Investment Rating - The report maintains a **Buy** rating for NetEase (NTES US) with a target price of **$131.5**, slightly adjusted from the previous target of **$130.5** [4][5] Core Views - NetEase's Q1 2024 revenue grew **7% YoY** to **RMB 26.9 billion**, in line with expectations, while non-GAAP net income grew **12% YoY** to **RMB 8.5 billion**, **2% above consensus**, driven by better-than-expected performance in gaming and music businesses [4] - The report is optimistic about **game revenue growth re-accelerating in 2H24E**, supported by a strong pipeline of new games, including *Where Winds Meet* (July 2024) and *Marvel Rivals* (3Q24E) [4] - Non-gaming businesses, particularly cloud music and Youdao, showed **quality growth**, with cloud music revenue up **4% YoY** to **RMB 2.03 billion** and Youdao revenue up **20% YoY** to **RMB 1.39 billion** [4] - Gross profit margin (GPM) improved by **3.9 percentage points YoY** to **63.4%**, driven by strong expansion in gaming and music GPM [4] - Operating profit margin (OPM) is expected to increase from **26.8% in FY23** to **28.6% in FY24E** and **29.7% in FY25E**, supported by GPM expansion and efficiency improvements [4] Financial Forecasts - Revenue is projected to grow from **RMB 103.5 billion in FY23** to **RMB 126.9 billion in FY26E**, with a **CAGR of 7.1%** [4][14] - Adjusted net income is expected to grow from **RMB 32.6 billion in FY23** to **RMB 39.3 billion in FY26E**, with a **CAGR of 6.4%** [4][14] - Gross margin is forecasted to improve from **60.9% in FY23** to **64.2% in FY26E**, while operating margin is expected to rise from **26.8% in FY23** to **30.8% in FY26E** [4][14] Valuation - The **Sum-of-the-Parts (SOTP)** valuation method is used, with the target price of **$131.5** comprising: - **Online gaming business**: **$122.2** (92.9% of total valuation), based on **14x 2024E EV/EBIT** [19] - **Cloud music business**: **$3.0** (2.3% of total valuation), based on **2.9x 2024E EV/Revenue** [8] - **Youdao business**: **$2.0** (1.5% of total valuation), based on **2.8x 2024E EV/Revenue** [1] - **Innovative businesses**: **$2.3** (1.8% of total valuation), based on **1.2x 2024E EV/Revenue** [20] - **Net cash**: **$2.0** [8] Industry Comparison - NetEase's gaming business valuation multiple (**14x 2024E EV/EBIT**) is in line with industry peers such as Tencent (**17x**) and Electronic Arts (**16x**) [26] - The cloud music business valuation multiple (**2.9x 2024E EV/Revenue**) is comparable to Spotify (**3.3x**) and Tencent Music Entertainment (**5.3x**) [26]

Investment Rating - The report maintains a "BUY" rating for the company, with a target price of US$131.50, representing a potential upside of 38.8% from the current price of US$94.74 [4][5]. Core Insights - The company reported a total revenue increase of 7% year-over-year to RMB26.9 billion in 1Q24, aligning with estimates. Non-GAAP net income grew by 12% year-over-year to RMB8.5 billion, exceeding consensus estimates due to strong performance in the games and music business [5]. - The forecast for FY24-26 non-GAAP net income has been raised by 2-5% to reflect better-than-expected gross profit margin (GPM) expansion [5]. - Game revenue is expected to accelerate in the second half of 2024, supported by a strong game pipeline, despite potential short-term volatility from game adjustments and competition [5]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are RMB111.2 billion, RMB119.4 billion, and RMB126.9 billion, respectively, with a slight decrease of 0.7% from previous estimates [1]. - Gross profit is expected to reach RMB70.3 billion in FY24E, with a gross margin of 63.2%, reflecting a 1.5% increase from prior estimates [1]. - Adjusted net profit is projected at RMB33.9 billion for FY24E, with an adjusted net margin of 30.5% [1]. - The company’s cash flow from operations is expected to grow from RMB35.3 billion in 2023A to RMB34.9 billion in 2024E, indicating strong operational efficiency [3]. Growth and Profitability - Revenue growth rates are projected at 7.5% for FY24E, 7.3% for FY25E, and 6.3% for FY26E, with adjusted net profit growth rates of 4.1%, 7.3%, and 7.9% for the same periods [19]. - The overall gross profit margin is anticipated to improve to 63.4% in 1Q24, driven by strong GPM expansion in the games and music sectors [5]. Valuation - The sum-of-the-parts (SOTP) valuation methodology indicates a valuation of US$122.2 billion for the online game business, which constitutes 92.9% of the total valuation [26]. - The valuation for the Cloud Music business is estimated at US$3.0 billion, based on a multiple of 2.9x 2024E EV/revenue, aligning with industry averages [6][27].

