Core Insights - The music-streaming company is collaborating with three major music labels to create AI products aimed at assisting artists [1] Group 1 - The partnership is a response to ongoing challenges related to scams and fraud in the music industry [1]

Group 1: Strategic Collaboration - KUKE Music and People's Music Publishing House have engaged in discussions to enhance global music collaboration and promote young Chinese musicians, resulting in multiple strategic agreements [1][2][4] - The partnership aims to build a digital music ecosystem by collaborating with platforms like Huawei Music and CMG Cloud Listening, focusing on integrated music data solutions and intelligent distribution models [3][4] Group 2: Young Musicians Support Program - The "Young Chinese Musicians Support Program" has been launched to provide comprehensive support for emerging artists, including album production, global distribution, and performance opportunities [2] - The initiative aims to identify promising talents and advance the heritage and innovation of Chinese music culture [2] Group 3: Future Vision and Industry Advancement - Both parties plan to hold regular progress meetings to implement cooperation details and deepen collaboration in areas such as music education and AI-driven copyright management [4] - The collaboration is expected to unlock new market opportunities and deliver premium Chinese music to global audiences [4] Group 4: Company Background - KUKE Music is recognized as China's premier classical music service platform, with extensive classical content licenses and a commitment to building a music ecosystem through copyright operations and digital distribution [5] - People's Music Publishing House, established in 1954, is the largest national professional music publishing authority in China, focusing on music publication and cultural exchange [6]

Financial Data and Key Metrics Changes - In Q4 2024, total revenues reached RMB7.5 billion, an 8% year-over-year increase, with online music revenues growing by 16% to RMB5.8 billion [32][34] - Average net profit increased by 47% year-over-year to RMB2.1 billion, marking the highest quarterly profit in the company's history [32][40] - Non-IFRS net profit rose by 43% year-over-year to RMB2.4 billion [40] - Gross margin for Q4 reached 43.6%, up by 5.3 percentage points year-over-year [36][58] Business Line Data and Key Metrics Changes - Music subscription revenues in Q4 2024 reached RMB4 billion, representing an 18% increase year-over-year [33] - The number of online music paying users was 121 million, a 13% increase year-over-year [34] - Advertising revenues achieved strong year-over-year growth, primarily due to the growth in ad-supported model revenues [34] Market Data and Key Metrics Changes - The music and audio library exceeded 260 million licensed and co-created tracks by the end of 2024, up from 200 million at the end of the previous year [8] - The company has renewed strategic contracts with international labels, expanding its coverage of high-quality music content [9] Company Strategy and Development Direction - The company is focused on a dual-engine strategy combining rich content and platform innovation to capture emerging opportunities [7] - Plans to continue diversifying offerings across the music value chain and investing in original content production and innovative technologies [47][48] - The company aims to enhance user experiences through AI technologies and innovative features [30][90] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth prospects, supported by a strong performance in online music services and profit margin expansion [5][7] - The company anticipates healthy growth in online music driven by an increase in paying users and ARPPU [57] - Management noted that the willingness of users to spend on live music events has surged, indicating a positive cycle for music content consumption [80] Other Important Information - The company announced an annual dividend of $273 million and a new share repurchase program of up to $1 billion [7][42] - The commitment to ESG excellence is emphasized, with significant strides made in supporting female musicians [15][16] Q&A Session Summary Question: Guidance on 2025 growth outlook, especially for music subscription revenue - Management highlighted strong performance in 2024 and expressed optimism for continued growth in 2025, focusing on user experience and service innovation [50][56] Question: Balance between subscriber and ARPU growth - Management confirmed confidence in revenue and profit growth for 2025, with expectations for continued growth in both subscriber numbers and ARPPU [67][70] Question: Changes in consumer sentiment towards discretionary spending - Management observed a shift towards live music experiences, with increased willingness to spend on concerts and merchandise [78][80] Question: Strategy around AI for 2025 - Management plans to leverage AI technologies to enhance user experience and engagement, with ongoing investments in AI capabilities [84][90] Question: Sequential revenue growth for social entertainment - Management noted a key growth driver from new interactive features and a stabilized user base, with expectations for continued growth momentum [93][100] Question: Capital allocation and shareholder returns - Management emphasized a balanced approach to capital allocation, focusing on sustainable growth opportunities while returning value to shareholders through dividends and share repurchase programs [103][106]

Financial Data and Key Metrics Changes - In Q4 2024, total revenues reached RMB 7.5 billion, an 8% year-over-year increase [21] - Online music revenues increased by 16% year-over-year to RMB 5.8 billion, driven by strong growth in music subscription revenues [22] - Net profit increased by 47% year-over-year to RMB 2.1 billion, marking the highest quarterly profit in the company's history [21][26] - Non-IFRS net profit rose by 43% year-over-year to RMB 2.4 billion [27] Business Line Data and Key Metrics Changes - Music subscription revenues in Q4 2024 reached RMB 4 billion, representing an 18% increase year-over-year [22] - The number of online music paying users was 121 million, a 13% increase year-over-year [23] - Advertising revenues achieved strong year-over-year growth, primarily due to the growth in ad-supported model revenues [23] Market Data and Key Metrics Changes - Social entertainment services and other revenues were RMB 1.6 billion, down by 13% year-over-year [24] - The gross margin for Q4 reached 43.6%, an increase of 5.3 percentage points year-over-year [24] Company Strategy and Development Direction - The company is focused on strengthening its business presence across the music value chain and enhancing user experiences through continuous product and service innovation [40] - The dual engine strategy combines rich content and platform innovation to capture emerging opportunities [4] - The company plans to invest in original content production, high-quality content, and innovative technologies globally [32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth prospects, expecting healthy growth in online music driven by an increase in paying users and ARPPU [40] - The company aims to explore new business opportunities in content ecosystems, IoT, long-form audio, and international markets [41] - Management noted that the music live shows business in China is expected to continue strong performance, with stable market size and ticket prices [57] Other Important Information - The company announced an annual dividend of $273 million and a new share repurchase program of up to $1 billion [4] - The total revenues for the full year 2024 were RMB 28.4 billion, up by 2% year-over-year [29] Q&A Session Summary Question: Guidance on 2025 growth outlook - Management highlighted strong performance in 2024 and expressed optimism for 2025, focusing on user experience and continuous innovation [40][41] Question: Balance between subscriber and ARPU growth - Management indicated confidence in maintaining growth in both subscriber numbers and ARPU, while being cautious of price sensitivity [51][52] Question: Changes in consumer sentiment towards discretionary spending - Management observed a growing demand for live concerts and music festivals, indicating a positive cycle for music content consumption [56] Question: Strategy around AI in 2025 - Management plans to leverage AI technologies to enhance user experience and improve sound quality, while managing costs effectively [60][62] Question: Sequential revenue growth for social entertainment - Management noted that new interactive features and compliance improvements contributed to recent growth in social entertainment revenue [66][70]