Financial Performance - For the six months ended June 30, 2024, the company reported revenue of RMB 4,070,493 thousand, representing a 4.1% increase compared to RMB 3,908,380 thousand in the same period of 2023[6]. - Gross profit for the same period was RMB 1,425,731 thousand, a significant increase of 47.7% from RMB 965,147 thousand year-over-year[6]. - The company achieved a profit before income tax of RMB 813,578 thousand, marking a substantial increase of 160.8% compared to RMB 311,961 thousand in the previous year[6]. - Net profit for the period was RMB 809,949 thousand, reflecting a remarkable growth of 175.7% from RMB 293,750 thousand in the prior year[6]. - Adjusted net profit, which excludes certain equity settlement items, reached RMB 880,749 thousand, up 165.4% from RMB 331,893 thousand in the same period last year[6]. - Operating profit surged to RMB 599,933,000, a substantial rise from RMB 104,611,000 in 2023, representing an increase of 472.5%[47]. - Basic earnings per share for the first half of 2024 were RMB 3.88, compared to RMB 1.39 in 2023, reflecting a growth of 179.1%[48]. - The company's profit attributable to equity holders for the six months ended June 30, 2024, was RMB 809,832,000, a significant increase from RMB 293,750,000 in the same period of 2023, representing a growth of 175.5%[47]. - Adjusted net profit for the same period was RMB 880,749,000, compared to RMB 331,893,000 in 2023, reflecting a year-over-year increase of 164.5%[47]. - Total revenue for the first half of 2024 reached RMB 4,070,493,000, up from RMB 3,908,380,000 in 2023, marking an increase of 4.1%[47]. Revenue Breakdown - Online music service revenue increased by 26.6% to RMB 2,559.7 million, driven by a rise in subscription sales[30]. - Social entertainment service revenue decreased by 19.9% to RMB 1,510.8 million, reflecting a more cautious operational strategy[31]. - The cost of content services decreased to RMB 2,014,439, down 16% from RMB 2,399,396 in 2023[60]. - Total comprehensive income for the first half of 2024 was RMB 850,054,000, compared to RMB 528,113,000 in 2023, indicating an increase of 60.9%[48]. User Engagement and Content Strategy - Subscription revenue grew by 25.5% year-over-year, driven by an increase in the number of subscribers[12]. - Daily active users to monthly active users ratio remained above 30%, indicating strong user engagement[11]. - The company is focusing on expanding its content library, particularly in niche music genres like rap, to cater to diverse user preferences[12]. - The company expanded its music label library in the first half of 2024, collaborating with major Korean labels like JYP Entertainment and Kakao Entertainment, as well as Chinese labels like KC DIGITAL and Guoran Entertainment[16]. - The platform registered over 732,000 independent musicians by June 2024, with approximately 3.6 million music tracks uploaded, enhancing the support system for emerging musicians, particularly in niche genres like rap[17]. - The average listening time for long audio content per user increased by 49.4% in the first half of 2024, driven by enhanced quality content attracting long audio users and encouraging deeper consumption[20]. - The company focused on producing popular rap tracks and successfully launched several well-received songs, including the Henan dialect rap song "5:20 AM" and the instrumental piece "Farewell Letter" in the first half of 2024[21]. - The company enhanced user experience by optimizing music discovery and listening experiences, contributing to increased user engagement and retention[24]. - The company actively expanded its PGC long audio content reserve, including self-produced audio dramas that resonated well with the young user demographic, proving effective in attracting new users[22]. - The company strengthened partnerships with copyright holders, enhancing the content supply of niche music genres to cater to the preferences of its young audience[15]. - The company implemented product innovations and optimizations in the "NetEase Cloud Music" app, focusing on personalized content recommendations and community engagement, which improved user experience and interaction[23]. Cost Management and Financial Health - Operating costs decreased by 10.1% to RMB 2,644.8 million, primarily due to a reduction in content service costs[32]. - Research and development expenses decreased by 10.2% to RMB 395.6 million, attributed to improved resource utilization[37]. - Financial net income increased to RMB 214.4 million from RMB 208.6 million, due to a continuous increase in deposit amounts[40]. - Tax expenses decreased significantly from RMB 18.2 million in 2023 to RMB 3.6 million in 2024, mainly due to reduced withholding tax on interest income[41]. - Cash and cash equivalents decreased to RMB 2,560,079,000 from RMB 4,020,400,000 at the end of 2023, a decline of 36.3%[50]. - The company's total equity attributable to equity holders increased to RMB 9,309,325,000 from RMB 8,440,902,000, reflecting a growth of 10.3%[52]. - Total assets as of June 30, 2024, amounted to RMB 12,448,703,000, an increase from RMB 11,610,551,000 at the end of 2023, representing a growth of 7.2%[50]. Corporate Governance and Compliance - The company has adopted and complied with all applicable provisions of the Corporate Governance Code, with the exception of the separation of roles between the Chairman and CEO, which is currently held by Mr. Ding Lei[76]. - The interim financial results for the six months ended June 30, 2024, have been reviewed by the audit committee and are unaudited, with no disagreements on accounting treatment between the board and the audit committee[77]. - The company will continue to regularly review and monitor its corporate governance practices to ensure compliance with the Corporate Governance Code[76]. - The audit committee consists of three independent non-executive directors, ensuring oversight of financial reporting and internal controls[77]. - The company will reassess the separation of roles between the Chairman and CEO in the future, considering the overall situation of the group[76]. - The company did not declare or pay any dividends for the six months ended June 30, 2024, and 2023[69]. - The board has decided not to declare an interim dividend for the reporting period[80]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[78]. - The interim results announcement will be published on the Hong Kong Stock Exchange website and the company's website, with timely distribution to shareholders upon request[81]. - The company expects to utilize the remaining net proceeds from the global offering within the next 30 months[79].
云音乐(09899) - 2024 - 中期业绩