Financial Performance - NetEase reported total net revenues of RMB 26,852 million (approximately $3,719 million), a 7.2% increase year-over-year[38] - Games and related value-added services contributed RMB 21,460 million (approximately $2,972 million) to net revenues, up 6.9% year-over-year[38] - Net income attributable to the company's shareholders was RMB 7,634 million (approximately $1,057 million), a 13% increase year-over-year[38] - The company's balance sheet shows cash and cash equivalents of RMB 43,027 million (approximately $5,959 million) as of March 31, 2024[36] Business Segments - Youdao's net revenues increased by 19.7% year-over-year to RMB 1,392 million (approximately $193 million)[38] - Cloud Music's net revenues increased by 3.6% year-over-year to RMB 2,030 million (approximately $281 million)[38] - Innovative businesses and others' net revenues increased by 6.1% year-over-year to RMB 1,970 million (approximately $273 million)[38] Games Highlights - Fantasy Westward Journey mobile achieved another record-high quarterly revenue, nine years after its launch[18] - Identity V achieved a strong performance in the first quarter with continued momentum during its sixth anniversary celebration event with record-high DAUs in May[19] Shareholder Returns - The company declared a dividend per ADS of $0.49500 for Q1 2024[31] - Share buybacks amounted to $167 million in Q1 2024[31]

Financial Data and Key Metrics Changes - Total net revenue for Q1 2024 was RMB26.9 billion (approximately $3.7 billion), representing a 7.2% year-over-year increase [61] - Total net revenue from games and related value-added services was RMB21.5 billion, up 7% year-over-year, driven by newly launched games and sustainably developed titles [61] - Gross profit margin improved to 63.4% in Q1 2024 from 59.5% in the same period last year [62] - Non-GAAP net income attributable to shareholders for Q1 totaled RMB8.5 billion (approximately $1.2 billion), up 12.5% year-over-year [65] - Cash position remained robust with net cash of approximately RMB113.4 billion as of March 31, 2024, compared to RMB110.9 billion at the end of 2023 [65] Business Line Data and Key Metrics Changes - Mobile games accounted for approximately 79% of total net revenue from online game operations [36] - Youdao's net revenue was RMB1.4 billion, a year-over-year increase of 19.7%, primarily due to online marketing services [36] - Gross profit margin for Youdao decreased to 49% from 51.7% in the same period last year due to a higher revenue portion from online marketing services [37] - Cloud Music's gross profit margin increased to 38% from 22.4% in the same period last year, attributed to increased membership revenue and cost optimization [63] Market Data and Key Metrics Changes - Racing Master achieved significant success in both domestic and international markets, ranking number one on the iOS grossing chart in Taiwan and Macau [24] - Eggy Party reached over 40 million daily active users (DAUs) and expanded its thematic diversity [22] - Identity V celebrated its sixth anniversary with record-breaking revenue and DAU [21] Company Strategy and Development Direction - The company is focusing on expanding its game portfolio, particularly in the shooting game genre, to capture a larger market share [4] - There is a commitment to innovation in gameplay and technology, with plans to introduce new titles and enhance existing ones [43][51] - The company aims to strengthen its R&D capabilities and partnerships to broaden its genre base and reach global markets [53] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term sustainability of their games, emphasizing the importance of player enjoyment and engagement [74] - The company is actively working on titles for the global market, with successful games already established in regions like Japan [103] - Management noted that they have not observed a significant downgrade in consumer spending on games, attributing this to the emotional value provided by their offerings [116] Other Important Information - The company is committed to ESG practices, showcasing a reduction in greenhouse gas emissions by 11% compared to 2022 [34] - A renewed agreement with Blizzard Entertainment was announced to bring beloved titles back to China [54] Q&A Session Summary Question: What is the outlook for the Naraka: Bladepoint mobile version? - Management indicated that the testing phase validated innovations and boosted team confidence, with a launch expected during the summer vacation [93] Question: What is the status of the Condor Hero game? - Management confirmed that the game is performing within expectations and is undergoing upgrades for longevity [68] Question: What is the future game pipeline beyond 2025? - Management stated that details will be disclosed at the appropriate time, emphasizing ongoing development efforts [100] Question: How is the company addressing the consumption downgrade trend in China? - Management noted no significant changes in gamer spending patterns, highlighting the emotional value of their games [116]

