Core Viewpoint - The company reported 2025 performance that aligns with expectations, showing a slight decline in revenue but stable Non-IFRS net profit, indicating resilience in its business model [1][2]. Performance Review - In 2025, the company achieved revenue of 7.759 billion yuan, a decrease of 2.4%, which is in line with expectations but slightly below Bloomberg consensus [1]. - Non-IFRS net profit for 2025 was 2.860 billion yuan, meeting both internal and external forecasts [1]. Development Trends - The online music segment is expected to see growth in both volume and price in 2026, with a projected revenue increase of 10.8% year-on-year [1]. - Online music revenue for 2025 was 5.994 billion yuan, reflecting a 12% increase, driven by a 13.3% rise in subscription revenue [1]. - Social entertainment revenue for 2025 was 1.765 billion yuan, down 32%, but showed slight improvement in the second half of 2025 [1]. Profitability and Cost Management - The gross margin for 2025 improved to 35.7%, up 2 percentage points year-on-year, while sales, management, and R&D expenses decreased [2]. - The company plans to increase investment in 2026, focusing on content costs and customer acquisition [2]. - Operating profit is expected to grow by 20% in 2026, reaching 1.95 billion yuan [2]. Industry Outlook - The industry is experiencing stabilization, with user experience and continuous innovation being key focus areas [2]. - The company has launched its AI-driven recommendation model, Climber, to enhance user engagement and differentiate itself in the market [2]. - Despite competitive pressures, the company is expected to maintain a stable user base and mitigate risks from competitors' strategies [2]. Profit Forecast and Valuation - The company maintains its Non-IFRS net profit forecasts for 2026 and 2027, with current price corresponding to 16/15 times the Non-IFRS P/E for those years [2]. - The target price has been adjusted down by 31% to 224 HKD, reflecting a 22% upside potential from the current price [2].
网易云音乐(09899.HK)：注重用户体验且持续创新 关注后续量价趋势