Jinwu Financial News | According to Dongxing Securities Research, Cloud Music (09899) released the 2023 results announcement, and the company achieved operating revenue of 7.87 billion yuan, a year-on-year decrease of 12.5%. Among them: (1) Revenue from online music services was 4.35 billion yuan, an increase of 17.6% over the previous year, mainly due to a sharp increase in membership subscription revenue. Among them, membership revenue was 3.65 billion yuan, up 20.2% year on year; the number of monthly paid online music service users was 44.12 million, up 15.3% year on year. (2) Revenue from social entertainment services and other services was 3.52 billion yuan, a year-on-year decrease of 33.6%, mainly due to the company strengthening the monetization management of live streaming agency communication volume. The bank believes that the number of domestic music users is huge, and there is plenty of room to increase the number of company member subscribers. Net profit of 730 million yuan, loss of 220 million yuan in 2022, turned loss into profit; adjusted net profit of 820 million yuan, loss of 110 million yuan in 2022.
According to the bank, in 2023, the platform had 206 million monthly active users, an increase of 8.7% over the previous year; the ratio of daily active users/monthly active users remained above 30%; the platform's user base was highly sticky and active, showing the dynamic community nature of the cloud music platform. The company's annual membership revenue was 3.65 billion yuan, an increase of 20.2% over the previous year, achieving copyright cost coverage. As can be seen, the company's music membership business is profitable.
The bank is optimistic that NetEase Cloud Music will develop into a vibrant music community for young people with a large number of users. The bank expects the company's net profit for 2024-2026 to be 1.05 billion yuan, 1.47 billion yuan, and 1.99 billion yuan respectively. The corresponding PE is 17X, 12X, and 9X, respectively, maintaining a “highly recommended” rating.