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。 CLOUD MUSIC INC. 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） 截至2023年12月31日止年度的年度業績公告 董事會欣然宣佈本公司及其子公司（統稱「本集團」）截至2023年12月31日止年度 的未經審計合併業績。該等未經審計合併年度業績已由董事會的審計委員會連 同我們的管理層審閱。 截至12月31日止年度 2023年 2022年 變動(%) （人民幣千元，百分比除外） 收入 7,866,992 8,992,221 -12.5% 毛利 2,102,670 1,293,118 +62.6% 除所得稅前利潤╱（虧損） 767,679 (204,479) 不適用 年內利潤╱（虧損） 734,182 (221,494) 不適用 非《國際財務報告準則》計量： 經調整淨利潤╱（虧損）(1) 818,500 (114,573) 不適用 ...

Core Viewpoint - NetEase Cloud Music has launched a significant upgrade initiative by introducing the "Arranger Freedom Royalty" feature, which officially includes arrangers in the post-release royalty distribution of songs, aiming to provide fair compensation for their contributions [1] Group 1: Industry Impact - The introduction of the "Arranger Freedom Royalty" feature is expected to have a long-term and profound impact on the Chinese music industry, particularly in the emerging RAP music sector [1] - This initiative recognizes the status of arrangers within the industry, addressing the historical lack of respect and recognition for their contributions [1] Group 2: Copyright Structure - The copyright structure of songs is complex, involving multiple contributors such as lyricists, composers, arrangers, performers, and recording producers, each holding different rights [2][5] - Arrangers possess performance rights, reproduction rights, broadcasting rights, and moral rights, but their rights have not been effectively protected under current copyright laws [5][6] Group 3: Legal Nature of Arranger Rights - The legal definition of "arranger rights" remains ambiguous, with current copyright laws in China lacking specific provisions for the protection of arrangers [5][6] - Judicial practices indicate that arrangements may not qualify as independent works under copyright law due to the lack of originality required for protection [6] Group 4: Emerging Music Genres - In the context of RAP music, the creation of "beats" plays a crucial role, often surpassing traditional arrangements in importance, yet the legal classification of beats remains contentious [7][8] - The production of beats may be viewed as either arrangement or co-composition, highlighting the need for a reevaluation of the legal status of arrangers in modern music [8] Group 5: Conclusion - The move by NetEase Cloud Music to include arrangers in royalty distributions is a groundbreaking step, but further legal recognition and protection for arrangers' contributions are necessary to address the existing gaps in copyright law [9]

【TechWeb】1月30日消息，今日，网易云音乐针对幕后音乐人群体发布“编曲人自由版税”功能，将编曲人群体正式纳入歌曲发布后版税收益分成中。 当下，音乐版税分配体系不健全，编曲人在售卖其作品时，经常被采用最简单的“一口价”方式买断，购买者面对后续的“版税分成”这个问题，则是闭口不谈，编曲制作人的利益在这种情况下往往得不到应有的保障。 针对这一行业痛点，网易云音乐在词曲版税分成功能上进行了全新升级，将“编曲”身份纳入其中。据悉，网易云音乐在2022年上线了面向词曲创作者的词曲版税分成功能。 据介绍，编曲人自由版税为自定义分配收益模式，歌曲的创作者们可以根据作品的贡献度相互协商，自由定义歌曲的分配。在线上填写约定好的比例，系统会自动为上传者、词/曲及编曲作者分配收益。 网易云音乐方面披露的数据显示，该项目自去年12月上线试运行，不到20天，成功完成签约的音乐人已超300位。 ...

