20260213-招银国际-网易云音乐-09899.HK-2H25_revenue_miss_on_soft_non-subscription_business_intact_FY26_earnings_growth_outlook_5页_786kb

> **来源：[研报客](https://pc.yanbaoke.cn)** # NetEase Cloud Music (9899 HK) # 2H25 revenue miss on soft non-subscription business; intact FY26 earnings growth outlook NetEase Cloud Music announced FY25 financial results: total revenue declined by $2\%$ YoY to RMB7.76bn, slightly below Bloomberg consensus estimate of RMB7.91bn. Adjusted net profit was up by $68\%$ YoY to RMB2.86bn, in line with consensus estimate. Excluding the impact of deferred income tax credit, adjusted operating profit grew by $32\%$ YoY to RMB1.73bn. Share price declined by over $9\%$ post results on 12 Feb owing to the two concerns of investors: 1) online music revenue growth decelerated to $+8\%$ YoY in 2H25 (1H25: $+16\%$ YoY); 2) overall GPM declined by 1.4ppts in 2H25 vs 1H25. Nonetheless, we note that the deceleration and GPM contraction in 2H25 was mainly due to the YoY decline in revenue from higher-margin non-subscription business, while music subscription business remained solid in 2H25. We slightly lower FY26 total revenue forecast by $1\%$ in view of the relatively soft non-subscription businesses. We trim our target price to HK $245.0 based on 23x FY26E non-GAAP PE (previous: HK$ 330.0 on 32x FY26E PE) due to the decline in sector valuation. The company now offers attractive risk-reward on current valuation (15x FY26E PE), supported by solid OP growth outlook in FY26E. Maintain BUY. Non-subscription businesses dragged online music revenue growth. Online music services revenue grew by $8\%$ YoY to RMB3.0bn in 2H25 (1H25: +16% YoY). Revenue from membership subscription was up by $12\%$ YoY to RMB2.6bn in 2H25 (1H25: +15% YoY), primarily driven by growth in subscriber base, but partially offset by the decline in monthly ARPPU. Non-subscription music revenue declined by $7\%$ YoY in 2H25, mainly due to the decline in revenue from digital album sales. Social entertainment and others revenue fell by $17\%$ YoY to RMB905mn in 2H25, as the company focuses more on the core music business. That said, social entertainment revenue stabilised and grew by $5\%$ HoH in 2H25. - Margin expansion on operating leverage and expense control. Overall GPM increased by 2.7ppts YoY but declined by 1.4ppts HoH to $35.0\%$ in 2H25. The HoH margin decline was mainly due to the drop in revenue from higher-margin non-subscription business. Overall adjusted operating margin improved by 4.6ppts YoY to $21.1\%$ in 2H25, thanks to the operating leverage and effective control in opex. Operating income to sustain solid growth in FY26E. Looking into FY26E, we forecast total revenue to increase by $8\%$ YoY to RMB8.4bn, mainly driven by the solid growth of online music business. We expect music subscription revenue to rise by $13\%$ YoY to RMB5.7bn in FY26E, supported by the increase in both subscriber base and ARPPU. Underpinned by solid music revenue growth and efficiency enhancement, we model FY26E adjusted operating profit to grow by $19\%$ YoY, with OPM up by 2ppts YoY. Earnings Summary (YE 31 Dec) FY24A FY25A FY26E FY27E FY28E Revenue (RMB mn) 7,950 7,759 8,419 8,927 9,350 YoY growth (%) 1.1 (2.4) 8.5 6.0 4.7 Gross margin (%) 33.7 35.7 37.0 37.7 38.4 Operating profit (RMB mn) 1,170.8 1,622.0 1,924.6 2,122.0 2,296.7 Adjusted net profit (RMB mn) 1,700.1 2,857.6 2,135.5 2,307.0 2,441.2 YoY growth (%) 107.7 68.1 (25.3) 8.0 5.8 EPS (Adjusted) (RMB) 8.14 13.54 10.12 10.93 11.57 P/S (x) 3.9 4.0 3.7 3.5 3.3 P/E (x) 19.5 11.2 15.4 14.2 13.3 Source: Company data, Bloomberg, CMBIG estimates # BUY (Maintain) Target Price HK$245.00 (Previous TP HK$330.00) Up/Downside 48.1% Current Price HK$165.40 # China Internet Saiyi HE, CFA (852) 3916 1739 hesaiyi@cmbi.com.hk Wentao LU, CFA luwentao@cmbi.com.hk Ye TAO, CFA (852) 3850 5226 franktao@cmbi.com.hk Stock Data Mkt Cap (HK$ mn) 34,904.3 Avg 3 mths t/o (HK$ mn) 137.8 52w High/Low (HK$) 302.40/130.70 Total Issued Shares (mn) 211.0 Source:FactSet Shareholding Structure NetEase 59.4% Source: Company data Share Performance 12-mth Price Performance Absolute Relative 1-mth -14.4% -15.8% 3-mth -19.3% -19.6% 6-mth -36.4% -41.2% Source:FactSet Source:FactSet Figure 1: Cloud