The company strengthened partnerships with copyright holders, enhancing the content supply of niche music genres to cater to the preferences of its young audience[15]. - The company implemented product innovations and optimizations in the "NetEase Cloud Music" app, focusing on personalized content recommendations and community engagement, which improved user experience and interaction[23]. Cost Management and Financial Health - Operating costs decreased by 10.1% to RMB 2,644.8 million, primarily due to a reduction in content service costs[32]. - Research and development expenses decreased by 10.2% to RMB 395.6 million, attributed to improved resource utilization[37]. - Financial net income increased to RMB 214.4 million from RMB 208.6 million, due to a continuous increase in deposit amounts[40]. - Tax expenses decreased significantly from RMB 18.2 million in 2023 to RMB 3.6 million in 2024, mainly due to reduced withholding tax on interest income[41]. - Cash and cash equivalents decreased to RMB 2,560,079,000 from RMB 4,020,400,000 at the end of 2023, a decline of 36.3%[50]. - The company's total equity attributable to equity holders increased to RMB 9,309,325,000 from RMB 8,440,902,000, reflecting a growth of 10.3%[52]. - Total assets as of June 30, 2024, amounted to RMB 12,448,703,000, an increase from RMB 11,610,551,000 at the end of 2023, representing a growth of 7.2%[50]. Corporate Governance and Compliance - The company has adopted and complied with all applicable provisions of the Corporate Governance Code, with the exception of the separation of roles between the Chairman and CEO, which is currently held by Mr. Ding Lei[76]. - The interim financial results for the six months ended June 30, 2024, have been reviewed by the audit committee and are unaudited, with no disagreements on accounting treatment between the board and the audit committee[77]. - The company will continue to regularly review and monitor its corporate governance practices to ensure compliance with the Corporate Governance Code[76]. - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and internal controls[77]. - The company will reassess the separation of roles between the Chairman and CEO in the future, considering the overall situation of the group[76]. - The company did not declare or pay any dividends for the six months ended June 30, 2024, and 2023[69]. - The board has decided not to declare an interim dividend for the reporting period[80]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[78]. - The interim results announcement will be published on the Hong Kong Stock Exchange website and the company's website, with timely distribution to shareholders upon request[81]. - The company expects to utilize the remaining net proceeds from the global offering within the next 30 months[79].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 120.00, indicating a potential upside of 11.8% from the current closing price of HKD 107.30 [9]. Core Insights - The first quarter gross margin exceeded expectations, leading to an upward revision of the full-year profit forecast. The company reported a revenue of RMB 3.96 billion for Q1 2024, a year-on-year increase of 3.6%, which aligns with expectations. The gross margin improved by 11 and 3 percentage points year-on-year and quarter-on-quarter, respectively, benefiting from economies of scale in online music, optimized copyright costs, and a reduced revenue-sharing ratio from social income [1][5]. - Membership growth is expected to slightly outperform previous forecasts, with a projected year-on-year increase of 21% in the first half of the year. The average revenue per paying user (ARPPU) is expected to increase by 2% year-on-year, remaining stable quarter-on-quarter [1][5]. - The product revamp focuses on enhancing the core music user experience, although social income may continue to face pressure in the short term. The company has slightly lowered its full-year social income forecast due to a contraction in live streaming traffic [1][5]. - There is still potential for further gross margin improvement as the company continues to expand its copyright content coverage, including partnerships with Korean entertainment companies JYP and Kakao [1][5]. - Based on the better-than-expected gross margin optimization, the adjusted net profit forecast for 2024 has been raised to RMB 1.1 billion, with a target price adjustment based on a 20x P/E ratio for comparable music and copyright companies [1][5]. Financial Summary - Revenue projections for the company are as follows: RMB 7.996 billion for 2024, RMB 8.878 billion for 2025, and RMB 9.921 billion for 2026, with corresponding year-on-year growth rates of 1.6%, 11.0%, and 11.7% respectively [4][10]. - The net profit is expected to be RMB 1.141 billion in 2024, RMB 1.270 billion in 2025, and RMB 1.617 billion in 2026, with significant growth from a loss of RMB 115 million in 2022 to a profit in subsequent years [4][10]. - The gross margin is projected to improve from 27% in 2023 to 34% in 2024, maintaining at 34% in 2025 and increasing to 36% in 2026 [5][10].