Guoxin Securities·2025-05-20 11:05Investment Rating - The investment rating for the company is "Outperform the Market" [5][3][26] Core Views - The company has demonstrated a solid leadership position, with subscription business growth driven by an increase in ARPPU (Average Revenue Per Paying User) [3][26] - The company achieved a total revenue of 7.36 billion yuan in Q1 2025, representing a year-on-year growth of 8.7% [9][3] - The adjusted net profit for Q1 2025 was 2.23 billion yuan, reflecting a year-on-year increase of 22.8% [9][3] Revenue and Profitability - Online music revenue accounted for 79% of total revenue, with a gross margin of 44.1%, up 3.1 percentage points year-on-year [9][3] - The subscription business revenue reached 4.22 billion yuan in Q1 2025, growing 17% year-on-year [2][3] - The company expects the gross margin to continue improving, potentially reaching 45% in 2025 [9][3] User Metrics - The online music mobile MAU (Monthly Active Users) was 555 million, down 4% year-on-year, while the number of paying users increased to 123 million, up 8.3% year-on-year [25][2] - The subscription user base is projected to grow by 6 million in 2025, with an expected increase in ARPPU of 1.2 yuan [3][26] Financial Forecasts - The company forecasts adjusted net profits of 8.9 billion yuan, 10.2 billion yuan, and 11.6 billion yuan for 2025, 2026, and 2027 respectively [4][3] - Revenue projections for 2025 are set at 29.07 billion yuan, with a growth rate of 2.3% [4][3]