Music: forecast revision RMB mn Current Previous Change (%) FY26E FY27E FY28E FY26E FY27E FY28E FY26E FY27E FY28E Revenue 8,419 8,927 9,350 8,509 8,876 NA -1.1% 0.6% NA Gross profit 3,117 3,369 3,586 3,258 3,472 NA -4.3% -2.9% NA Operating profit 1,925 2,122 2,297 1,911 2,099 NA 0.7% 1.1% NA Adjusted net profit 2,138 2,309 2,441 2,145 2,319 NA -0.4% -0.4% NA Adjusted EPS (RMB) 10.1 10.9 11.6 10.2 11.0 NA -0.6% -0.7% NA Gross margin 37.0% 37.7% 38.4% 38.3% 39.1% NA -1.3 ppt -1.4 ppt NA Operating margin 22.9% 23.8% 24.6% 22.5% 23.6% NA 0.4 ppt 0.1 ppt NA Adjusted net margin 25.4% 25.9% 26.1% 25.2% 26.1% NA 0.2 ppt -0.3 ppt NA Source: CMBIGM estimates Figure 2: CMBIGM estimates vs consensus RMB mn CMBIGM Consensus Diff (%) FY26E FY27E FY28E FY26E FY27E FY28E FY26E FY27E FY28E Revenue 8,419 8,927 9,350 8,697 9,548 9,929 -3.2% -6.5% -5.8% Gross profit 3,117 3,369 3,586 3,304 3,776 4,026 -5.7% -10.8% -10.9% Adjusted net profit 2,138 2,309 2,441 2,256 2,611 2,720 -5.2% -11.5% -10.2% Adjusted EPS (RMB) 10.1 10.9 11.6 10.5 12.3 13.1 -3.3% -11.1% -11.8% Gross margin 37.0% 37.7% 38.4% 38.0% 39.5% 40.5% -1.0 ppt -1.8 ppt -2.2 ppt Adjusted net margin 22.9% 23.8% 24.6% 14.6% 20.9% 24.4% 8.3 ppt 2.8 ppt 0.2 ppt Source: Company data, CMBIGM estimates # Valuation We value NetEase Cloud Music at HK$245.0 per share based on 23x 2026E P/E. Our target PE multiple is on par with the global peers. Figure 3: NetEase Cloud Music: target valuation P/E valuation 2026E 2026E Adjusted EPS (RMB) 9.5 Target 2026E PE 23.0 Target price (RMB) 218.3 Target price (HK$) 245.0 Source: Company data, CMBIGM estimates Figure 4: Global music and video subscription platforms Companies Ticker Price (LC) PE(x) PS (x) EPS CAGR 25-27E 2026E 2027E 2026E 2027E Netflix NFLX US 79.6 25.3 20.9 6.6 5.9 22% Spotify SPOT US 487.2 32.8 25.6 4.3 3.8 50% TME TME US 16.9 16.8 14.5 4.9 4.4 13% iQiyi IQ US 1.9 17.9 9.2 0.5 0.4 NA Average 23.2 17.6 4.1 3.6 Source: Bloomberg, CMBIGM Note: data as of 11 Feb Financial Summary INCOME STATEMENT 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Revenue 7,867 7,950 7,759 8,419 8,927 9,350 Cost of goods sold 5,764 5,269 4,990 5,302 5,557 5,764 Gross profit 2,103 2,682 2,770 3,117 3,369 3,586 Operating expenses 1,772 1,511 1,148 1,192 1,247 1,289 Selling expense 758 612 409 413 433 449 Admin expense 165 185 177 182 187 192 R&D expense 869 780 762 775 797 809 Others (20) (65) (199) (177) (170) (161) Operating profit 330 1,171 1,622 1,925 2,122 2,297 Investment gain/loss (0) (7) 0 0 0 0 Other gains/(losses) 0 0 0 0 0 0 Interest income 438 406 446 429 435 443 Interest expense (0) (0) (0) 0 0 0 Pre-tax profit 768 1,570 2,068 2,354 2,557 2,740 Income tax (33) (5) 678 (353) (383) (411) After tax profit 734 1,565 2,746 2,001 2,173 2,329 Net profit 734 1,565 2,746 2,001 2,173 2,329 Adjusted net profit 819 1,700 2,858 2,136 2,307 2,441 BALANCE SHEET 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Current assets 11,323 11,952 14,074 16,183 18,501 20,912 Cash & equivalents 4,020 3,795 3,118 4,716 6,516 8,348 Account receivables 923 1,055 1,068 1,101 1,109 1,162 Prepayment 775 640 802 827 862 888 ST bank deposits 5,485 6,421 9,057 9,510 9,986 10,485 Financial assets at FVTPL 0 7 0 0 0 0 Other current assets 98 33 28 28 28 28 Non-current assets 287 1,630 2,387 2,468 2,547 2,632 PP&E 33 20 20 28 32 35 Right-of-use assets 6 6 6 6 6 6 Investment in JVs & assoc 79 72 52 52 52 52 Other non-current assets 169 1,531 2,310 2,383 2,457 2,540 Total assets 11,611 13,582 16,461 18,651 21,049 23,544 Current liabilities 3,100 3,312 3,486 3,532 3,616 3,664 Account payables 0 24 56 60 62 65 Tax payable 4 1 63 (33) (36) (38) Other current liabilities 76 74 38 38 38 38 Lease liabilities 3 2 2 2 2 2 Contract liabilities 1,001 1,235 1,406 1,526 1,618 1,694 Accrued expenses 2,015 1,976 1,921 1,939 1,930 1,902 Non-current liabilities 70 89 106 115 121 127 Convertible bonds 0 0 0 0 0 0 Other non-current liabilities 70 89 106 115 121 127 Total liabilities 3,170 3,401 3,592 3,646 3,737 3,791 Share capital 0 0 0 0 0 0 Retained earnings (10,091) (8,531) (5,784) (3,783) (1,610) 719 Other reserves 18,532 18,708 18,653 18,788 18,922 19,034 Total shareholders equity 8,441 10,178 12,869 15,005 17,312 19,753 Total equity and