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights a significant increase in gross margin for Q1 2024, attributed to a one-time adjustment in copyright costs, increased subscription revenue, and ongoing cost control improvements. The gross margin reached 38%, a year-on-year increase of 15.6 percentage points [5] - The company is expected to continue its profitability growth trajectory, with projected net profits for 2024-2026 being 1.008 billion, 1.281 billion, and 1.444 billion respectively, corresponding to EPS of 4.7, 6.0, and 6.7 [5] - The report emphasizes the company's strategy of enriching its content library through original support, self-produced music, and copyright acquisitions, which has led to successful hits and collaborations with major global music labels [6] - The integration of AI technology in music production and consumption is expected to enhance efficiency and open new growth avenues, potentially lowering content production costs and expanding monetization opportunities [7] Summary by Sections Financial Performance - In Q1 2024, the company achieved total revenue of 2 billion (up 3.6% year-on-year, up 2.2% quarter-on-quarter) and gross profit of 770 million (up 75.6% year-on-year, up 28.3% quarter-on-quarter) [5] - The gross margin for Q1 2024 was reported at 38%, reflecting a substantial improvement due to copyright cost adjustments [5] Content Strategy - The company is focusing on three main paths to enrich its content: supporting original works, producing self-made music, and acquiring copyrights. This strategy has led to notable successes, including award nominations and popular songs [6] - The return of popular Korean music copyrights to the platform has further enhanced its content offerings [6] AI Integration - The company is deepening the application of AI in the music creation process, providing tools that assist users in music production, which is expected to lower barriers to entry and increase user engagement [7]

Financial Performance - Revenue decreased by 12.5% from RMB 8,992,221,000 in 2022 to RMB 7,866,992,000 in 2023[5] - Gross profit increased by 62.6% from RMB 1,293,118,000 in 2022 to RMB 2,102,670,000 in 2023[5] - Adjusted net profit for 2023 was RMB 818,500,000, compared to an adjusted net loss of RMB 114,573,000 in 2022[7] - Net profit for 2023 was RMB 734.2 million, a significant turnaround from a net loss of RMB 221.5 million in 2022[42] - The company achieved an adjusted net profit of RMB 818.5 million in 2023, marking its first annual profit compared to an adjusted net loss of RMB 114.6 million in 2022[12] - The company's revenue decreased by 12.5% from RMB 8,992.2 million in 2022 to RMB 7,867.0 million in 2023[31] - Operating costs decreased by 25.1% from RMB 7,699.1 million in 2022 to RMB 5,764.3 million in 2023, primarily due to reduced content service costs[33] - Financial income increased significantly from RMB 183.1 million in 2022 to RMB 437.9 million in 2023, attributed to rising interest rates on fixed deposits[40] User Engagement and Growth - Monthly active users for online music services increased to 205.9 million in 2023 from 189.4 million in 2022[9] - Paid subscribers for online music services rose to 44.12 million in 2023 from 38.27 million in 2022[9] - Monthly ARPU (Average Revenue Per User) for online music services increased from RMB 6.6 in 2022 to RMB 6.9 in 2023[9] - The total number of monthly active users reached 205.9 million, representing an 8.7% year-over-year growth, attributed to enhanced user experience and differentiated premium content[13] - The platform's daily active users to monthly active users ratio remained above 30%, indicating strong user engagement[14] - The company’s long audio content consumption increased by 70.9% compared to the previous year, indicating significant growth in user engagement[23] Product and Service