BOCI Research: Lowering NetEase Cloud Music's target price to HK$200, maintaining a "buy" rating.

Bank of China International released a research report stating that in the second half of last year, the total revenue of NetEase Cloud Music increased by 1% compared to the previous year, slightly lower than the market's expectation of 1%. Online music revenue increased by 8% annually, driven by a 12% year-on-year growth in core music subscription revenue, but offset by a 17% year-on-year decline in social entertainment business revenue. The adjusted net profit margin was 23.2%, in line with market expectations. The bank believes that NetEase Cloud Music is committed to implementing its core music content, products, and monetization strategies to serve its differentiated young music fan base, benefiting from accelerated application of artificial intelligence. Despite intensifying competition in the domestic music market, the bank remains optimistic about the company's ability to gradually release the long-term value of its differentiated and highly sticky young music fans. The bank has lowered its total revenue forecast for NetEase Cloud Music for the current and next two years by 1%, but maintains its core music revenue forecast unchanged; it roughly maintains its adjusted operating profit forecast unchanged. The bank maintains its "buy" rating on the company, with a target price lowered from HKD 295 to HKD 200.