Cloud Music Inc. (9899) AI Stock Analysis

• Market Cap: HK$57.97B
• Dividend Yield: N/A
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): 33.9
• Beta (1Y): 1.13
• Revenue Growth: -0.89%
• EPS Growth: 110.44%
• Country: HK
• Employees: 1,359
• Sector: Communication Services
• Sector Strength: 76
• Industry: Software - Application
• EPS (TTM): 8.11
• Shares Outstanding: 217,782,650
• 10 Day Avg. Volume: 1,273,904
• 30 Day Avg. Volume: 1,020,260
• PEG Ratio: 3.10
• Price to Book (P/B): 5.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 91.26
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$268.50
• Price Target Upside: -0.19% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: HK$304.00 ▲(13.01%Upside)

Cloud Music Inc.'s stock score is bolstered primarily by strong technical momentum and solid financial performance, particularly in profitability and balance sheet metrics. However, valuation concerns due to a high P/E ratio and cash flow issues are notable risks that weigh on the overall score.

Positive Factors

Financial Performance

Adjusted net profit grew by 108% YoY to RMB1.70bn, 20% ahead of consensus estimates, mainly thanks to the improved profitability of online music business and effective opex control.

Revenue Growth

Online music services revenue grew by 27% YoY to RMB2.56bn in 1H24, driven by strong growth of both membership subscription revenue and advertising revenue.

Negative Factors

Revenue Decline

Social entertainment and others revenue was down by 33% YoY to RMB1.1bn in 2H24, as the company adopted a more prudent operational approach for the live streaming services.

Cloud Music Inc. Business Overview & Revenue Model

Company Description

Cloud Village Inc., an investment holding company, engages in the operation of online platforms to provide music and social entertainment services in the People's Republic of China. The company offers music membership subscriptions, sublicensing of content royalties, and online advertising services, as well as sells digital albums, virtual items, and singles; and hosts live streaming services. It also offers NetEase Cloud Music, an online music platform; and ancillary, social entertainment products, such as LOOK Live Streaming, Sheng Bo, and Yin Jie. In addition, the company provides artist management, online music streaming, and music production services. It serves advertisers and paying users. The company was founded in 2013 and is headquartered in Hangzhou, China. Cloud Village Inc. is a subsidiary of NetEase, Inc.

How the Company Makes Money

Cloud Music Inc. generates revenue primarily through a subscription-based model where users pay a recurring fee to access premium features such as ad-free listening, offline downloads, and enhanced audio quality. Additionally, the company earns from advertising by offering free-tier users music content with ads interspersed. Cloud Music Inc. also partners with various artists and record labels to host exclusive content and events, which can drive additional user engagement and revenue through special promotions and partnerships. Other revenue streams include merchandise sales and licensing deals with third-party platforms.

Cloud Music Inc. Financial Statement Overview

Summary

Cloud Music Inc. has demonstrated strong profitability and balance sheet stability with significant improvements in net profit margin and ROE. However, cash flow issues, including zero reported operating cash flow, pose a risk that needs addressing.

Income Statement

Cloud Music Inc. has demonstrated significant improvements in its income statement over recent years. The gross profit margin for the latest year stood at 33.7%, highlighting strong cost management and revenue generation capabilities. The net profit margin has also improved to 19.6%, indicating enhanced profitability. Revenue growth from the previous year was moderate at 1.1%, but the substantial improvement in EBIT and EBITDA margins to 14.7% and 14.5% respectively showcases operational efficiency. Despite these strengths, revenue growth could be more robust to ensure long-term sustainability.

Balance Sheet

The balance sheet of Cloud Music Inc. is solid, featuring a strong equity base with an equity ratio of 74.9%. The debt-to-equity ratio is low at 0.06, indicating minimal leverage and financial risk. Return on equity (ROE) has improved significantly to 15.3%, driven by increased net income. The company's healthy asset base and low debt levels position it well for future growth, although maintaining this low leverage amidst potential expansion could be challenging.