Development - The company plans to enhance user engagement through differentiated products and innovative features[11] - The company expanded its music library to approximately 149 million songs by the end of 2023, focusing on diverse music genres to meet user preferences[16] - The company launched the "Cloud Ladder Plan 2023 Phase 1" at the beginning of 2023, optimizing revenue support for musicians with a more attractive settlement mechanism[21] - In September 2023, the company introduced the "Cloud Ladder Plan 2023 Phase 2" and a new "Appreciation" feature, enhancing interaction between musicians and fans, providing new monetization avenues for independent musicians[21] - The company introduced the "Private DJ" feature, combining music recommendations with personalized music introductions, enhancing user experience[25] - The company has developed AI-assisted tools for music creation, making the process more efficient and accessible for musicians[21] - The company has diversified its audio content offerings, including user-generated podcasts and professional content like audiobooks and radio dramas[23] Financial Management and Liquidity - The cash and cash equivalents increased to RMB 4.02 billion as of December 31, 2023, up from RMB 2.91 billion in 2022, indicating improved liquidity[45] - Operating cash inflow before changes in working capital was RMB 487.4 million in 2023, a recovery from an outflow of RMB 239.5 million in 2022[45] - The company reported a net cash increase of RMB 1.11 billion for the year, reflecting strong cash flow management[45] - The company aims to mitigate potential liquidity risks associated with a significant decrease in user numbers for online music and/or social entertainment services[45] Corporate Governance - The company is committed to maintaining compliance with the Hong Kong Stock Exchange regulations through its corporate governance practices[140] - The board includes independent directors with diverse expertise, such as Mr. Gu Xianfeng, a tenured professor at Stony Brook University[136] - The company has established a compensation committee to assist the board in formulating remuneration policies for directors and senior management[85] - The company has implemented a strict securities trading policy for directors and related insiders, confirming compliance during the reporting period[178] - The company has established three committees (audit, remuneration, and nomination) to oversee specific aspects of its affairs, each with a defined written scope of authority[191] Strategic Partnerships and Collaborations - The company successfully collaborated with top artists, achieving outstanding sales performance for albums, including a digital album by Eason Chan that ranked first across all music streaming platforms in China[18] - The company expanded its collaboration with NetEase games, embedding music players into popular game scenarios, enhancing user interaction with music[27] - The company provides services to NetEase Group, including traffic directing services for products and services published on its platform[108] Employee and Shareholder Information - The company employed 1,359 employees as of December 31, 2023, down from 1,540 employees in 2022[75] - The total employee compensation cost for the year was RMB 1,154.0 million, a decrease from RMB 1,203.2 million in the 2022 fiscal year[76] - The company has two active equity incentive plans: the 2016 Plan and the 2022 Restricted Share Unit Plan[151] - The purpose of the equity incentive plans is to link employee interests with shareholder returns and enhance business success[152] Risks and Compliance - The company faces significant uncertainty regarding the sustainability of its current corporate structure and operations due to the Foreign Investment Law[91] - Risks associated with the company's contractual arrangements include potential penalties from the Chinese government if agreements are deemed non-compliant with regulations[90] - The company relies on contractual arrangements with its VIE and its shareholders to conduct business in China, which may not be as effective as direct equity ownership[90]

