Kuke Music(US:KUKE)2022-03-16 16:07Financial Data and Key Metrics Changes - The company reported full year revenues of RMB302 million, an increase of 85.4% year-over-year [6][24] - Q4 revenue decreased by 3.2% to RMB123.8 million from RMB128 million in the previous year [18] - Gross profit for Q4 was RMB66.8 million, down from RMB102 million in the previous year, with a gross margin of 53.9% compared to 79.7% [19][24] - For the full year, gross profit was RMB172.8 million, with a gross margin of 57.2%, down from 72.8% in 2020 [24] Business Line Data and Key Metrics Changes - The Smart Music Learning Solutions segment contributed over 50% of total revenue in Q4 and 40% for the fiscal year 2021 [7] - Licensing revenue reached an all-time high of RMB88.2 million, representing a year-over-year growth of 52% [12] - Revenue from Smart Music Learning Solutions increased by 15.8% to RMB63.2 million in Q4 [14] - Live Music Events segment revenue in Q4 reached RMB39.3 million, a year-over-year increase of 45.1% [16] Market Data and Key Metrics Changes - The number of institutional subscribers increased by 16 to 802 across China [12] - Active students in private kindergartens totaled 32,424 during Q4, representing a year-over-year increase of 39.4% [14] - The company added nearly 1,000 pieces of content to its library, bringing the total to over 2.8 million tracks [10] Company Strategy and Development Direction - The company is focusing on expanding its Smart Music Learning Solutions by collaborating with public kindergartens and schools [7][15] - Investment in the NFT platform KOLO is part of the strategy to enhance monetization capabilities [8] - The company aims to leverage its classical music content to drive innovation and growth in the classical music industry [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growing demand for smart music education from public schools [7] - The company anticipates steady growth in its core business segments, particularly in licensing and Smart Music Learning Solutions [30] - Management highlighted the importance of establishing collaborations with public schools to expand the customer base [15][37] Other Important Information - The company reported a net loss of RMB56.1 million for the full year 2021, compared to a net loss of RMB15.2 million in 2020 [24] - Operating expenses for 2021 were RMB228.4 million, up from RMB126.1 million in 2020 [24] Q&A Session Summary Question: Can you provide insights on the gross profit margin outlook? - Management noted that the decrease in gross margin was due to strategic adjustments and changes in profit-sharing policies, but they remain confident in future margins due to expected growth in licensing and subscription businesses [27][28] Question: How should we view Kuke's overall profitability in the future? - Management expressed optimism about overall profitability, citing steady growth in core business segments and the potential of new technology-based ventures [29][30] Question: Can you elaborate on the classical music licensing business revenue growth? - Licensing revenue reached RMB88.2 million, driven by deeper market penetration and increased brand awareness [33] Question: What are the main reasons behind the significant revenue growth in all business segments? - Management highlighted substantial increases in Smart Music Learning Solutions and licensing revenues, attributing growth to expanded customer portfolios and collaborations [35][36]