Core Viewpoint - Cloud Music Inc. reported strong financial results for the first half of 2024, showcasing significant growth in revenue and profitability, driven by its core online music services and enhanced user engagement strategies [1][3]. Financial Performance - Revenue for the first half of 2024 was RMB 4.07 billion, a 4.1% increase from RMB 3.91 billion in the same period of 2023 [2][3]. - Gross profit rose to RMB 1.43 billion, reflecting a 47.7% increase compared to RMB 965.1 million in the prior year [2][3]. - Profit before income tax reached RMB 813.6 million, up from RMB 311.9 million year-over-year [2]. - Net profit for the period was RMB 809.9 million, compared to RMB 293.8 million in the same period of 2023 [2][3]. - Adjusted net profit was RMB 880.7 million, significantly higher than RMB 331.9 million in the previous year [2][3]. Business Overview - The company focused on enhancing its core music business and fostering a vibrant community, leading to improved profitability and user engagement [5][6]. - Revenue from online music services increased by 26.6% to RMB 2.6 billion, driven by a rise in monthly paying users [3][8]. - Social entertainment services revenue decreased to RMB 1.5 billion from RMB 1.9 billion in the previous year [3]. User Engagement and Community - The daily active user to monthly active user ratio remained above 30%, indicating stable user engagement [6]. - The company implemented a comprehensive app upgrade to enhance personalized recommendations and user interaction [26][28]. - The iconic Comments section was revitalized, leading to increased user-generated content and interactions [28][29]. Content Strategy - The company expanded its content library by partnering with major Korean music labels and supporting independent artists [7][13]. - Focus on signature music genres, particularly hip-hop, was emphasized through collaborations and in-house productions [15][22]. - The introduction of innovative features and premium offerings contributed to a 25.5% year-over-year growth in subscription-based memberships [8][9]. Future Outlook - The company plans to diversify and enhance its content offerings while nurturing its music-oriented community [10][11]. - Strategies include improving user experience, deepening engagement, and enhancing membership privileges [10][11]. - Continued focus on profitability through economies of scale and operational efficiency is a priority [11].

Core Viewpoint - NetEase, Inc. is expected to report Q2 earnings with a focus on its mobile gaming segment and financial health, maintaining a buy rating due to promising game releases and a strong cash position [1][5]. Financial Expectations - Analysts predict a top line of $3.65 billion, with non-GAAP EPS at $1.67 and GAAP EPS at $1.52, indicating a sequential revenue decline of approximately 2% but a year-over-year growth of about 10% [2]. - The company has missed revenue expectations in 6 out of the last 10 quarters, while only missing EPS once [2]. Game Releases and Updates - The mobile game Eggy Party is anticipated to receive further updates, crucial for maintaining player engagement, as it is over two years old [3]. - Naraka: Bladepoint Mobile, released in China, has over 40 million pre-registrations and is projected to generate $880 million in its first year, contributing around 6% to total FY23 revenues [3]. - Once Human has received positive reviews, and there is interest in its potential console release [3]. - Marvel Rivals has shown improved reception post-closed beta, with expectations for it to generate revenue if the free-to-play model is executed well [4]. Financial Position and Margins - As of Q1 '24, NetEase holds nearly $19 billion in cash and equivalents with minimal debt of $59 million, indicating a robust financial position [4]. - Gross margins are expected to be in the range of 69%-70%, with a year-over-year improvement of around 300 basis points noted in the last quarter [4]. Market Outlook - The company is expected to perform decently in Q2, with future quarters being critical for assessing top-line growth [5]. - The mobile gaming market, particularly in Asia, presents significant opportunities for growth, as many gamers seek engaging mobile experiences [5].

Company Overview - Cloud Music Inc. is a leading interactive music streaming service provider in China, launched in 2013 by NetEase, Inc. [3] - The platform is recognized for its vibrant content community and focuses on personalized recommendations, user interaction, and promoting emerging musicians [3] - It has become a popular destination for exploring new and independent music, particularly among China's Generation Z community [3] Financial Reporting - The company will report its financial results for the first half of 2024, ending June 30, 2024, on August 22, 2024, after the Hong Kong market closes [1] - An earnings conference call will be hosted by the company's management at 7:00 p.m. Beijing/Hong Kong Time on the same day [1] - Participants must register online to receive dial-in numbers, an event passcode, and a personal access PIN for the conference call [1] Conference Call Details - A replay of the conference call will be accessible by phone until August 29, 2024, with specific numbers provided for different regions [2] - A live and archived webcast of the conference call will also be available on the company's investor relations website [2]

HANGZHOU, China, Aug. 5, 2024 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES and HKEX: 9999, "NetEase" or the "Company"), a leading internet and game services provider, today announced that it will report financial results for the 2024 second quarter on Thursday, August 22, 2024, before the open of the U.S. markets.The earnings teleconference call with simultaneous webcast will take place at 8:00 a.m. Eastern Time on Thursday, August 22, 2024 (Beijing/Hong Kong Time: 8:00 p.m., Thursday, August 22, 2024). NetE ...

