中金：维持网易云音乐 跑赢行业评级 目标价224港元

Core Viewpoint - The report from CICC maintains the Non-IFRS net profit forecast for NetEase Cloud Music (09899) for 2026 and 2027, with a target price of HKD 224, indicating a 22% upside from the current price [1]. Financial Performance - The 2025 Non-IFRS net profit of NetEase Cloud Music is in line with expectations, reporting revenue of RMB 7.759 billion and a Non-IFRS net profit of RMB 2.860 billion, both closely matching CICC's forecasts [2]. Music Business Outlook - The online music revenue for 2025 is projected at RMB 5.994 billion, reflecting a 12% year-on-year increase, driven by a 13.3% growth in subscription revenue and a 5.2% increase in non-subscription revenue. The company aims to expand its paid user base in 2026, with an expected 10.8% growth in online music revenue and a 12.1% increase in subscription revenue [3]. - Social entertainment and other revenues for 2025 are expected to decline by 32% to RMB 1.765 billion due to a cautious operational strategy, although there is a slight improvement in the second half of 2025 [3]. Profitability and Cost Management - The gross margin for 2025 is reported at 35.7%, an increase of 2 percentage points year-on-year. Operating expenses for sales, management, and R&D have decreased, indicating controlled spending. The company plans to increase investment in 2026, particularly in content costs and customer acquisition [4]. - The operating profit for 2026 is anticipated to grow by 20% to RMB 1.95 billion, supported by healthy growth in the music business [4]. Industry Dynamics and Innovation - The industry landscape is stabilizing, with concerns about competition. NetEase Cloud Music's user base remains relatively stable, and the company is focusing on user experience and innovation, including the launch of its AI-generated recommendation model, Climber [5]. - The company is positioned to differentiate itself in the market, with a focus on user retention and experience as key strategies [5].