Revenue and Profitability - Revenue decreased by 8.2% to RMB 3,908.4 million for the six months ended June 30, 2023, compared to RMB 4,258.7 million for the same period in 2022[7]. - Gross profit increased by 79.7% to RMB 965.1 million for the six months ended June 30, 2023, up from RMB 537.1 million in the prior year[7]. - Net profit for the period was RMB 293.8 million, a turnaround from a net loss of RMB 270.8 million in the same period last year[10]. - Adjusted net profit for the six months ended June 30, 2023, was RMB 331.9 million, compared to an adjusted net loss of RMB 217.0 million in the same period last year[9]. - The company achieved positive operating profit and adjusted net profit for the first time in the first half of 2023[15]. - Operating profit for the six months ended June 30, 2023, was RMB 104,611 thousand, compared to an operating loss of RMB 301,015 thousand in the previous year[89]. - The total comprehensive income for the six months ended June 30, 2023, was RMB 528,113 thousand, compared to RMB 25,928 thousand for the same period in 2022[97]. User Engagement and Growth - Monthly active users for online music services reached 206.7 million, representing a year-on-year growth of 13.7%[15]. - The number of paying users for online music services increased to 41,750.9 thousand, up from 37,613.0 thousand in the previous year[13]. - Average revenue per paying user for online music services rose to RMB 6.8, compared to RMB 6.5 in the prior year[13]. - The daily active users to monthly active users ratio remained above 30%, indicating strong user engagement[15]. - The company focused on enhancing music-oriented content products and improving user experience to drive subscription growth[15]. - Membership subscription revenue increased by 16.7% year-over-year, driven by an expanded member base and improved revenue per paying user[16]. Cost Management and Financial Health - Operating costs decreased by 20.9% to RMB 2,943.2 million, attributed to improved cost control and reduced content service costs[32]. - Research and development expenses decreased by 8.5% to RMB 440.7 million, reflecting better cost management in technology development[36]. - Total operating costs, including sales and marketing expenses, general and administrative expenses, and R&D expenses, amounted to RMB 3,826,375 thousand for the six months ended June 30, 2023, compared to RMB 4,607,650 thousand in 2022, a decrease of approximately 16.9%[117]. - Content service costs for the six months ended June 30, 2023, were RMB 2,399,396 thousand, down from RMB 3,251,129 thousand in 2022, a reduction of about 26.3%[117]. Shareholder Information and Equity - As of June 30, 2023, the major shareholder, NetEase, holds 129,034,168 shares, representing 60.39% of the total shares[57]. - Shining Globe International Limited, controlled by Lei Ding, owns 1,450,300,000 shares, which is 45.0% of NetEase's total shares[55]. - Alibaba Group holds 20,733,975 shares, accounting for 9.70% of the total shares[57]. - The total number of issued shares as of June 30, 2023, is 213,667,126 shares[60]. - The total equity attributable to the company's equity holders increased from RMB 7,495,533 thousand as of June 30, 2022, to RMB 8,221,215 thousand as of June 30, 2023, reflecting a growth of 9.7%[97]. Corporate Governance and Compliance - The company has a commitment to high standards of corporate governance, which is deemed essential for the development of the group and the protection of shareholder interests[75]. - The board believes that the dual role of the chairman and CEO held by Ding Lei enhances the effectiveness and efficiency of strategic planning[76]. - The company will continue to regularly review and monitor its corporate governance practices to ensure compliance with the Corporate Governance Code[77]. - The company has adopted a securities trading policy that is no less stringent than the "Standard Code" outlined in the Listing Rules, ensuring compliance by all directors during the reporting period[78]. Cash Flow and Liquidity - The company's cash and cash equivalents decreased to RMB 2.6 billion as of June 30, 2023, down from RMB 2.9 billion as of December 31, 2022[44]. - Operating activities used net cash of RMB 372.9 million for the six months ended June 30, 2023, compared to a net cash inflow of RMB 782.6 million for the same period in 2022[45]. - The company believes it will meet liquidity needs through funds raised from its global offering and other capital market financing[44]. Stock Options and Incentive Plans - The company has two active equity incentive plans: the 2016 Plan and the 2022 Restricted Share Unit Plan[61]. - The total number of unexercised stock options as of June 30, 2023, was 5,277,325, a decrease of 46.3% from 9,818,500 in the same period of 2022[148]. - The company’s stock incentive plans are designed to align the interests of employees with those of shareholders, thereby enhancing overall performance and shareholder value[141]. - The total employee benefits expense recognized for equity-settled share-based payments was RMB 38,143,000 in the first half of 2023, down 29.1% from RMB 53,810,000 in the same period of 2022[158]. Regulatory and Legal Matters - The company reported a restriction on bank balances amounting to RMB 122,975,000 due to ongoing investigations by local regulatory authorities[168]. - The company has not recorded any provisions related to the ongoing investigations, indicating a cautious approach to potential financial impacts[168].

