Core Viewpoint - The company reported a decline in revenue for 25H1 but showed significant growth in adjusted net profit, primarily due to deferred tax benefits and a strategic focus on online music business growth [1][2]. Financial Performance - The company achieved revenue of 3.83 billion yuan in 25H1, a year-over-year (yoy) decrease of 6.0% - Gross profit was 1.39 billion yuan, with a yoy decline of 2.3%, but the gross margin increased by 1.4 percentage points to 36.4% - Adjusted operating profit reached 910 million yuan, a yoy increase of 35.0% - Adjusted net profit was 1.95 billion yuan, reflecting a yoy increase of 121.0%, mainly due to the recognition of deferred tax credits amounting to 850 million yuan [1]. Cost Management - The company adopted a more prudent promotional strategy, leading to a reduction in promotional and advertising expenses - Sales, management, and R&D expenses were 163 million, 93 million, and 379 million yuan respectively, with yoy changes of -55.8%, +3.6%, and -4.2% - The sales expense ratio, management expense ratio, and R&D expense ratio decreased by 4.8 percentage points, increased by 0.2 percentage points, and decreased by 0.2 percentage points to 4.3%, 2.4%, and 9.9% respectively [1]. Business Focus - The online music business generated revenue of 2.967 billion yuan in 25H1, a yoy increase of 15.9% - Membership subscription revenue was 2.47 billion yuan, up 15.2% yoy, driven by strengthened music content and product optimization - Revenue from social entertainment services and other sources was 860 million yuan, down 43.1% yoy, due to cautious management of social entertainment business and ongoing optimization of business structure [1][2]. Content Ecosystem - As of June 2025, the number of registered independent musicians on the platform exceeded 819,000, with approximately 4.8 million tracks uploaded, creating a vast original content library - The company has demonstrated significant incubation capabilities, with songs produced in offline creation camps since 2021 accumulating over 6 billion total plays [1]. Strategic Partnerships - In 25H1, the company signed contracts with Korean labels RBW and StarShip to enrich its K-Pop content - Collaborations with top artists like Li Jian and Zhang Yixing were established, along with deep partnerships with Wang Jiaer for new releases [2]. Product Innovation - The company has simplified product interfaces and improved music recommendation systems, enhancing user experience and engagement - New features such as "Godlight Player" and "Music Card" were introduced, contributing to increased user activity with daily active users/monthly active users ratio remaining above 30% [2]. Future Revenue Projections - Projected revenues for the company are 7.94 billion, 8.60 billion, and 9.46 billion yuan for 2025E, 2026E, and 2027E respectively, with corresponding yoy changes of -0.1%, 8.3%, and 10.0% - Non-GAAP net profits are expected to be 2.91 billion, 2.50 billion, and 2.89 billion yuan for the same years, with yoy changes of 71.0%, -14.1%, and 15.8% respectively [3].

Core Viewpoint - NetEase Cloud Music has officially stated that it does not have a "visitor record" feature, ensuring that user privacy is maintained during interactions on the platform [1][4]. Group 1 - Multiple users inquired on social media about the existence of a visitor record feature on NetEase Cloud Music, prompting the company's response [4]. - The official statement from NetEase Cloud Music confirmed that actions such as visiting user or artist profiles do not generate visitor records or any other form of tracking [1][4]. - The platform emphasizes its commitment to user privacy, adhering to principles of user awareness, consent, and minimal necessity in data protection [4]. Group 2 - In March 2024, a user raised concerns about a small eye icon on the dynamic sharing page, questioning its meaning, which indicates ongoing user interest in privacy features [4]. - A customer service representative from NetEase Cloud Music acknowledged the inquiry and mentioned that a small-scale test for dynamic view counts had been completed, but it would not be displayed further [4].

