Investment Rating - The report maintains a "Strong Buy" rating for Cloud Music [1][2][3] Core Views - The company reported a revenue of 7.87 billion HKD in 2023, a decrease of 12.5% year-on-year, but achieved a net profit of 730 million HKD, recovering from a loss of 220 million HKD in 2022 [1][2] - The online music service revenue increased by 17.6% year-on-year to 4.35 billion HKD, driven by a significant rise in subscription revenue [2] - The company has optimized music copyright costs, with a 30.5% year-on-year decrease in copyright amortization costs, leading to profitability in its membership business [2][3] Summary by Sections Financial Performance - In 2023, the company achieved a revenue of 7.87 billion HKD, down 12.5% from 2022, while net profit reached 730 million HKD, a turnaround from a loss of 220 million HKD in 2022 [1][2] - Adjusted net profit for 2023 was 820 million HKD, compared to a loss of 110 million HKD in 2022 [1] Revenue Breakdown - Online music service revenue was 4.35 billion HKD, up 17.6% year-on-year, with subscription revenue contributing 3.65 billion HKD, a 20.2% increase [2] - Social entertainment services and other revenues were 3.52 billion HKD, down 33.6% year-on-year due to improved management of live streaming and social traffic monetization [2] Cost Management - The company's operating costs were 5.76 billion HKD, a decrease of 25.1% year-on-year, resulting in a gross margin of 26.7%, up 12.3 percentage points [2] - The company has focused on cost optimization, leading to improved operational efficiency and profitability for 2024 [2][3] User Engagement - The platform had 206 million monthly active users in 2023, an increase of 8.7% year-on-year, with a strong user engagement reflected in a daily active user to monthly active user ratio of over 30% [3] - The company plans to enhance product innovation in 2024, particularly leveraging advancements in AI technology to improve user experience [3] Profit Forecast - The report forecasts net profits of 1.05 billion HKD, 1.47 billion HKD, and 1.99 billion HKD for 2024, 2025, and 2026 respectively, with corresponding PE ratios of 17X, 12X, and 9X [3][5]
2023年业绩公告点评：音乐版权成本显著优化，平台社区属性突出