Core Viewpoint - Daiwa's report indicates that NetEase Cloud Music (09899) exceeded profit expectations for the first half of 2025, primarily driven by a one-time tax benefit and improved operating profit margins [1] Group 1: Financial Performance - The company is expected to see a growth in gross margin for online music services, surpassing previous expectations [1] - Daiwa has raised its net profit forecasts for the next two years by 117% and 42% respectively [1] Group 2: Ratings and Price Target - Daiwa maintains a "Outperform" rating for NetEase Cloud Music [1] - The target price has been increased from HKD 105 to HKD 310, which corresponds to a 27 times earnings forecast for 2026 [1]

Core Viewpoint - NetEase Cloud Music's profitability exceeded expectations in the first half of the year, primarily due to a one-time tax benefit and an increase in operating profit margin [2] Revenue Forecast - Daiwa has lowered NetEase Cloud Music's revenue forecasts for the next two years by 11% and 10.9% respectively, due to the company's reduced investment in non-strategic live streaming business [2] Profit Forecast - Despite the revenue forecast adjustments, Daiwa has raised the net profit predictions for the next two years by 117% and 42% respectively, driven by anticipated growth in online music service gross margins and lower-than-expected marketing expenses [2] Rating and Target Price - Daiwa reiterated its "Outperform" rating for NetEase Cloud Music and raised the target price from HKD 105 to HKD 310 [2]

Core Viewpoint - Daiwa's report indicates that NetEase Cloud Music's profitability in the first half of the year exceeded expectations, primarily driven by a one-time tax benefit and improved operating profit margins [1] Revenue Forecast - The company has reduced its revenue forecasts for NetEase Cloud Music by 11% and 10.9% for the next two years due to a decreased focus on non-strategic live streaming business [1] Profitability Outlook - Despite the revenue forecast reduction, Daiwa has raised its net profit predictions for the next two years by 117% and 42%, citing anticipated growth in gross margins for online music services and lower-than-expected marketing expenses [1] Rating and Target Price - Daiwa maintains a "Outperform" rating for NetEase Cloud Music, increasing the target price from HKD 105 to HKD 310, which corresponds to a 27 times earnings forecast for 2026 [1]

Macro Insights - The economic growth rate in August is expected to be supported by exports and consumption policies, despite a significant slowdown in the real estate sector, with a target of 5% annual growth remaining achievable [1][15][12] - The industrial added value in July grew by 5.7% year-on-year, with the manufacturing sector showing resilience, particularly in high-tech products and equipment manufacturing [12][13] - Fixed asset investment growth slowed to 1.6% year-on-year in the first seven months, primarily due to a decline in real estate investment, which fell by 12% [13][14] Strategy Insights - Current channels for resident capital entering the market include increasing financing balances and active personal investor accounts, leading to a positive feedback loop in the market [2] - The "anti-involution" market trend can be analyzed through policy expectations and real-world transmission, indicating a shift from theme-driven to profit-driven market dynamics [2] - The technology and small-cap sectors are expected to continue outperforming as more external funds enter the market [2] Industry Reports - The consumer electronics sector is anticipated to see significant opportunities with the upcoming release of new products, particularly in AI-related applications [8] - The coal mining industry is experiencing a continuous improvement in fundamentals, with the price of thermal coal expected to rise [8] - The healthcare sector, particularly innovative drugs, is projected to maintain a positive outlook due to improved profitability [8]