liabilities 11,611 13,578 16,461 18,651 21,049 23,544 CASH FLOW 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec (RMB mn) Operating Profit before taxation 768 1,570 2,068 2,354 2,557 2,740 Depreciation & amortization 19 17 15 6 8 10 Tax paid (35) (8) 740 (449) (386) (414) Change in working capital (264) 488 (73) 89 49 (27) Others (300) (292) (334) (295) (301) (331) Net cash from operations 189 1,775 2,416 1,706 1,927 1,978 Investing Capital expenditure (6) (4) (14) (14) (13) (12) Acquisition of subsidiaries/ investments (7,248) (25,914) (3,545) (453) (476) (499) Net proceeds from disposal of short-term investments 8,061 23,701 0 0 0 0 Others 419 278 467 359 361 366 Net cash from investing 1,227 (1,939) (3,093) (107) (128) (146) Financing Proceeds from share issues 0 0 0 0 0 0 Share repurchases 0 0 0 0 0 0 Others (308) (62) (0) 0 0 0 Net cash from financing (308) (62) (0) 0 0 0 Net change in cash Cash at the beginning of the year 2,917 4,020 3,795 3,118 4,716 6,516 Exchange difference (5) 1 0 0 0 0 Cash at the end of the year 4,020 3,795 3,118 4,716 6,516 8,348 GROWTH 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Revenue (12.5%) 1.1% (2.4%) 8.5% 6.0% 4.7% Gross profit 62.6% 27.5% 3.3% 12.5% 8.1% 6.4% Operating profit na 254.6% 38.5% 18.7% 10.3% 8.2% Net profit na 113.2% 75.4% (27.1%) 8.6% 7.2% Adj. net profit na 107.7% 68.1% (25.3%) 8.0% 5.8% PROFITABILITY 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Gross profit margin 26.7% 33.7% 35.7% 37.0% 37.7% 38.4% Operating margin 4.2% 14.7% 20.9% 22.9% 23.8% 24.6% Adj. net profit margin 10.4% 21.4% 36.8% 25.4% 25.8% 26.1% Return on equity (ROE) 9.0% 16.8% 23.8% 14.4% 13.4% 12.6% GEARING/LIQUIDITY/ACTIVITIES 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec Net debt to equity (x) (1.1) (1.0) (0.9) (0.9) (1.0) (1.0) Current ratio (x) 3.7 3.6 4.0 4.6 5.1 5.7 Receivable turnover days 42.8 48.4 50.2 47.7 45.3 45.3 VALUATION 2023A 2024A 2025A 2026E 2027E 2028E YE 31 Dec P/E 41.9 19.5 11.2 15.4 14.2 13.3 P/E (diluted) 41.9 19.5 11.2 15.4 14.2 13.3 P/B 3.6 3.0 2.4 2.1 1.8 1.6 Source: Company data, CMBIGM estimates. Note: The calculation of net cash includes financial assets. # Disclosures & Disclaimers # Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report. Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) will deal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3) serve as an officer of any of the Hong Kong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. # CMBIG Ratings BUY HOLD : Stock with potential return of over 15% over next 12 months : Stock with potential return of +15% to -10% over next 12 months SELL : Stock with potential loss of over 10% over next 12 months NOT RATED : Stock is not rated by CMBIGM OUTPERFORM : Industry expected to outperform the relevant broad market benchmark over next 12 months MARKET-PERFORM : Industry expected to perform in-line with the relevant broad market benchmark over next 12 months UNDERPERFORM : Industry expected to underperform the relevant broad market benchmark over next 12 months # CMB International Global Markets Limited Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800 CMB International Global Markets Limited ("CMBIGM") is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly owned subsidiary of China Merchants Bank) # Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable for the purposes of all investors. CMBIGM does not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial position or special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in the report. The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on the performance of underlying assets or other variable market factors. CMBIGM recommends that investors should independently evaluate particular investments and strategies, and encourages investors to consult with a professional financial advisor in order to make their own investment decisions. This report or any information contained herein, have been prepared by the CMBIGM, solely for the purpose of supplying information to the clients of CMBIGM or its affiliate(s) to whom it is distributed. This report is not and should not be construed as an offer or solicitation to buy or sell any security or any interest in