Core Viewpoint - The report from CICC maintains the Non-IFRS net profit forecast for NetEase Cloud Music (09899) for 2026/27, with a target price of HKD 224, indicating a 22% upside from the current price [1] Financial Performance - For 2025, the company's revenue reached RMB 7.759 billion, aligning closely with CICC's expectation of RMB 7.807 billion, while the Non-IFRS net profit was RMB 2.860 billion, also in line with expectations [2] - Online music revenue for 2025 was RMB 5.994 billion, reflecting a 12% year-on-year increase, with subscription revenue growing by 13.3% and non-subscription revenue by 5.2% [2] - The company aims to expand its paid user base in 2026, with expectations for online music revenue to grow by 10.8% year-on-year, and subscription revenue to increase by 12.1% [2] Cost Management and Profitability - The gross margin for 2025 improved to 35.7%, an increase of 2 percentage points year-on-year [2] - Sales, management, and R&D expenses decreased year-on-year, indicating a disciplined approach to spending [2] - CICC forecasts a 20% increase in operating profit for 2026, projecting it to reach RMB 1.95 billion [2] Industry Dynamics - The industry is experiencing concerns regarding stability, but NetEase Cloud Music's user base remains relatively stable compared to competitors [3] - The company has launched its self-developed AI recommendation model, Climber, and is focusing on user experience and innovation [3] - CICC emphasizes the importance of monitoring competitors' strategies in copyright and user acquisition [3]
中金：维持网易云音乐(09899) 跑赢行业评级 目标价224港元