Core Viewpoint - The online music industry is becoming a profitable business, with significant revenue growth reported by major players like Tencent Music and NetEase Cloud Music, driven by improved copyright management and user payment habits [1][3][6]. Financial Performance - Tencent Music reported total revenue of 8.44 billion yuan for Q2 2025, a year-on-year increase of 17.9%, with online music service revenue growing by 26.4% to 6.85 billion yuan [1]. - NetEase Cloud Music's revenue for the first half of 2025 was 3.827 billion yuan, a decrease of 6% from the previous year, but online music service revenue increased by 15.9% to 2.967 billion yuan [1]. - Tencent Music's adjusted net profit for the quarter was 2.64 billion yuan, up 33% year-on-year [1]. Market Dynamics - Online music services now account for 80% of Tencent Music's total revenue and 77.5% of NetEase Cloud Music's total revenue, a significant shift from 2018 when these figures were much lower [2]. - The competitive landscape has evolved, with Tencent Music and NetEase Cloud Music now focusing on online music services rather than social entertainment services, which previously dominated their revenue streams [2][3]. Copyright Management - The decline of music piracy in China, from 95% to below 5%, has been pivotal in the growth of the digital music industry, leading to a "copyright accumulation competition" among platforms [4]. - Tencent Music has secured exclusive rights to a significant portion of the music library, forcing competitors like NetEase Cloud Music to pay high prices for licensing [4][5]. - The copyright wars have driven up the prices of music rights, but they have also fostered a culture of paid subscriptions among users [6][7]. User Engagement and Payment Models - Tencent Music's online music subscription revenue reached 4.38 billion yuan in Q2 2023, with a 17.1% year-on-year growth, and the number of paying users increased to 124 million [7]. - NetEase Cloud Music's subscription revenue grew to 2.47 billion yuan, a 15.2% increase [7]. - The platforms have developed a tiered subscription model to enhance user engagement and payment rates, effectively turning music into a sustainable profit-generating business [7]. Competitive Landscape - The rise of new players like "Soda Music" and "Tomato Listening" is challenging the dominance of Tencent Music and NetEase Cloud Music, leveraging lower subscription fees and algorithm-driven user engagement [14][15]. - The competition is intensifying as these new entrants utilize short video platforms to attract users, creating a potential shift in the market dynamics [14][17]. - The future of the online music industry may evolve into a three-way competition, with Tencent Music, NetEase Cloud Music, and new entrants vying for market share [17].

网易云音乐(09899)发布公告，本公司于2025年8月21日向若干合资格参与者(作为承授人)授出2.86万股 奖励。 ...

Core Viewpoint - NetEase Cloud Music (09899) announced that it will grant 28,600 shares as rewards to several qualified participants on August 21, 2025 [1] Company Summary - The company is set to issue a total of 28,600 shares as part of its incentive program [1]

格隆汇8月21日丨网易云音乐(09899.HK)公告，公司于2025年8月21日向若干合资格参与者(作为承授人) 授出数目28,622股奖励。 ...

網易雲音樂股份有限公司 （於開曼群島註冊成立的有限公司） （股份代號：9899） 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 NETEASE CLOUD MUSIC INC. 歸屬期及時間表 根據2022年計劃授出現股獎勵 茲提述本公司的2022年計劃。董事會謹此宣佈，本公司於2025年8月21日向若干 合資格參與者（作為承授人）授出獎勵。授出詳情如下： 承授人： 承授人及彼等授出的概要載列如下： 承授人 授出獎勵數目 僱員參與者8名人士 28,622 歸屬： 購買價 於歸屬時，每股獎勵股份的購買價為零。 每項授出自2025年9月1日起總歸屬期為三年，並應於三年 內平均歸屬。 其他主要限制： 表現目標 就各承授人而言，於各歸屬日期，歸屬的獎勵部分須視乎 承授人於歸屬日期前一年期間的業績表現是否達到指定門 檻而定。 1 授出日期： 2025年8月21日 每股市價： 於授出日期的每股收市價為290.60港元。 退扣機制 就授出的每項獎勵而言，於承授人 ...

Investment Rating - The report maintains a "Buy" rating for NetEase Cloud Music (9899.HK) with a target price of 293.51 HKD [5][3] Core Views - The introduction of well-known Korean music labels and the promotion of original music are expected to drive growth in online music MAU (Monthly Active Users) [3][8] - The company reported a 25H1 revenue of 3.83 billion CNY, a year-on-year decrease of 6%, which was slightly below Bloomberg's expectations [8] - The net profit attributable to the parent company for 25H1 was 1.89 billion CNY, a year-on-year increase of 133%, exceeding Bloomberg's expectations by 57% [8] Financial Forecasts and Investment Recommendations - The forecast for net profit attributable to the parent company for 2025-2027 is 2.81 billion, 2.17 billion, and 2.54 billion CNY respectively [3] - The revenue for 2025 is expected to be 7.93 billion CNY, with a slight decrease of 0.2% year-on-year, followed by a growth of 9.7% in 2026 [10] - The report anticipates that the online music revenue for 25H2 may reach 3.2 billion CNY, reflecting a year-on-year growth of 15% [8] - The company is focusing on its core music business while adjusting its social entertainment segment, which saw a significant decline in revenue [8] Key Financial Metrics - The company's gross margin for 25H1 was 36%, which was 2 percentage points higher than Bloomberg's expectations [8] - The projected earnings per share for 2025 is 12.91 CNY, with a net profit margin of 35.4% [10] - The price-to-earnings ratio for 2025 is estimated at 19.7 times, while the price-to-book ratio is projected at 4.3 times [10]