Investment Rating - The report maintains a "Buy" rating for the company with a target price of 151.86 HKD [5][3] Core Insights - In H1 2024, the company's revenue reached 4.07 billion (yoy +4.1%, hoh +3%), primarily driven by growth in paid membership subscriptions. H2 2024 revenue is expected to be around 4 billion (yoy +1%) due to adjustments in the homepage traffic weight for live streaming [2] - The gross margin for H1 2024 was 35% (yoy +10pp, hoh +6pp), attributed to business scale expansion and strong commercialization of core online music services, along with a one-time adjustment in copyright costs [2] - The net profit attributable to the parent company for H1 2024 was 810 million (yoy +176%, hoh +84%), with expectations for continued improvement in profitability as membership revenue increases [2] - Online music revenue in H1 2024 was 2.6 billion (yoy +27%, hoh +10%), driven by an increase in monthly paying users and enhanced partnerships with music copyright holders. H2 2024 online music revenue is projected to reach 2.75 billion (yoy +18%) [2] - Social entertainment revenue in H1 2024 was 1.5 billion (yoy -20%, hoh -7%), reflecting a more cautious operational strategy by management. H2 2024 social entertainment revenue is expected to decline to 1.24 billion (yoy -24%) [2] - The company was included in the Hang Seng Composite Index, effective September 9, 2024, which may lead to its inclusion in the Hong Kong Stock Connect investment scope [2] Financial Forecasts - The forecasted net profits for the company are 1.5 billion, 1.77 billion, and 2.02 billion for the years 2024, 2025, and 2026 respectively. The estimates for 2024 and 2025 were adjusted upwards due to better-than-expected H1 2024 performance [3] - The average P/E ratio for comparable companies in 2025 is estimated at 17 times, supporting the target price of 151.86 HKD [3] Key Financial Metrics - The company's revenue for 2024 is projected at 8.054 billion, with a growth rate of 2.4% [4] - The gross margin is expected to improve to 33.9% in 2024, with net profit margins projected at 18.7% [4] - The company’s P/E ratio is forecasted to be 12.6 in 2024, indicating a potential undervaluation compared to peers [4]
云音乐：24H1点评：在线音乐收入增长超预期