Financial Performance - NetEase reported Q1 2024 net revenue of RMB 26.9 billion (USD 3.7 billion), a year-over-year increase of 7.2%[3] - Gross profit for Q1 2024 was RMB 17.0 billion (USD 2.4 billion), representing a 14.2% year-over-year increase[3] - Operating expenses totaled RMB 9.4 billion (USD 1.3 billion), an increase of 22.4% year-over-year[3] - Net profit attributable to shareholders was RMB 7.6 billion (USD 1.1 billion), with a non-GAAP net profit of RMB 8.5 billion (USD 1.2 billion)[4] - Basic earnings per share were USD 0.33, with a non-GAAP basic earnings per share of USD 0.37[4] - The company reported a net profit attributable to shareholders of RMB 7.6 billion ($1.1 billion) in Q1 2024, compared to RMB 6.6 billion in the previous quarter and RMB 6.8 billion year-over-year[12] - The net income for the three months ended March 31, 2024, was RMB 6,582,263 thousand, compared to RMB 6,754,634 thousand for the three months ended December 31, 2023, indicating a slight decrease of about 2.55%[23] - The company reported a net cash inflow from financing activities of RMB 5,139,264 for the three months ended March 31, 2024, compared to a net cash inflow of RMB 572,429 for the same period in 2023, showing a substantial increase[24] Revenue Breakdown - Revenue from games and related value-added services reached RMB 21.5 billion (USD 3.0 billion), up 7.0% year-over-year, with online games contributing approximately 95.2% of this segment's revenue[7] - Youdao's net revenue was RMB 1.4 billion (USD 192.8 million), reflecting a 19.7% year-over-year increase[3] - Cloud Music generated net revenue of RMB 2.0 billion (USD 281.1 million), a 3.6% increase year-over-year[3] - In Q1 2024, net revenue from innovation and other businesses was RMB 2 billion ($272.8 million), down from RMB 2.8 billion in the previous quarter and up from RMB 1.9 billion year-over-year[8] - Total net revenue from online games and related value-added services was RMB 20,921,355 for the three months ended March 31, 2024, compared to RMB 20,065,597 for the same period in 2023, representing an increase of 4.3%[25] - The total revenue from Youdao was RMB 1,480,521 for the three months ended March 31, 2024, compared to RMB 1,163,270 for the same period in 2023, marking an increase of 27.3%[25] - The total revenue from Cloud Music was RMB 1,985,548 for the three months ended March 31, 2024, compared to RMB 1,959,841 for the same period in 2023, reflecting a slight increase of 1.3%[25] Expenses and Costs - Operating expenses totaled RMB 9.4 billion ($1.3 billion) in Q1 2024, down from RMB 10 billion in the previous quarter and up from RMB 7.7 billion year-over-year[9] - Research and development expenses for the three months ended March 31, 2024, were RMB 4,479,219 thousand, compared to RMB 3,749,732 thousand for the three months ended December 31, 2023, marking an increase of about 19.5%[23] - The company's general and administrative expenses for the quarter ending March 31, 2024, were RMB 40,114 thousand, a decrease from RMB 289,636 thousand in the previous quarter[27] - The company’s sales and marketing expenses for the quarter ending March 31, 2024, were RMB 2,475 thousand, reflecting a decrease from RMB 17,869 thousand in the previous quarter[27] Cash and Assets - As of March 31, 2024, the company's net cash balance was RMB 113.4 billion ($15.7 billion), up from RMB 110.9 billion at the end of 2023[14] - The company's cash and cash equivalents decreased to RMB 21,428,902 thousand as of March 31, 2024, down from RMB 43,026,904 thousand as of December 31, 2023, reflecting a decline of approximately 50.19%[22] - Cash and cash equivalents at the end of March 31, 2024, were RMB 24,206,658, up from RMB 18,158,066 at the beginning of the period, indicating a net increase of RMB 6,048,592[24] - The