[5 -> 28] Good day, and thank you for standing by. Welcome to the Cloud Music, Inc. first half of 2023 earnings conference call. Please be advised that in the interest of time, the prepared remarks will be conducted in Chinese, and an English version can be found on the company's IR website. After the call, [29 -> 53] The English summary of Q&A and a webcast replay of this conference call will be available on the company's IR website. And now, I would like to hand the call over to Ms. Angela Shi, IR Directo ...

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，並表明概不就因本公告全部或任何部分內容而產生或因依賴該等 內容而引致的任何損失承擔任何責任。 CLOUD MUSIC INC. 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） 截至2023年6月30日止六個月的 中期業績公告 董事會欣然宣佈本公司及其子公司（統稱「本集團」）於報告期間（即截至2023年 6月30日止六個月）的未經審計合併業績。該等中期業績已由我們的核數師羅兵 咸永道會計師事務所按照國際核數及保證準則委員會頒佈的《國際審閱準則》第 2410號「由實體獨立核數師執行中期財務資料審閱」進行審閱，並經由董事會的 審計委員會審閱。 截至6月30日止六個月 2023年 2022年 變動(%) （未經審計）（未經審計） （人民幣千元，百分比除外） 收入 3,908,380 4,258,716 –8.2% 毛利 965,147 537,113 +79.7% ...

Financial Performance - Revenue increased by 28.5% from RMB 6,997,622,000 in 2021 to RMB 8,992,221,000 in 2022[5] - Gross profit surged by 806.3% from RMB 142,674,000 in 2021 to RMB 1,293,118,000 in 2022[5] - Net loss decreased by 89.2% from RMB 2,056,092,000 in 2021 to RMB 221,494,000 in 2022[5] - Adjusted net loss reduced by 89.0% from RMB 1,043,712,000 in 2021 to RMB 114,573,000 in 2022[7] - In 2022, the total revenue of the company increased by 28.5% year-on-year, driven primarily by the growth in subscription members and social entertainment services[15] - The adjusted net loss narrowed from RMB 1 billion in 2021 to RMB 100 million in 2022, with positive operating cash flow achieved in 2022[16] - The company recorded revenue of RMB 8.99 billion and gross profit of RMB 1.29 billion for the year 2022, with a net loss of RMB 2.22 billion compared to RMB 20.56 billion in 2021[27] - The adjusted net loss decreased by 89.0% from RMB 1 billion in 2021 to RMB 0.11 billion in 2022, primarily due to increased net revenue and improved cost control[27] User Engagement and Growth - Monthly active users for online music services reached 189.4 million in 2022, up from 182.6 million in 2021[10] - Monthly paying users for online music services increased to 38,267.1 thousand in 2022 from 28,940.4 thousand in 2021[11] - The paid user conversion rate improved from 15.8% in 2021 to 20.2% in 2022, supported by enhanced user experience and expanded membership benefits[15] - Daily active users spent an average of 78.9 minutes per day listening to music on the platform, an increase from 78.2 minutes in 2021[21] - 33.4% of music plays on the platform were generated from recommendations, indicating strong user engagement and platform stickiness[21] Revenue Streams - Online music service revenue rose by 12.4% from RMB 3,290.0 million in 2021 to RMB 3,698.8 million in 2022, driven by a significant increase in subscription sales[28] - Social entertainment services and other revenue surged by 42.8% from RMB 3,707.6 million in 2021 to RMB 5,293.4 million in 2022[29] Cost Management and Profitability - The gross margin increased significantly from 2.0% in 2021 to 14.4% in 2022, attributed to economies of scale and optimized cost structure[16] - Operating costs increased by 12.3% from RMB 6,854.9 million in 2021 to RMB 7,699.1 million in 2022, primarily due to rising content service costs[30] Research and Development - Research and development expenses amounted to RMB 1.01 billion, representing 11.3% of total revenue for 2022[26] - Research and development expenses increased by 16.3% from RMB 869.1 million in 2021 to RMB 1,011.1 million in 2022, reflecting investments in innovation and platform optimization[34] Strategic Initiatives - The company aims to convert more users to paying subscribers and enhance monetization capabilities[10] - Plans for 2023 include enhancing community engagement through interactive features and optimizing user experience to increase