Cloud Music Inc. (9899) AI Stock Analysis

• Market Cap: HK$39.83B
• Dividend Yield: N/A
• Average Volume (3M): 590.28K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 1.14
• Revenue Growth: -4.23%
• EPS Growth: 108.65%
• Country: HK
• Employees: 1,359
• Sector: Communication Services
• Sector Strength: 97
• Industry: Software - Application
• EPS (TTM): 8.11
• Shares Outstanding: 217,877,720
• 10 Day Avg. Volume: 443,933
• 30 Day Avg. Volume: 590,279
• PEG Ratio: 0.13
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 2.82
• P/FCF Ratio: 12.65
• 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$306.67
• Price Target Upside: 62.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: HK$204.00 ▲(7.94% Upside)

Cloud Music Inc. has a solid financial foundation with strong profitability and a robust balance sheet. However, significant cash flow issues and bearish technical indicators weigh heavily on the stock's outlook. The reasonable valuation offers some upside potential, but the lack of dividend yield and negative market momentum are concerning.

Positive Factors

Balance Sheet Strength

A strong equity base and low debt levels provide financial stability and flexibility, positioning the company well for future growth.

Profitability Improvements

Improved profitability through better net profit margins reflects effective cost management and operational efficiency, supporting long-term sustainability.

Operational Efficiency

Enhanced EBIT and EBITDA margins demonstrate strong operational efficiency, which can drive profitability and competitive advantage over time.

Negative Factors

Cash Flow Concerns

Lack of operating cash flow raises concerns about cash conversion efficiency, which could impact the company's ability to fund operations and growth.

Revenue Growth Challenges

Moderate revenue growth may limit the company's ability to scale and compete effectively, necessitating strategies to boost top-line expansion.

Cash Flow Stability

Inconsistent cash flow generation could hinder the company's operational flexibility and ability to invest in growth opportunities.

Cloud Music Inc. Business Overview & Revenue Model

Company Description

Cloud Music Inc. (9899) is a leading technology company specializing in digital music streaming services. Operating primarily in the entertainment sector, the company provides a platform for users to access an extensive library of music tracks, playlists, and personalized recommendations. Its core products include a subscription-based streaming service, ad-supported free listening options, and exclusive content partnerships with artists and record labels.

How the Company Makes Money

Cloud Music Inc. generates revenue through multiple streams. The primary revenue model is subscription fees from its premium service, where users pay a monthly fee for ad-free listening and additional features. A secondary revenue stream comes from advertising, as the company offers a free tier that allows users to access music with ads. Additionally, Cloud Music Inc. has formed significant partnerships with record labels and independent artists, allowing it to earn licensing fees and revenue sharing from exclusive releases. The company also monetizes through merchandise sales and live event promotions, further diversifying its income sources.

Cloud Music Inc. Financial Statement Overview

Summary

Cloud Music Inc. has shown strong profitability and balance sheet stability, with improvements in net profit margin and ROE. However, cash flow inconsistencies, such as zero operating cash flow, present 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.71B	7.95B	7.87B	8.99B	7.00B	4.90B
Gross Profit	2.65B	2.68B	2.10B	1.29B	142.67M	-595.34M
EBITDA	1.40B	1.15B	787.37M	-356.13M	-1.34B	-1.50B
Net Income	2.64B	1.56B	734.18M	-221.49M	-2.06B	-2.95B
Balance Sheet
Total Assets	15.29B	13.58B	11.61B	10.89B	9.39B	8.06B
Cash, Cash Equivalents and Short-Term Investments	11.03B	10.22B	9.51B	9.11B	6.62B	4.79B
Total Debt	5.91M	6.47M	6.36M	8.40M	10.51M	11.16B
Total Liabilities	3.17B	3.40B	3.17B	3.07B	2.01B	13.36B
Stockholders Equity	12.12B	10.18B	8.44B	7.82B	7.38B	-5.31B
Cash Flow
Free Cash Flow	1.19B	1.77B	183.51M	1.82B	-947.91M	-990.02M
Operating Cash Flow	1.19B	1.77B	189.05M	1.84B	-908.41M	-969.46M
Investing Cash Flow	23.13M	-1.94B	1.23B	158.59M	-3.86B	3.41B
Financing Cash Flow	-4.23M	-62.06M	-307.68M	-2.91M	2.61B	-320.95M

Cloud Music Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 189.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 189 is below the 20-day moving average (MA) of 193.32, below the 50-day MA of 215.18, and below the 200-day MA of 223.91, indicating a bearish trend. The MACD of -6.40 indicates Negative momentum. The RSI at 42.44 is Neutral, neither overbought nor oversold. The STOCH value of 41.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9899.

Cloud Music Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9911	73 Outperform	HK$15.74B	17.72	44.82%	―	42.31%	21.65%
9899	62 Neutral	HK$39.83B	13.97	24.41%	―	-4.23%	108.65%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
3738	56 Neutral	HK$10.43B	47.57	8.42%	―	22.86%	5105.88%
3896	51 Neutral	HK$26.28B	-21.34	-15.92%	―	23.96%	55.68%
8083	43 Neutral	$4.43B	-48.21	-8.12%	―	3.97%	-211.11%
2013	40 Underperform	HK$7.11B	-4.26	-55.81%	―	-34.07%	-29.27%

Cloud Music Inc. Corporate Events

NetEase Cloud Music Grants Awards Under 2022 Plan

NetEase Cloud Music Inc. announced the grant of awards under its 2022 Restricted Share Unit Plan, using existing shares. The awards, granted to 12 eligible employee participants, will vest over a three-year period starting December 2025, contingent on performance targets. This initiative aims to incentivize employees while aligning their interests with company performance, potentially enhancing operational efficiency and market positioning. The plan includes a clawback mechanism to address any misconduct and ensures no shareholder rights until awards are vested.

NetEase Cloud Music Sees Slight Revenue Dip in Q3 2025

NetEase Cloud Music, a subsidiary of NetEase, reported a slight decline in net revenues for the third quarter of 2025, amounting to RMB2.0 billion, a 1.8% decrease from the same period in 2024. Despite the revenue dip, the company’s gross profit remained relatively stable, indicating effective cost management. The financial results, prepared under U.S. GAAP, differ from the IFRS standards used by Cloud Music Inc., highlighting the importance of cautious interpretation by investors.