total assets of the company amounted to RMB 195,064,872 thousand, an increase from RMB 185,924,978 thousand as of December 31, 2023, representing a growth of approximately 6.15%[22] Strategic Initiatives - The company plans to release several anticipated new games, including "Yanyun Shiliu Sheng" and "Marvel: Contest of Champions," in the upcoming quarters[5] - NetEase has updated its distribution agreement with Blizzard Entertainment to reintroduce popular games to the Chinese market and is expanding collaboration with Microsoft Gaming[5] - NetEase's self-developed R&D team focuses on mobile, PC, and console game development, positioning itself among the industry's leaders[19] - The company integrates cultural and educational elements into games, enhancing user engagement and community value[19] - NetEase's strategic focus includes developing innovative online services and expanding its global operations[20] Non-GAAP Metrics - Non-GAAP financial metrics are used to assess operational performance, excluding stock-based compensation expenses from net profit attributable to shareholders[21] - The non-GAAP net profit attributable to shareholders is defined as net profit excluding stock-based compensation, providing a clearer view of operational performance[21] - The company emphasizes that non-GAAP metrics should not be viewed in isolation and have limitations compared to GAAP metrics[21] - The net profit attributable to shareholders under non-GAAP for the quarter ending March 31, 2024, was RMB 876,898 thousand, up from RMB 797,194 thousand for the previous quarter, reflecting a growth of approximately 10%[29] - Basic non-GAAP earnings per share for the quarter ending March 31, 2024, was RMB 2.65, compared to RMB 2.35 for the same quarter in 2023, marking an increase of about 12.8%[29] - The diluted non-GAAP earnings per American Depositary Share (ADS) for the quarter ending March 31, 2024, was $1.84, compared to $1.81 for the previous quarter, showing a slight increase of approximately 1.7%[29] Risks and Challenges - Forward-looking statements indicate potential risks, including the online gaming market's growth sustainability and NetEase's ability to maintain its market position[20] - Risks related to government regulation changes and cybersecurity threats may adversely affect NetEase's operations and financial performance[20] - The company encourages a comprehensive review of its financial information rather than relying on any single financial metric[21] Upcoming Events - The company will hold a conference call on May 23, 2024, to discuss quarterly performance and answer questions[17]

Financial Performance - NetEase reported a net income attributable to shareholders of RMB7.6 billion (US$1.1 billion) for Q1 2024, an increase from RMB6.6 billion in the previous quarter and RMB6.8 billion in Q1 2023[14]. - Non-GAAP net income attributable to shareholders was RMB8.5 billion (US$1.2 billion) for Q1 2024, compared to RMB7.4 billion in the previous quarter and RMB7.6 billion in Q1 2023[14]. - Basic net income per share for Q1 2024 was US$0.33 (US$1.65 per ADS), compared to US$0.28 (US$1.42 per ADS) in the previous quarter and US$0.29 (US$1.45 per ADS) in Q1 2023[14]. - Net income attributable to shareholders was RMB 7.6 billion (US$ 1.1 billion), with non-GAAP net income at RMB 8.5 billion (US$ 1.2 billion)[21]. - The non-GAAP net income attributable to shareholders for the current period was RMB 8,510,844, reflecting a year-over-year growth of 12.5% from RMB 7,566,234[49]. - Basic non-GAAP net income per share increased to RMB 2.65, up from RMB 2.35 in the previous year, representing a growth of 12.8%[49]. - Diluted non-GAAP net income per ADS rose to RMB 13.25, compared to RMB 11.74 in the same quarter last year, marking a 12.9% increase[49]. Revenue and Profitability - Net revenues for Q1 2024 were RMB 26.9 billion (US$ 3.7 billion), a 7.2% increase year-over-year[21]. - Gross profit for Q1 2024 was RMB 17.0 billion (US$ 2.4 billion), reflecting a 14.2% increase from the previous year[21]. - The gross profit margin for games and related services was 69.5% in Q1 2024, consistent with the previous quarter and up from 66.7% in Q1 2023[3]. - The gross profit margin for Cloud Music improved to 38.0% in Q1 2024, up from 30.3% in the previous quarter and 22.4% in Q1 2023[3]. - Mobile games accounted for approximately 78.6% of net revenues from online games in Q1 2024, up from 72.3% in