subscription willingness[16] - The company will continue to explore commercialization opportunities and expand listening scenarios through multi-terminal layouts and potential gamification initiatives[16] Content and Partnerships - The content library expanded to over 116 million music tracks by the end of 2022, including collaborations with major music labels[17] - The company aims to deepen partnerships with copyright holders to enhance its content offerings, including a recent agreement with Believe Music[18] - The company has provided services to over 611,000 registered independent musicians, contributing approximately 2.6 million music tracks to its content library[18] Corporate Governance and Management - The board includes independent directors with diverse backgrounds, enhancing governance and strategic oversight, such as Mr. Gu and Mr. Xu, who have academic and professional expertise[118][119] - The management team includes Mr. Ding as the CEO and Mr. Zhang as the Vice President of Commercialization and Marketing, who joined in November 2022, bringing experience from NetEase and Tencent[120] - The company has a strong focus on product development, with Mr. Zhang and Mr. Zhang serving as Vice Presidents for commercialization and product management, respectively, indicating a commitment to innovation[120] Risk Management - The company acknowledges that risk management is crucial for operational success, facing significant risks from overall market conditions and regulatory changes in the Chinese internet, music, live streaming, and online telecommunications industries[171] - The company has implemented a comprehensive risk management policy to identify, assess, and monitor key risks related to strategic objectives, including financial reporting and compliance risks[171] Shareholder Relations - The company emphasizes effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[180] - The company has established multiple channels for ongoing dialogue with shareholders, including annual reports, interim reports, and quarterly reports[180] Compliance and Ethics - The company has adopted a whistleblowing policy for employees to report misconduct confidentially to the internal audit department[175] - The company has implemented anti-corruption policies and conducts ongoing training to foster a culture of integrity[175]

Financial Performance - Revenue increased by 33.8% to RMB 4,258.7 million for the six months ended June 30, 2022, compared to RMB 3,183.7 million for the same period in 2021[9] - Gross profit turned positive at RMB 537.1 million for the six months ended June 30, 2022, compared to a gross loss of RMB 12.9 million for the same period in 2021[10] - Loss before income tax decreased by 93.0% to RMB 266.8 million for the six months ended June 30, 2022, from RMB 3,807.0 million in the same period of 2021[9] - Adjusted net loss reduced by 59.3% to RMB 217.0 million for the six months ended June 30, 2022, compared to RMB 533.0 million for the same period in 2021[11] - The loss for the period decreased by 92.9% from RMB 3.8 billion for the six months ended June 30, 2021, to RMB 270.8 million for the same period in 2022[36] - The net loss attributable to equity holders for H1 2022 was RMB 270,810 thousand, a significant improvement from a net loss of RMB 3,809,147 thousand in H1 2021[95] User Metrics - Monthly active users for online music services decreased to 181.9 million as of June 30, 2022, from 184.5 million in the same period of 2021[14] - Monthly paying users for online music services increased to 37.6 million as of June 30, 2022, from 26.1 million in the same period of 2021[15] - Monthly paying users for social entertainment services increased to 1.2 million as of June 30, 2022, from 496.4 thousand in the same period of 2021[15] - Users spent an average of 80.6 minutes per day listening to music on the platform, up from 76.9 minutes in the first half of 2021[19] - 31.4% of music plays came from