CLOUD MUSIC(9899.HK):SOLID CORE MUSIC BUSINESS AND MARGIN EXPANSION OUTLOOK
CLOUD MUSIC(9899.HK):SOLID CORE MUSIC BUSINESS AND MARGIN EXPANSION OUTLOOK
Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate. 2H23 total revenue was down by 16% YoY to RMB3.96bn, mainly due to the adjustment of social entertainment business (-42% YoY). Cloud music recorded adjusted net income of RMB819mn in FY23, beating our/consensus estimate of RMB686/629mn, thanks to the solid GPM improvement (+12.3ppt YoY). We expect social entertainment business to remain under pressure, and thus lower FY24-25E revenue forecast by 6-8%. However, we are positive on the core music business growth and GPM expansion, supported by the growing paid user base. We raise FY24-25E adjusted net income forecast by 1-2%, and lift our DCF-derived target price to HK$106.5 (previous: HK$99.5). Maintain BUY.
雲音樂公佈了23財年財務業績：23財年總收入同比下降13％，至78.7億元人民幣，符合我們/共識的估計。下半年的總收入同比下降16％，至39.6億元人民幣，這主要是由於社交娛樂業務的調整（同比下降42％）。得益於GPM的穩步改善（同比增長12.3個百分點），雲音樂在23財年錄得了8.19億元人民幣的調整後淨收入爲人民幣8.19億元，超過了我們共識估計的6.86億元/6.29億元人民幣。我們預計社交娛樂業務仍將承受壓力，因此將 FY24-25E 收入預測降低6-8％。但是，在不斷增長的付費用戶群的支持下，我們對核心音樂業務的增長和GPM的擴張持樂觀態度。我們將調整後的 FY24-25E 淨收益預測上調了1-2％，並將差價合約衍生的目標價格上調至106.5港元（先前：99.5港元）。維持買入。
Positive on core music business outlook. Online music revenue was up by 22% YoY to RMB2.3bn and accounted for 59% of total revenue in 2H23 (1H23: +13% YoY), driven by solid growth of subscription business (+24% YoY) and strengthened ad monetization capabilities. Average monthly paying users grew by 15% YoY to 44.1mn in 2023, with paying ratio rising by 1.2ppt YoY to 21.4% in 2023. For 2024, we expect online music revenue to grow by 17% YoY, driven by 16% YoY growth in monthly paying users. Social entertainment business was under pressure, with revenue down 42% YoY to RMB1.6bn in 2H23, due to operating strategy adjustment. In 1Q24, Cloud Music launched a comprehensive product upgrade to focus more on its core music business, which however may impact live streaming user traffic and revenue in FY24. We forecast social entertainment revenue to decline by 18% YoY in 2024E.
對核心音樂業務前景持樂觀態度。在線音樂收入同比增長22％，達到23億元人民幣，佔23年下半年總收入的59％（上半年：同比增長13％），這得益於訂閱業務的穩步增長（同比增長24％）和廣告變現能力的增強。2023年，平均月付費用戶同比增長15％，達到4,410萬，付費比率同比增長1.2個百分點至2023年的21.4％。我們預計2024年的在線音樂收入將同比增長17％，這得益於每月付費用戶同比增長16％。社交娛樂業務面臨壓力，由於運營策略的調整，23年下半年收入同比下降42％至16億元人民幣。在24財年第一季度，Cloud Music推出了全面的產品升級，將重點更多地放在其核心音樂業務上，但這可能會影響24財年的直播用戶流量和收入。我們預測，到2024年，社交娛樂收入將同比下降18％。
Driving quality development of music ecosystem. Average MAUs recorded steady growth of 9% YoY to 205.9mn in 2023, with DAU/MAU consistently above 30%. Cloud music leverages AI capability to further enhance users' music discovery and consumption experience in 2023, with an increasing percentage of music streams from the platform's recommendation. The company continues to expand its content library, with no. of music tracks up by 28% YoY to 149mn as of 2023-end. In addition, Cloud Music enriched the long-form audio offerings on its platform, with total listening time of audio content up by 71% YoY in 2023.
推動音樂生態系統的質量發展。2023年，平均月活躍用戶同比穩定增長9％，達到2.059億，平均月活躍用戶數持續超過30％。雲音樂利用 AI 能力，在 2023 年進一步增強用戶的音樂發現和消費體驗，來自平台推薦的音樂流的百分比也將增加。該公司繼續擴大其內容庫，截至2023年底，音樂曲目數量同比增長28％，達到1.49億首。此外，雲音樂豐富了其平台上的長篇音頻產品，2023年音頻內容的總收聽時間同比增長了71％。
Solid margin expansion ahead. Overall GPM expanded by 12.8ppt YoY to 28.7% in 2H23, due to the improved music monetization, optimized content cost and revenue sharing ratio. We forecast GPM will rise to 31.0/33.7/35.5% over FY24-26E. We are upbeat on Cloud Music earnings growth outlook supported by its solid core music business and economies of scale. We forecast adjusted net income to grow at a CAGR of 28% over FY24-26E, and view its current valuation of 18x FY24E PE attractive.
未來利潤率將穩步增長。由於音樂盈利能力的提高、內容成本的優化和收入分成比率的優化，2023年下半年的整體GPM同比增長了12.8個百分點至28.7％。我們預測，GPM 將比 FY24-26E 升至 31.0/33.7/ 35.5%。在穩健的核心音樂業務和規模經濟的支持下，我們對Cloud Music的收益增長前景持樂觀態度。我們預測，調整後的淨收入將比 FY24-26E 以28％的複合年增長率增長，並認爲其當前18倍 FY24E 市盈率的估值具有吸引力。
譯文內容由第三人軟體翻譯。