HANGZHOU, China, July 17, 2024 /PRNewswire/ -- Cloud Music Inc. (HKEX: 9899, "NetEase Cloud Music" or the "Company"), a leading interactive music streaming service provider in China, today announced that it has entered into a special partnership with Timbaland's Beatclub™ ("Beatclub") to unleash creativity and foster innovation across China's growing music scene. Under the collaboration, hundreds of signature, premium Beatclub beats will be introduced to NetEase Cloud Music's Beatsoul, China's premier beat ...

Investment Rating - The report maintains a Buy rating on NetEase Inc. (NTES/9999.HK) with a 12-month target price of US$125/HK$196 [7][38]. Core Insights - Improving fundamentals are noted, particularly with the confirmed release date of Naraka Bladepoint Mobile on July 25, 2024, and positive feedback from the second round of testing [2][38]. - The report highlights that the competition risk from Tencent's Honour of Fight is likely milder than expected, suggesting potential coexistence of both games within the same genre [3]. - The potential revamp of the publishing team for Where Wind Meet PC is mentioned, indicating a strategic move in response to market conditions [6][13]. Summary by Sections Game Launch and Market Response - Naraka Bladepoint Mobile's launch announcement led to a 6% increase in NetEase's share price on June 26, 2024, aligning with market expectations [2]. - Positive feedback from the second round of testing for Naraka Bladepoint Mobile indicates improved performance optimization [2][12]. Competitive Landscape - The report assesses Tencent's Honour of Fight, suggesting that its earlier stage of development may allow for coexistence with Naraka Bladepoint, despite both being in the action royale genre [3]. - The report notes that 88 out of 170+ FWJ PC servers are experiencing currency depreciation week-over-week, while some servers show early signs of improvement [3][13]. Valuation and Financial Metrics - The report indicates a total return potential of 34.4% based on the current share price of US$93.04 [17][39]. - Financial metrics include a projected revenue increase from Rmb 103,468.2 million in 2023 to Rmb 132,829.2 million by 2026, alongside an EBITDA growth from Rmb 33,966.2 million to Rmb 44,162.1 million in the same period [40].

Investment Rating - The report maintains a "Buy" rating for the company [4][21]. Core Views - The launch of the mobile game "Naraka: Bladepoint" on July 25 is expected to drive significant growth in the mobile gaming sector, with over 30 million pre-registrations [1]. - The company is projected to achieve mobile game revenues of 2 billion RMB in Q3 and 4.4 billion RMB in 2024, contributing 8% and 5% to total mobile revenue respectively [1]. - Despite a slowdown in mobile game growth and adjustments in PC games, the current stock price reflects these challenges, indicating potential for valuation recovery in the second half of 2024 [2]. - The anticipated recovery in PC game revenue and the new mobile game launch enhances the certainty of revenue growth [3]. Financial Projections - The company expects a 15% year-on-year increase in mobile game revenue for Q2, with a slight decline of 9% quarter-on-quarter due to seasonal factors [7]. - For the full year, mobile game revenue is projected to grow by 13% [7]. - Revenue forecasts for the upcoming years are as follows: - 2024: 110.16 billion RMB (6.5% growth) - 2025: 121.36 billion RMB (10.2% growth) - 2026: 132.49 billion RMB (9.2% growth) [8]. - Net profit is expected to reach 33.02 billion RMB in 2024, with a slight increase to 35.84 billion RMB in 2025 [8]. Market Performance - The company's stock closed at 96.74 USD, with a target price of 117.00 USD, indicating a potential upside of 20.9% [3][21]. - The stock has shown a year-to-date change of 3.84% [5]. Game Revenue Breakdown - The breakdown of game revenue for Q2 2024 is as follows: - Total revenue: 25.11 billion RMB - Mobile games: 14.54 billion RMB - PC games: 4.07 billion RMB [18]. Valuation Metrics - The report suggests that the current valuation is below the industry average, with a projected P/E ratio of 18 times for the gaming business in 2024 [2]. - The company’s market capitalization is approximately 120.26 billion USD [5]. Conclusion - The report emphasizes the positive outlook for the company driven by new game launches and expected recovery in revenue, supporting the "Buy" rating [2][3].