Investment Rating - The report maintains a "Buy" rating for NetEase Cloud Music, indicating a positive outlook for the company's stock performance in the coming months [7]. Core Insights - The core music business shows steady growth, with a rich content ecosystem continuously expanding [3]. - In H1 2025, the company reported revenues of 3.83 billion yuan, a year-over-year decrease of 6.0%, while adjusted net profit surged by 121.0% to 1.95 billion yuan, primarily due to deferred tax credits [4][5]. - The online music segment generated 2.967 billion yuan in revenue, reflecting a year-over-year increase of 15.9%, driven by a rise in paid subscribers [4]. Financial Performance - The company achieved a gross profit of 1.39 billion yuan in H1 2025, with a gross margin of 36.4%, an increase of 1.4 percentage points year-over-year [3]. - Sales, management, and R&D expenses were reported at 163 million, 93 million, and 379 million yuan respectively, with significant reductions in sales expenses by 55.8% [3]. - Revenue projections for 2025E, 2026E, and 2027E are 7.94 billion, 8.60 billion, and 9.46 billion yuan, with corresponding year-over-year growth rates of -0.1%, 8.3%, and 10.0% [7]. Content Ecosystem - As of June 2025, the number of registered independent musicians exceeded 819,000, contributing to a vast library of approximately 4.8 million tracks [5]. - The company has signed contracts with various labels to enhance its copyright library, including partnerships with Korean labels and collaborations with prominent artists [5]. Product Innovation - Continuous product innovation has improved user experience, with features like the "Godlight Player" and enhanced music recommendation systems [6]. - The platform maintains a daily active user to monthly active user ratio of over 30%, indicating strong user engagement [6].

Core Points - NetEase Cloud Music has officially stated that it does not have a "visitor record" feature, ensuring that user interactions such as visiting user or artist profiles do not generate any visitor records [2][5] - The platform emphasizes its commitment to user privacy and security, adhering to principles of "user awareness, user consent, and minimum necessity" in its privacy protection policies [5] - Previous user inquiries about a potential visitor record feature have been noted, with the company indicating that any related functionalities are still under evaluation and not currently available [5]

Core Points - NetEase Cloud Music emphasizes that it does not have a "visitor record" feature, ensuring user privacy when browsing others' profiles [1][3] - The platform reassures users that actions such as visiting user or artist profiles do not generate visitor records or any other form of tracking [3] - NetEase Cloud Music prioritizes user privacy and adheres to principles of "user awareness, user consent, and minimum necessity" in its privacy protection policies [3] User Privacy Assurance - The company highlights its commitment to safeguarding user privacy and will not disclose any personal information without authorization [3] - Users are encouraged to provide feedback and suggestions to enhance their experience on the platform [3]

Group 1 - The core point of the article is that NetEase Cloud Music officially stated it does not have a "visitor record" feature, ensuring user privacy and security [1][2] - Users can visit profiles and music artist pages without generating any visitor records or other forms of tracking [1][2] - The platform emphasizes its commitment to user privacy, adhering to principles of user awareness, consent, and minimal necessity in data protection [2] Group 2 - There was a public inquiry on social media regarding the potential introduction of a visitor record feature on NetEase Cloud Music, which sparked significant attention [2] - In March 2024, a user raised a question about a small eye icon on the dynamic sharing page, which led to further speculation about visitor records [2] - A customer service representative from NetEase Cloud Music acknowledged the inquiry and mentioned that a small-scale test for dynamic reading volume had been completed, but it would not be displayed [2]

Core Viewpoint - NetEase Cloud Music emphasizes that it does not have a "visitor record" feature, ensuring user privacy and data protection [1] Group 1 - NetEase Cloud Music clarifies that actions such as visiting user profiles or musician pages do not generate visitor records [1] - The platform prioritizes user privacy and adheres to the principles of "user awareness, user consent, and minimum necessity" in its privacy protection policies [1] - The company will not disclose any personal information without authorization [1]

Core Viewpoint - Daiwa's report indicates that NetEase Cloud Music (09899) is expected to outperform in the first half of 2025, driven by a one-time tax benefit and improved operating profit margins [1] Financial Performance - The company's gross margin for online music services is anticipated to exceed expectations, alongside lower-than-expected marketing expenses [1] - Daiwa has raised its net profit forecasts for the next two years by 117% and 42% respectively [1] Rating and Target Price - Daiwa maintains a "Outperform" rating for NetEase Cloud Music, increasing the target price from 105 HKD to 310 HKD [1] - The new target price corresponds to a 27 times earnings forecast for 2026 [1]

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]