Q1 2023[22]. Operating Expenses and Cash Flow - Total operating expenses for Q1 2024 were RMB9.4 billion (US$1.3 billion), down from RMB10.0 billion in the previous quarter and up from RMB7.7 billion in Q1 2023[13]. - Cash flows from operating activities were RMB9.6 billion (US$1.3 billion) for Q1 2024, compared to RMB11.8 billion in the previous quarter and RMB6.0 billion in Q1 2023[14]. - The company incurred share-based compensation costs of RMB 894,300 for the three months ended March 31, 2024, compared to RMB 812,987 in the previous quarter[37]. - Net cash provided by operating activities was RMB 9,557,169 for the three months ended March 31, 2024[37]. - Net cash used in investing activities amounted to RMB 12,859,889 for the same period, a significant increase compared to RMB 10,724,675 in the previous quarter[37]. - Net cash provided by financing activities was RMB 572,429 for the three months ended March 31, 2024, compared to RMB 5,139,264 in the previous quarter[37]. Strategic Focus and Market Position - The company remains focused on innovation and market expansion, particularly through its subsidiaries Cloud Music and Youdao, aiming to enhance user experiences and create value[2]. - The company anticipates continued growth in the online games market, although it acknowledges potential risks that could impact its market position[44]. - NetEase is focused on developing new online services and maintaining its competitive edge in the industry[44]. - The company is also exploring international expansion opportunities to enhance its business operations[44]. - Management highlighted the importance of addressing cybersecurity threats as part of their operational strategy[44]. Other Financial Metrics - The effective tax rate for Q1 2024 was 16.0%, compared to 13.8% in the previous quarter and 19.5% in Q1 2023[4]. - As of March 31, 2024, NetEase's net cash totaled RMB113.4 billion (US$15.7 billion), an increase from RMB110.9 billion as of December 31, 2023[14]. - The board of directors approved a dividend of US$0.0990 per share for the first quarter of 2024, payable on or around June 21, 2024[43]. - NetEase's cash, cash equivalents, and restricted cash at the end of the period were RMB 46,085,520[37]. - The company experienced an unrealized exchange loss of RMB (17,509) for the three months ended March 31, 2024[37]. - Fluctuations in the value of the Renminbi against other currencies may pose risks to NetEase's financial results[44].

Financial Performance - Net revenues for Q1 2024 were RMB 26.9 billion (US$ 3.7 billion), a 7.2% increase year-over-year [2][6] - Gross profit for Q1 2024 was RMB 17.0 billion (US$ 2.4 billion), reflecting a 14.2% increase compared to Q1 2023 [2][8] - Net income attributable to shareholders was RMB 7.6 billion (US$ 1.1 billion), up from RMB 6.8 billion in Q1 2023 [2][13] - Non-GAAP net income attributable to shareholders was RMB 8.5 billion (US$ 1.2 billion), compared to RMB 7.6 billion in Q1 2023 [2][14] Segment Performance - Game and related value-added services net revenues were RMB 21.5 billion (US$ 3.0 billion), a 7.0% increase year-over-year [2][6] - Youdao net revenues were RMB 1.4 billion (US$ 192.8 million), a 19.7% increase compared to Q1 2023 [2][7] - Cloud Music net revenues remained stable at RMB 2.0 billion (US$ 281.1 million) [2][7] - Innovative businesses and others generated RMB 2.0 billion (US$ 272.8 million), a 6.1% increase year-over-year [2][7] Operational Highlights - Established game franchises maintained high popularity, with titles like Identity V achieving record-high daily active users during its sixth anniversary [3][4] - Dunk City Dynasty topped iOS download charts in multiple regions shortly after its launch [3][4] - Youdao focused on digital content and AI-driven services, achieving its first sequential quarter of positive net income [3][5] - Cloud Music upgraded its app to enhance user experience and drive long-term growth [3][5] Cost and Expenses - Total operating expenses for Q1 2024 were RMB 9.4 billion (US$ 1.3 billion), a 22.4% increase year-over-year [2][12] - Gross profit margin for games and related services was 69.5%, consistent with the previous quarter and up from 66.7% in Q1 2023 [9][10] Cash Flow and Financial Position - As of March 31, 2024, net cash totaled RMB 113.4 billion (US$ 15.7 billion), an increase from RMB 110.9 billion at the end of 2023 [15] - Net cash provided by operating activities was