Investment Rating - The report maintains a "Buy" rating for the company [2][5][6] Core Insights - The company achieved a revenue of 7.87 billion RMB in 2023, a year-over-year decrease of 13%, but the Non-IFRS net profit turned positive at 820 million RMB compared to a loss of 115 million RMB in 2022, indicating a significant recovery [5][6] - The online music segment saw a revenue increase of 18% year-over-year, reaching 4.4 billion RMB, driven by a 15% growth in paid users to 44.12 million, resulting in a paid user rate of 21.4% [5][6] - The company is refocusing on its core online music business, with a major app redesign planned for 2024 to enhance music discovery and community engagement [5][6] Financial Performance and Forecast - The comprehensive gross margin improved to 26.7% in 2023, with a notable increase to 28.7% in the second half of the year, attributed to reduced live streaming revenue sharing and scale effects from online music growth [6][7] - Revenue forecasts for 2024 and 2025 have been adjusted to 8.1 billion RMB and 9 billion RMB respectively, down from previous estimates of 12.9 billion RMB and 14.2 billion RMB, while Non-IFRS net profit forecasts have been raised to 940 million RMB and 1.14 billion RMB for the same years [6][7] - The target price is set at 111 HKD, reflecting a 22% upside potential from the current price [6][7]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][8]. Core Views - The online music business is experiencing healthy growth, with cost control and operational efficiency driving continuous improvement in profitability. The company achieved its first annual profit in 2023, despite a 12.5% year-on-year decrease in total revenue to 7.867 billion yuan, primarily due to a cautious operational strategy that reduced live streaming displays and lowered revenue sharing ratios, leading to a 33.6% decline in social entertainment services revenue to 3.516 billion yuan. Conversely, online music service revenue grew by 17.6% to 4.351 billion yuan, supported by strong commercialization performance and improved cost structure [5][6][10]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of 7.867 billion yuan, a decrease of 12.5% year-on-year. The online music service revenue increased by 17.6% to 4.351 billion yuan, while social entertainment services revenue decreased by 33.6% to 3.516 billion yuan. The company achieved a gross profit of 2.103 billion yuan, up 62.6% year-on-year, with a gross margin increase from 14.4% in 2022 to 26.7% in 2023. The adjusted net profit attributable to the parent company was 819 million yuan, marking the first annual profit [5][6][7][10]. User Metrics - The online music segment saw a significant increase in monthly active users (MAU), growing by 16.5 million to 206 million. The subscription revenue rose by 20.2%, and the average revenue per paying user (ARPPU) increased by 4.2% to 6.9 yuan per month. The paid user rate improved by 1.2 percentage points to 21.4% [6][10]. Future Projections - The company is expected to switch to a price-to-earnings (PE) valuation method, forecasting adjusted net profits of 1.065 billion yuan, 1.234 billion yuan, and 1.511 billion yuan for 2024, 2025, and 2026, respectively. The estimated revenue for 2024 is projected to be 8.460 billion yuan, with a year-on-year growth of 7.5% [6][7][10]. Valuation - Based on comparable companies, the company is assigned a dynamic PE range of 20-23 times for 2024, resulting in a fair value range of 109.22 to 125.61 Hong Kong dollars per share [8][10].

Investment Rating - The investment rating for the company is "Outperform the Market" [5][8] Core Views - The online music business is experiencing healthy growth, with cost control and operational efficiency driving continuous improvement in profitability. The company achieved its first annual profit in 2023, despite a 12.5% year-on-year decrease in total revenue to 7.867 billion yuan, primarily due to a cautious operational strategy that reduced live streaming displays and lowered revenue sharing ratios, leading to a 33.6% decline in social entertainment services revenue to 3.516 billion yuan. Conversely, online music service revenue grew by 17.6% to 4.351 billion yuan, supported by strong commercialization performance and improved cost structure [5][6][10]. Summary by Sections Financial Performance - In 2023, the company reported total revenue of 7.867 billion yuan, a decrease of 12.5% year-on-year. The online music service revenue increased by 17.6% to 4.351 billion yuan, while social entertainment services revenue decreased by 33.6% to 3.516 billion yuan. The company achieved a gross profit of 2.103 billion yuan, up 62.6% year-on-year, with a gross margin increase from 14.4% in 2022 to 26.7% in 2023. The adjusted net profit attributable to the parent company