Cloud Music Inc.: Strong Financial Performance and Strategic Growth Initiatives Reinforce Buy Rating

CMB International Securities analyst Saiyi He maintained a Buy rating on Cloud Music Inc. (9899 – Research Report) yesterday and set a price target of HK$202.50.

Saiyi He has given his Buy rating due to a combination of factors that highlight Cloud Music Inc.’s strong financial performance and strategic initiatives. The company reported a notable increase in adjusted net profit, surpassing consensus estimates by 20%, which was largely driven by the enhanced profitability of its online music business and effective operational expense management. This financial strength is expected to continue, with forecasts for earnings growth in the coming years, supported by disciplined expense control and gross profit margin expansion.
Moreover, Cloud Music Inc. is focusing on improving user experience to drive long-term growth. The company has seen steady growth in monthly active users and increased user engagement, attributed to its unique content ecosystem and personalized recommendations. Key initiatives for the future include expanding the content library, fostering community development, and enhancing user experience to increase user willingness to pay. These strategic efforts are anticipated to sustain solid revenue growth in the online music services segment, reinforcing the Buy rating.

In another report released on February 23, Jefferies also maintained a Buy rating on the stock with a HK$190.00 price target.