Cash Flow

Cash flow analysis reveals areas needing improvement. The operating cash flow to net income ratio is not available for the latest year due to zero reported operating cash flow, indicating potential cash conversion issues. Historically, free cash flow has shown fluctuations, and with a reported free cash flow of zero for the latest period, the company's ability to generate cash independently is a concern. Improving cash flow stability will be crucial for sustaining growth and operational flexibility.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.95B	7.87B	10.18B	8.58B	5.81B
Gross Profit	2.68B	2.10B	1.46B	175.04M	-707.03M
EBITDA	1.15B	787.37M	-403.04M	-1.64B	-1.50B
Net Income	1.56B	734.18M	-250.67M	-2.52B	-3.51B
Balance Sheet
Total Assets	13.58B	11.61B	10.89B	9.39B	8.06B
Cash, Cash Equivalents and Short-Term Investments	10.22B	9.51B	9.11B	6.62B	4.79B
Total Debt	6.47M	6.36M	8.40M	10.51M	11.16B
Total Liabilities	3.40B	3.17B	3.07B	2.01B	13.36B
Stockholders Equity	10.18B	8.44B	7.82B	7.38B	-5.31B
Cash Flow
Free Cash Flow	1.77B	183.51M	1.82B	-947.91M	-990.02M
Operating Cash Flow	1.77B	189.05M	1.84B	-908.41M	-969.46M
Investing Cash Flow	-1.94B	1.23B	158.59M	-3.86B	3.41B
Financing Cash Flow	-62.06M	-307.68M	-2.91M	2.61B	-320.95M

Cloud Music Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 269.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9899, the sentiment is Positive. The current price of 269 is above the 20-day moving average (MA) of 268.61, above the 50-day MA of 241.95, and above the 200-day MA of 163.59, indicating a bullish trend. The MACD of 11.87 indicates Positive momentum. The RSI at 54.09 is Neutral, neither overbought nor oversold. The STOCH value of 22.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9899.

Cloud Music Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9899	71 Outperform	HK$57.97B	33.95	16.82%	―	-0.89%	110.44%
Sector *	62 Neutral	$42.18B	-1.56	-12.06%	2.81%	2.10%	-71.01%
CHNVF	―	$480.73M	―	-16.87%	―	―	―
VOBIF	―	$1.14B	57.04	7.04%	―	―	―
WEMXF	―	$944.46M	―	-77.88%	―	―	―
9911	77 Outperform	HK$16.36B	25.81	36.24%	―	51.54%	-11.81%
3896	61 Neutral	HK$34.68B	―	-33.05%	―	13.37%	3.82%

Cloud Music Inc. Corporate Events

NetEase Cloud Music Inc. AGM Results: All Resolutions Passed

NetEase Cloud Music Inc. successfully held its Annual General Meeting on June 25, 2025, where all proposed resolutions were passed. Key outcomes included the re-election of directors, authorization for share repurchase, and the reappointment of PricewaterhouseCoopers as auditors. These decisions are set to impact the company’s governance and financial strategies positively.

The most recent analyst rating on (HK:9899) stock is a Buy with a HK$110.00 price target. To see the full list of analyst forecasts on Cloud Music Inc. stock, see the HK:9899 Stock Forecast page.

Cloud Music Inc. Grants Awards Under 2022 Plan

Cloud Music Inc. announced the grant of awards under its 2022 Restricted Share Unit Plan, using existing shares. The awards, granted to nine eligible employee participants, have a vesting period of three years starting from June 2025, with performance targets and a clawback mechanism in place. This initiative reflects the company’s commitment to incentivizing employees while managing share distribution effectively, potentially impacting its operational dynamics and stakeholder interests.

The most recent analyst rating on (HK:9899) stock is a Buy with a HK$110.00 price target. To see the full list of analyst forecasts on Cloud Music Inc. stock, see the HK:9899 Stock Forecast page.

NetEase Cloud Music Sees Revenue Decline in Q1 2025

NetEase Cloud Music Inc. reported a decrease in net revenues for the first quarter of 2025, with figures reaching RMB1.9 billion (US$256.1 million), marking an 8.4% decline compared to the same quarter in 2024. This decline was primarily attributed to reduced revenues from its social entertainment services, impacting the company’s financial performance and potentially affecting its market positioning.

The most recent analyst rating on (HK:9899) stock is a Buy with a HK$110.00 price target. To see the full list of analyst forecasts on Cloud Music Inc. stock, see the HK:9899 Stock Forecast page.