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<Research>UBS: NETEASE MUSIC (09899.HK) 2H25 Earnings in Line, but Core Music Biz Weakens
Recommend 3 Positive 5 Negative 0 |
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NETEASE MUSIC (09899.HK)'s 2H25 revenue grew by 1.4% YoY to RMB3.932 billion, 4%/ 2.3% lower than the expectations of UBS/ the market each, according to UBS' research report. Gross profit was RMB1.377 billion, with a gross margin of 35%, both below the forecasts of the broker/ market. Non-GAAP operating profit amounted to RMB828 million, 1.9% ahead of the broker's estimation, due to strict cost control. Non-GAAP net profit reached RMB914 million, 6.6% above UBS' expectation, roughly in line with market consensus. UBS projected the market to react negatively to the weakening of NETEASE MUSIC's core music business, although recent share price trends may have largely reflected this. Investors will focus on strategies to drive growth in the music user base and ARPPU, profit outlook and the latest developments in the competitive landscape. Therefore, the broker rated NETEASE MUSIC at Buy, with a target price of $350. AASTOCKS Financial News Website: www.aastocks.com |
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