platform recommendations as of June 30, 2022, an increase from 30.5% a year earlier[19] Revenue Breakdown - Online music service revenue rose by 11.2% from RMB 1.604 billion to RMB 1.784 billion, driven by a significant increase in subscription sales[26] - Social entertainment services and other revenue surged by 56.7% from RMB 1.579 billion to RMB 2.475 billion, with monthly paying users increasing from 496.4 thousand to 1.2 million[26] - Total revenue increased by 33.8% year-on-year in the first half of 2022, despite challenging industry conditions[17] - Revenue recognized at a point in time was RMB 2,525,548 thousand for the six months ended June 30, 2022, compared to RMB 1,705,639 thousand in the previous year, indicating a growth of approximately 48.2%[87] - Revenue recognized over time was RMB 1,733,168 thousand for the six months ended June 30, 2022, up from RMB 1,478,035 thousand in the same period of 2021, marking an increase of about 17.3%[87] Cost and Expenses - Operating costs increased by 16.4% to RMB 3.7 billion, primarily due to rising content service costs[27] - Research and development expenses rose by 14.6% to RMB 481.5 million, attributed to higher employee-related costs and technology development expenses[31] - Total operating costs, including sales and marketing expenses, general and administrative expenses, and R&D expenses, amounted to RMB 4,607,650 thousand in H1 2022, compared to RMB 3,902,029 thousand in H1 2021, reflecting an 18.1% increase[89] - Content service costs increased to RMB 3,251,129 thousand in H1 2022 from RMB 2,759,391 thousand in H1 2021, representing a growth of 17.8%[89] Cash Flow and Liquidity - Cash and cash equivalents increased to RMB 1.86 billion as of June 30, 2022, from RMB 476.149 million as of June 30, 2021[41] - Operating cash flow for the six months ended June 30, 2022, was RMB 782.551 million, compared to a cash outflow of RMB 748.015 million for the same period in 2021[41] - The company’s cash needs are primarily funded through cash flows from financing and investments, with a significant reliance on external financing[40] - The company plans to utilize funds raised from its global offering and other capital market financing to meet liquidity needs in the future[40] Shareholder Information - Shining Globe International Limited holds 128,364,668 shares of the company, representing 61.35% of the total issued shares as of June 30, 2022[51] - The company has a total of 209,245,601 issued shares as of June 30, 2022[52] - The company’s major shareholder, Mr. Ding Lei, holds 44.2% of the shares, amounting to 1,450,300,000 shares[47] - Alibaba Group holds 20,733,975 shares, representing 9.91% of the total shares[51] - GIC Private Limited holds 13,923,356 shares, which is 6.65% of the total shares[51] Employee and Compensation - Total employee compensation cost for the six months ended June 30, 2022, was RMB 573.7 million, up from RMB 550.3 million for the same period in 2021[42] - As of June 30, 2022, the company had 1,526 employees, an increase from 1,192 employees as of June 30, 2021[42] - The company has a stock incentive plan that allows for the issuance of up to 15,000,000 Class A ordinary shares, aimed at attracting and retaining outstanding performers[112] Corporate Governance - The company has complied with the corporate governance code and has no reported violations of the standard code during the reporting period[58] - The board believes that the dual role of the chairman and CEO enhances strategic planning and decision-making efficiency[58] Future Outlook - The company aims to convert more users to paying subscribers and enhance monetization capabilities[14] - The company aims to enhance user engagement and monetization through innovative product offerings and improved user experience[18] - The company continues to explore market expansion opportunities and new product development, although specific details were not provided in the content[134]