Investment Rating - The report maintains an "OUTPERFORM" rating for the company with a target price of US$116 based on a 15x FY24E core NP valuation [3][27]. Core Insights - The adjustments made to the game "梦幻西游" (Dream of the West) are expected to extend its lifecycle, despite market concerns leading to a stock price decline of over 10% since May 21 [27]. - The negative impacts of these adjustments have already been reflected in Q1 2024, with signs of recovery observed in recent gaming performance [27]. - The company is anticipated to benefit from a rich pipeline of games set to launch in Q3 2024, which could provide significant revenue flexibility [21][42]. Summary by Sections - The economic system of "梦幻西游" has remained relatively stable over the past 20 years, with the average price of in-game currency (梦幻币) maintaining around 237 RMB [28]. - The game employs a unique monetization strategy that includes point cards, transaction commissions, and in-game purchases, with point card revenue being the largest contributor [8][30]. - Recent adjustments aimed at reducing random probability gameplay and item liquidity are intended to combat non-standard trading behaviors and enhance the core gaming experience [39][41]. - The adjustments have led to a recovery in gold prices in over 40% of the game servers, indicating a positive trend for player engagement and potential revenue recovery [32][39].

Investment Rating - The report maintains a "Buy" rating for the company [2][9][10] Core Insights - The company's Q1 2024 revenue reached 26.85 billion RMB, a year-on-year increase of 7%, which is in line with consensus expectations. Adjusted net profit was 8.51 billion RMB, up 12% year-on-year, slightly exceeding consensus by 2.2% [4][9] - The gross margin improved to 63.4%, surpassing consensus expectations by 1.6 percentage points. The gaming segment continues to show strong growth, with online gaming revenue at 20.4 billion RMB, a 10% year-on-year increase [4][5] Financial Performance - Q1 2024 revenue breakdown shows online gaming revenue at 20.4 billion RMB, with mobile gaming revenue at 16.1 billion RMB, up 19% year-on-year, marking a historical high [5][11] - The company has adjusted its revenue forecasts for 2024 and 2025 to 112.2 billion RMB and 122.5 billion RMB respectively, while also increasing the net profit forecasts for the same years to 34.1 billion RMB and 37.9 billion RMB [9][11] Business Segments - The gaming segment remains robust, with deferred revenue indicating a strong foundation for future growth. The upcoming FPS game "Firefly Assault" is set to launch on June 6, with other key titles expected in the summer [5][11] - Cloud music revenue grew by 4% year-on-year, with a gross margin of 38%, reflecting significant improvement in profitability. The main app has undergone a major revision to focus on music discovery [6][11] Shareholder Returns - The company announced a cash dividend of 0.495 USD per ADR in Q1, totaling 2.26 billion RMB, with a payout ratio of approximately 26.6%. The total shareholder return from dividends and buybacks in 2023 was about 2.3 billion USD, corresponding to a return ratio of nearly 4% [9][11]

Investment Rating - The investment rating for the company is "Outperform the Market" [3][24][13] Core Insights - In Q1 2024, the company achieved a revenue of 26.9 billion yuan, representing a year-on-year growth of 7%. The growth was primarily driven by mobile gaming and Youdao, partially offset by a decline in PC gaming revenue [22][29] - The company's overall gross margin improved to 63%, up by 4 percentage points year-on-year, with gaming and value-added services gross margin at 69.5%, an increase of 3 percentage points [22][27] - Non-GAAP net profit for Q1 2024 was 8.5 billion yuan, a 12% increase year-on-year, with a Non-GAAP net profit margin of 32%, up by 1 percentage point [22][29] Summary by Sections Gaming Business - Online gaming revenue reached 20.43 billion yuan, a 10% increase year-on-year, with mobile gaming revenue at 16.1 billion yuan, growing by 19% due to strong performances from titles like "Party of Eggs" and "Identity V" [22][30] - PC gaming revenue decreased by 15% to 4.4 billion yuan, mainly due to the suspension of Blizzard games. The company has renewed its distribution agreement with Blizzard to reintroduce their games to the Chinese market [22][30] - The company plans to complete adjustments to "Fantasy Westward Journey" in the first half of this year to enhance long-term player engagement [22][31] Youdao - Youdao's net revenue for Q1 2024 was 1.4 billion yuan, a 20% increase year-on-year, with advertising revenue doubling to 490 million yuan, marking a historical high [22][32] - The strategic focus on digital content services and AI-driven subscription services has led to profitability over two consecutive quarters [22][32] Cloud Music - Cloud Music reported a net revenue of 2 billion yuan in Q1 2024, a 4% increase year-on-year, with a gross margin of 37.97%, up by 15.5 percentage points due to improved cost control [23][33] Financial Forecast - The company maintains a robust product pipeline with expected releases such as "Eternal Return" and "Yanyun Sixteen Sounds" in the second half of the year. The adjusted net profit forecasts for 2024-2026 are 36 billion, 38.6 billion, and 41.2 billion yuan respectively [22][13][26]