RMB 9.6 billion (US$ 1.3 billion) for Q1 2024 [15][31] Dividend and Share Repurchase - The board approved a dividend of US$ 0.0990 per share for Q1 2024, payable on June 17, 2024 [16] - As of March 31, 2024, approximately 8.9 million ADSs had been repurchased under a US$ 5.0 billion share repurchase program [18]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][5] Core Views - The company is expected to accelerate growth with the launch of multiple new games, with over 10 new titles announced, including "Firefly Assault" and "Yanyun Sixteen Sounds," which have already received approval for release [5] - The company maintains its profit forecasts for 2024-2026, projecting net profits of 33.9 billion, 37.3 billion, and 40.4 billion CNY respectively, with corresponding EPS of 10.5, 11.6, and 12.6 CNY [5] - The company has a diverse product matrix that continues to yield successful products, driving long-term growth [6] - The company is expanding its global product cycle, which may further open up growth opportunities in overseas markets [7] Financial Summary - The company's total revenue for 2022 was 96.5 billion CNY, with a projected increase to 118.1 billion CNY in 2024, reflecting a year-on-year growth of 14.2% [8] - The net profit for 2022 was 20.3 billion CNY, expected to rise to 33.9 billion CNY in 2024, indicating a year-on-year growth of 15.1% [8] - The gross margin is projected to improve from 54.7% in 2022 to 61.7% in 2024, while the net margin is expected to remain stable around 28% [8]

Core Insights - NetEase, Inc. announced a diverse product lineup and plans for over 40 game franchises at its annual product launch event on May 20, 2024 [1][2] - The event showcased new game titles and updates, including Where Winds Meet, NARAKA: BLADEPOINT Mobile, Once Human, Ashfall, and Lost Light, aimed at domestic audiences [1] - The company also revealed plans for expanding existing popular titles through new content, crossovers, and events [1] Group 1 - The annual product launch event, first introduced in 2015, serves as a celebration for developers, players, and partners, highlighting NetEase's commitment to providing exhilarating gaming experiences [2] - NetEase operates a vast gaming ecosystem, developing and managing some of the most popular mobile and PC games in China and globally [3] - The company is supported by one of the largest in-house game R&D teams, focusing on creating superior gaming experiences and delivering value to its community [3] Group 2 - Beyond gaming, NetEase has majority-controlled subsidiaries such as Youdao, an intelligent learning company, and Cloud Music, an online music platform, enhancing its service offerings [4]

Core Viewpoint - Cloud Music Inc. has entered into a licensing agreement with Kakao Entertainment Corp. to distribute Kakao's music catalog in China, aiming to enhance the presence of K-Pop and Korean artists among Chinese music enthusiasts [1][7]. Group 1: Agreement Details - The agreement allows for diverse strategies to promote Kakao Entertainment's catalog and artists, targeting younger audiences in China [2][5]. - Both companies will collaborate to promote Korean music and enhance the quality of content available on NetEase Cloud Music [2][6]. Group 2: Kakao Entertainment Overview - Kakao Entertainment, established in 2010, has a diversified portfolio that includes webtoons, films, talent management, and K-Pop, with significant influence in the global music market [2][3]. - The company holds distribution rights for 70,000 tracks and features over 50 prominent K-Pop artists, contributing to its global popularity [3]. Group 3: NetEase Cloud Music Overview - NetEase Cloud Music is a leading online music platform in China, boasting 206 million monthly active users and over 44 million paying subscribers as of 2023 [4]. - The platform is known for its community atmosphere and advanced personalized recommendations, which enhance user engagement and artist-audience interaction [4][5]. Group 4: Strategic Implications - The partnership is expected to leverage NetEase Cloud Music's popularity among younger users to facilitate the distribution of Kakao's content, enhancing the connection between Korean artists and their Chinese fan base [5][6]. - NetEase Cloud Music has been expanding its music catalog, reaching approximately 149 million cumulative tracks by the end of 2023, and has established agreements with several top record labels [8].