securities or enter into any transaction. Neither CMBIGM nor any of its affiliates, shareholders, agents, consultants, directors, officers or employees shall be liable for any loss, damage or expense whatsoever, whether direct or consequential, incurred in relying on the information contained in this report. Anyone making use of the information contained in this report does so entirely at their own risk. The information and contents contained in this report are based on the analyses and interpretations of information believed to be publicly available and reliable. CMBIGM has exerted every effort in its capacity to ensure, but not to guarantee, their accuracy, completeness, timeliness or correctness. CMBIGM provides the information, advices and forecasts on an "AS IS" basis. The information and contents are subject to change without notice. CMBIGM may issue other publications having information and/ or conclusions different from this report. These publications reflect different assumptions, point-of-view and analytical methods when compiling. CMBIGM may make investment decisions or take proprietary positions that are inconsistent with the recommendations or views in this report. CMBIGM may have a position, make markets or act as principal or engage in transactions in securities of companies referred to in this report for itself and/or on behalf of its clients from time to time. Investors should assume that CMBIGM does or seeks to have investment banking or other business relationships with the companies in this report. As a result, recipients should be aware that CMBIGM may have a conflict of interest that could affect the objectivity of this report and CMBIGM will not assume any responsibility in respect thereof. This report is for the use of intended recipients only and this publication, may not be reproduced, reprinted, sold, redistributed or published in whole or in part for any purpose without prior written consent of CMBIGM. Additional information on recommended securities is available upon request. # For recipients of this document in the United Kingdom This report has been provided only to persons (I)falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended from time to time)(The Order") or (II) are persons falling within Article 49(2) (a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc.) of the Order, and may not be provided to any other person without the prior written consent of CMBIGM. # For recipients of this document in the United States CMBIGM is not a registered broker-dealer in the United States. As a result, CMBIGM is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. The research analyst who is primary responsible for the content of this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority ("FINRA"). The analyst is not subject to applicable restrictions under FINRA Rules intended to ensure that the analyst is not affected by potential conflicts of interest that could bear upon the reliability of the research report. This report is intended for distribution in the United States solely to "major US institutional investors", as defined in Rule 15a-6 under the US Securities Exchange Act of 1934, as amended, and may not be furnished to any other person in the United States. Each major US institutional investor that receives a copy of this report by its acceptance hereof represents and agrees that it shall not distribute or provide this report to any other person. Any U.S. recipient of this report wishing to effect any transaction to buy or sell securities based on the information provided in this report should do so only through a U.S.-registered broker-dealer. # For recipients of this document in Singapore This report is distributed in Singapore by CMBI (Singapore) Pte. Limited (CMBISG) (Company Regn. No. 201731928D), an Exempt Financial Adviser as defined in the Financial Advisers Act (Cap. 110) of Singapore and regulated by the Monetary Authority of Singapore. CMBISG may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, as defined in the Securities and Futures Act (Cap. 289) of Singapore, CMBISG accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact CMBISG at +65 6350 4400 for matters arising from, or in connection with the report.