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<Research>UBS Expects NETEASE MUSIC (09899.HK) ARPPU to Pick up Growth, Cuts TP to HKD300, Reiterates Buy
Recommend 2 Positive 3 Negative 2 |
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NETEASE MUSIC (09899.HK)'s revenue for 2H25 missed forecast, with online music business revenue mounting 8% YoY, 4.7% below street consensus, while earnings were in line, UBS Global Research's report indicated. The deceleration in online music growth was attributable to the dilution of ARPPU, reflecting a shift in subscriber mix towards lower-priced 88VIP and student memberships, while the growth in subscription user numbers remained healthy, estimated at 16% YoY. Looking ahead to 2026, management reiterated its focus on expanding user and subscription user scale through high-quality and differentiated content, with targets for positive growth in both subscriber numbers and ARPPU. Although many investors are skeptical about the ARPPU outlook, the broker assumed the company can achieve ARPPU growth again by narrowing discount ranges and stabilizing the subscriber mix. UBS maintained a Buy rating on NETEASE MUSIC, with the target price lowered from HKD350 to HKD300. AASTOCKS Financial News Website: www.aastocks.com |
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