NetEase Cloud Music Reports 113% Net Profit Surge

NetEase Cloud Music sees net profit soar 113% to RMB1.57 billion. This impressive growth signals positive trends despite a modest revenue increase. Investors should consider these factors in their evaluation of stock performance.

Date: 20-02-2025

AI Rating: 7

Net Profit Growth
NetEase Cloud Music reported a significant increase in net profit for fiscal 2024, rising by 113.2% to RMB1.57 billion, up from RMB734.2 million in the previous year. This substantial growth in net profit is a positive indicator for the company's financial health, suggesting strong operational efficiency and cost management.

Adjusted Net Profit
Adjusted net profit also saw an increase, reaching RMB1.70 billion compared to RMB818.5 million in 2023. The strong growth in adjusted net profit reinforces the company’s capacity to generate income beyond standard accounting measures.

Revenue Analysis
While overall revenue increased modestly by 1.1% to RMB7.95 billion from RMB7.87 billion, the breakdown reveals deeper insights. Revenue from online music services significantly grew by 23.1%, reaching RMB5.4 billion. This indicates a robust demand for their music services and successful subscription model.

Revenue from membership subscriptions also reflects healthy growth, increasing from RMB3.6 billion in 2023 to RMB4.5 billion. Such growth suggests strong user retention and an increasing willingness to pay for services.

However, revenue from social entertainment services dropped to RMB2.6 billion from RMB3.5 billion. This decline could indicate challenges in that segment, which may concern investors about long-term growth in that area.

Stocks: NTES