Cloud Music Inc. (9899) AI Stock Analysis

• Market Cap: HK$52.26B
• Dividend Yield: N/A
• Average Volume (3M): 652.73K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 1.09
• 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: 217,836,900
• 10 Day Avg. Volume: 369,715
• 30 Day Avg. Volume: 652,733
• 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$316.30
• Price Target Upside: 27.54% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 60 Neutral
• Price Target: HK$266.00 ▲(7.26% Upside)

Cloud Music Inc. demonstrates strong financial performance, particularly in profitability and balance sheet health, but faces challenges with cash flow stability. Technical indicators suggest bearish momentum, impacting the stock's short-term outlook. The valuation is reasonable, though the lack of a dividend yield may deter some investors.

Positive Factors

Balance Sheet Health

A strong balance sheet with low debt levels and a high equity ratio indicates financial stability and positions the company well for future growth.

Profitability

Improved net profit margins reflect strong cost management and revenue generation, enhancing the company's ability to reinvest in growth.

Operational Efficiency

Higher EBIT and EBITDA margins demonstrate effective operational management, contributing to sustained profitability and competitive positioning.

Negative Factors

Cash Flow Issues

Lack of operating cash flow suggests challenges in converting revenue into cash, which could limit financial flexibility and growth potential.

Revenue Growth Concerns

Sluggish revenue growth may hinder long-term sustainability, as robust growth is essential for maintaining market competitiveness and investor confidence.

Free Cash Flow Fluctuations

Volatile free cash flow can impact the company's ability to fund operations and strategic initiatives, posing a risk to financial stability.

Cloud Music Inc. Business Overview & Revenue Model

Company Description

Cloud Music Inc. (9899) is a leading digital music service provider that offers online music streaming, downloads, and related services. The company operates within the digital entertainment sector, focusing on delivering a vast catalog of music content to users through its platforms. It is dedicated to enhancing the music experience by offering personalized playlists, high-quality audio, and a wide range of music genres to cater to diverse user preferences.

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. shows strong profitability and balance sheet stability, with impressive gross and net profit margins and a low debt-to-equity ratio. However, cash flow issues, particularly the absence of operating cash flow, pose a risk to financial health.

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: 248.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 248 is below the 20-day moving average (MA) of 267.43, below the 50-day MA of 272.59, and above the 200-day MA of 203.87, indicating a neutral trend. The MACD of -7.63 indicates Positive momentum. The RSI at 33.87 is Neutral, neither overbought nor oversold. The STOCH value of 16.68 is Positive, 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	76 Outperform	HK$16.15B	17.66	44.82%	―	42.31%	21.65%
3738	65 Neutral	$13.56B	59.77	8.42%	―	22.86%	5105.88%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9899	60 Neutral	HK$52.26B	17.88	24.41%	―	-4.23%	108.65%
8083	53 Neutral	$6.66B	―	-8.12%	―	3.97%	-211.11%
2013	53 Neutral	$9.42B	―	-55.81%	―	-34.07%	-29.27%
3896	51 Neutral	HK$32.49B	―	-30.89%	―	19.98%	-9.04%

Cloud Music Inc. Corporate Events

NetEase Cloud Music Reports Strong Profit Growth Amid Revenue Decline

NetEase Cloud Music Inc. reported its interim results for the six months ending June 30, 2025, showing a 6% decline in revenue compared to the previous year. Despite the revenue drop, the company achieved a significant increase in operating profit by 40.8% and profit before income tax by 31.3%, attributed to a deferred income tax credit and effective cost management. The adjusted net profit also saw a substantial rise of 121%, indicating strong operational performance despite market challenges.

NetEase Cloud Music Inc. Schedules Board Meeting and Earnings Call for H1 2025 Results

NetEase Cloud Music Inc. has announced a board meeting scheduled for August 14, 2025, to review and approve the interim results for the first half of the year and consider the payment of an interim dividend. The company will also host an earnings conference call on the same day to discuss these results, indicating a proactive approach in maintaining transparency and engaging with stakeholders.

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.

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.