Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The company has shown significant improvement in profitability, with a 165.4% year-over-year increase in adjusted net profit for H1 2024, driven by substantial growth in subscription revenue from online music services [3][5]. - The company has successfully increased its paid user base, leading to a 26.6% year-over-year growth in online music revenue, with subscription sales accounting for 83.8% of this revenue [4][5]. - The company has adopted a cautious approach to its social entertainment business, resulting in a 19.9% year-over-year decline in revenue from this segment, focusing instead on enhancing the core music user experience [5]. Financial Performance Summary - For H1 2024, the company reported revenues of 4.07 billion RMB, a 4.1% increase year-over-year, with operating costs decreasing by 10.14% to 2.65 billion RMB [3]. - The adjusted net profit for H1 2024 reached 0.88 billion RMB, reflecting a significant improvement in profitability metrics [3]. - The gross margin improved to 35.0%, up 10.3 percentage points year-over-year, attributed to a reduction in content service costs [3]. User Growth and Market Position - The company has maintained a daily active user (DAU) to monthly active user (MAU) ratio above 30%, indicating strong user engagement [4]. - As of H1 2024, the platform has over 732,000 registered independent musicians, contributing to a diverse music library of approximately 3.6 million tracks [4]. Revenue Forecast and Valuation - Revenue projections for 2024-2026 are estimated at 8.29 billion RMB, 8.89 billion RMB, and 9.43 billion RMB, respectively, with adjusted net profits expected to reach 1.30 billion RMB, 1.48 billion RMB, and 1.66 billion RMB [6][7]. - The report anticipates a gradual release of operating leverage, enhancing profitability over the long term [5].
云音乐：公司动态研究：已加入港股通，经营杠杆持续释放