Investment Rating - The report assigns a "Buy" rating to the company, indicating an expectation of total returns exceeding the relevant industry over the next 12 months [3][12]. Core Insights - The report highlights an optimistic outlook for the company's profitability, with an upward revision of the target price to HKD 240, reflecting a potential upside of 15.5% from the current price of HKD 207.80 [2][12]. - The adjusted net profit forecasts for 2025 and 2026 have been increased by 6% and 9% respectively, reaching RMB 19.3 billion and RMB 22.0 billion [2][8]. - The report emphasizes the strong growth potential in membership revenue, driven by the company's paid subscription model and ARPPU (Average Revenue Per Paying User) [2][7]. Financial Performance Summary - The company reported a revenue of RMB 18.6 billion for Q1 2025, a year-on-year decline of 8%, primarily due to a decrease in social entertainment revenue [7]. - Gross margin improved to 36.7%, up 3.7 percentage points year-on-year, benefiting from increased subscription revenue and optimized revenue sharing from live streaming [7]. - For 2025, the company expects online music revenue to grow by 15%, with subscription revenue projected to increase by 16% [7]. - The financial forecasts for 2025 include total revenue of RMB 7,970 million, with a gross profit of RMB 2,967 million and a gross margin of 37.2% [8][13]. - The adjusted operating profit is forecasted to be RMB 1,607 million for 2025, reflecting a 9% increase from previous estimates [6][13]. Valuation Metrics - The report utilizes a Sum-of-the-Parts (SOTP) valuation method, attributing HKD 223 to core business contributions based on a 20x average P/E ratio and HKD 17 to cash contributions at a 30% discount [2][12]. - The company's market capitalization is reported at approximately HKD 43.67 billion, with a 52-week high of HKD 217.60 and a low of HKD 89.75 [5][12].
网易云音乐（09899）：1季度毛利率优化超预期，看好盈利能力释放，上调目标价