was 819 million yuan, marking the first annual profit [5][6][10]. User Metrics - The online music segment saw a significant increase in monthly active users (MAU), growing by 16.5 million to 206 million. The subscription revenue rose by 20.2%, and the average revenue per paying user (ARPPU) increased by 4.2% to 6.9 yuan per month. The paid user rate improved by 1.2 percentage points to 21.4% [6][10]. Future Projections - The company is expected to switch to a price-to-earnings (PE) valuation method, forecasting adjusted net profits of 1.065 billion yuan, 1.234 billion yuan, and 1.511 billion yuan for 2024, 2025, and 2026, respectively. The estimated revenue for 2024 is projected to be 8.460 billion yuan, with a year-on-year growth of 7.5% [7][10][11]. Valuation - Based on comparable companies, the company is assigned a dynamic PE range of 20-23 times for 2024, resulting in a fair value range of 109.22 to 125.61 Hong Kong dollars per share [8][10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 133.85, equivalent to RMB 121.47 [5][3]. Core Insights - The company's revenue for H2 2023 is projected at RMB 3.96 billion, reflecting a year-over-year decline of 16% but a slight increase of 1% compared to the previous half [2]. - The gross margin for H2 2023 is expected to be 28.7%, an increase of 13 percentage points year-over-year, primarily due to increased membership revenue diluting copyright costs [2]. - The net profit attributable to the parent company for H2 2023 is projected at RMB 440 million, showing a significant year-over-year increase of 793% [2]. - Online music revenue for H2 2023 is expected to reach RMB 2.32 billion, a year-over-year increase of 22%, driven by enhancements in the music library and copyright agreements with top labels [2]. - Social entertainment revenue for H2 2023 is projected at RMB 1.63 billion, a decline of 42% year-over-year, attributed to a more cautious operational strategy by management [2]. Financial Summary - The company’s projected net profits for 2023, 2024, and 2025 are RMB 734 million, RMB 1.036 billion, and RMB 1.521 billion respectively, reflecting significant growth from previous estimates [3]. - The expected revenue for 2023 is RMB 7.939 billion, with a projected decline of 11.7% year-over-year, followed by a slight recovery in 2024 [3]. - The gross margin is expected to improve from 26.7% in 2023 to 31.6% in 2024 and 35.4% in 2025, indicating a positive trend in profitability [3][9].

Investment Rating - The report maintains a "Buy" rating with an updated target price of HKD 110.64 [3][4]. Core Insights - The company's performance in 2023 exceeded expectations, achieving profitability for the year, driven by accelerated community commercialization and improved profitability [3][4]. - The adjusted net profit for 2023 reached RMB 8.19 billion, marking a significant turnaround from losses in previous years, with a net profit margin of 12.3% [3][4]. - The report highlights the potential for online music subscriptions, cost optimization in content services, and AI-driven community growth as key factors for future profitability [3][4]. Financial Overview - The company reported a total revenue of RMB 39.59 billion in the second half of 2023, a year-on-year decrease of 16.4%, but aligned with expectations due to strong online music performance [3][4]. - The gross profit margin improved to 29%, up 13 percentage points year-on-year, attributed to increased subscription sales and optimized content service costs [3][4]. - The adjusted net profit for the second half of 2023 was RMB 4.87 billion, a year-on-year increase of 375% [3][4]. User Metrics - The company achieved a monthly active user (MAU) count of 206 million in 2023, an increase of 8.7% year-on-year, with a stable daily active user (DAU) to MAU ratio above 30% [3][4]. - The number of registered independent musicians on the platform reached approximately 684,000, with a total music library of 149 million tracks [3][4]. Revenue Breakdown - Online music revenue for the second half of 2023 was RMB 23.30 billion, a year-on-year increase of 21.6%, with subscription revenue contributing RMB 19.40 billion, up 23% [3][4]. - The number of paying users reached 46.49 million, with a payment rate of 22.67% and an average revenue per paying user (ARPPU) of RMB 7, reflecting a 3.7% year-on-year increase [3][4]. - Social entertainment revenue was RMB 15.48 billion, down 42% year-on-year, indicating a need for recovery in this segment [3][4].