Orient Securities expects the net profit of Cloud Music (09899) to be 734/10.36/1,521 million yuan in 2023-25, respectively.
The Zhitong Finance App learned that Orient Securities released a research report stating that maintaining the “buy” rating of Cloud Music (09899), the net profit for 23-25 is expected to be $7.34/10.36/1,521 billion yuan, respectively, with an original value of 5.85/8.82/1,191 billion. Since the results announcement for fiscal year 23 exceeded expectations, adjusted the music payment revenue and gross margin assumptions, and raised the profit forecast. The target price was HK$133.85. The company's PGC copyright shortfall and UGC content drive MAU expansion. The development of users' payment mentality has also increased the payment rate and increased online music revenue.
According to the report, Cloud Music 23H2's revenue was 3.96 billion (yoy -16%, hoh +1%), mainly due to business strategy adjustments and internal control of the live streaming business. The bank expects 24H1 to reach 3.6 billion, mainly due to traffic weight adjustments on the live streaming business homepage. 23H2's gross profit margin of 28.7% (yoy+13pp, hoh+4pp) is mainly due to increased gross margin due to increased membership revenue and diluted copyright costs. The bank expects this trend to continue. 23H2's net profit (IFRS) is 440 million (yoy +793%, hoh +50%), and the bank expects profitability to continue to be optimized as member revenue increases.