External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.</li><li>2H23 total revenue was down by 16% YoY to RMB3.96bn, mainly due to the adjustment of social entertainment business (-42% YoY).</li><li>Cloud music recorded adjusted net income of RMB819mn in FY23, beating our/consensus estimate of RMB686/629mn, thanks to the solid GPM improvement (+12.3ppt YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.2H23 total revenue was down by 16% YoY to RMB3.96bn, mainly due to the adjustment of social entertainment business (-42% YoY).Cloud music recorded adjusted net income of RMB819mn in FY23, beating our/consensus estimate of RMB686/629mn, thanks to the solid GPM improvement (+12.3ppt YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) - Solid Core Music Business and Margin Expansion Outlook

<ul><li>Cloud Music reported 1H23 financial results: total revenue declined by 8% YoY to RMB3.9bn (in line with consensus estimate), mainly due to the operational adjustment to social entertainment business.</li><li>Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM (+12pct YoY).</li><li>As social entertainment business continues to face pressure, we lower FY23-25E total revenue forecast by 8-9%; but we raise FY23-FY25E adjusted net income forecast to RMB686/974/1,365mn (previous: RMB194/618/1,065mn) on 1) better content cost saving; 2) optimized live streaming revenue-sharing ratio; 3) enhanced operating efficiency. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music reported 1H23 financial results: total revenue declined by 8% YoY to RMB3.9bn (in line with consensus estimate), mainly due to the operational adjustment to social entertainment business.Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM (+12pct YoY).As social entertainment business continues to face pressure, we lower FY23-25E total revenue forecast by 8-9%; but we raise FY23-FY25E adjusted net income forecast to RMB686/974/1,365mn (previous: RMB194/618/1,065mn) on 1) better content cost saving; 2) optimized live streaming revenue-sharing ratio; 3) enhanced operating efficiency. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) – 1H23 Earnings Beat on Strong GPM Expansion

Thematic (Sector/Industry)

<ul><li>Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our previous expectation.</li><li>From a full-year perspective, given the rate cut cycle has not yet started and liquidity remains tight, we suggest focusing on: 1) companies capable of boosting shareholder returns or maintaining decent returns, supported by solid fundamentals (strong competitive advantages, steady growth in core business, and stable profitability) and committed to enhancing shareholder returns (also depends on management's willingness), such as Alibaba, Tencent, and NetEase;</li><li>2) companies whose new businesses have significant market potential and are poised to bring considerable capital gains in the long run, particularly from overseas expansion and AI-related initiatives, such as Pinduoduo, Tencent, Alibaba, and Trip.com</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our previous expectation.From a full-year perspective, given the rate cut cycle has not yet started and liquidity remains tight, we suggest focusing on: 1) companies capable of boosting shareholder returns or maintaining decent returns, supported by solid fundamentals (strong competitive advantages, steady growth in core business, and stable profitability) and committed to enhancing shareholder returns (also depends on management's willingness), such as Alibaba, Tencent, and NetEase;2) companies whose new businesses have significant market potential and are poised to bring considerable capital gains in the long run, particularly from overseas expansion and AI-related initiatives, such as Pinduoduo, Tencent, Alibaba, and Trip.comContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Internet - 1Q24 recap & our three stock-picking ideas

<ul><li>Cloud Music gradually shifts its focus from revenue growth to sustainable earnings growth.</li><li>We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered revenue sharing ratio to drive quality growth of social entertainment business.</li><li>Despite the revenue decline, we expect Cloud Music to achieve breakeven and generate adjusted net income of RMB42mn in 1H23 (1H22: net loss of RMB217mn), mainly due to the enhanced GPM (+10pcts YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music gradually shifts its focus from revenue growth to sustainable earnings growth.We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered revenue sharing ratio to drive quality growth of social entertainment business.Despite the revenue decline, we expect Cloud Music to achieve breakeven and generate adjusted net income of RMB42mn in 1H23 (1H22: net loss of RMB217mn), mainly due to the enhanced GPM (+10pcts YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) – 1H23 Preview: Solid Improvement in Profitability

<ul><li>Cloud Music reported FY22 financial results on 23 Feb. Total revenue was up by 24% YoY to RMB4.7bn in 2H22, largely in line with our/consensus estimate of RMB4.6/4.8bn.</li><li>FY22 total revenue grew by 29% YoY to RMB9.0bn in FY22, driven by solid growth of social entertainment and music subscription businesses.</li><li>Cloud Music recorded positive adjusted net income of RMB102mn in 2H22 versus adjusted net loss of RMB511mn in 2H21, beating our/consensus estimate (adj. net loss of RMB135/188mn), mainly attributable to the strong GPM expansion and effective control in marketing. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music reported FY22 financial results on 23 Feb. Total revenue was up by 24% YoY to RMB4.7bn in 2H22, largely in line with our/consensus estimate of RMB4.6/4.8bn.FY22 total revenue grew by 29% YoY to RMB9.0bn in FY22, driven by solid growth of social entertainment and music subscription businesses.Cloud Music recorded positive adjusted net income of RMB102mn in 2H22 versus adjusted net loss of RMB511mn in 2H21, beating our/consensus estimate (adj. net loss of RMB135/188mn), mainly attributable to the strong GPM expansion and effective control in marketing. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) – Strong GPM expansion supported the breakeven in 2H22

China

Beijing Enlight Media Company Limited invest, produces and distributes television programs, films and teleplays. The Company's major products include TV shows, TV entertainment programs, films and drama series.

Chinese Universe Publishing and MediaCo., Ltd. manufactures enamel-covered wires and other copper wires.  Through its subsidiaries, the Company also manufactures buses and related parts.

Chinese Universe Publishing&Media (600373 CH)

China South Publishing & Media Group Company Ltd. is a media company.  The Company prints, publishes and distributes books, newspapers and journals; develops audio-visual materials; and offers digital publishing services.

ChineseAll Digital Publishing Group Co Ltd provides digital and print publishing services in China.

Chineseall Digital Publishing (300364 CH)

CITIC Guoan Information Industry Co., Ltd., through its subsidiary, installs, tests, and operates cable TV and satellite telecommunication networks. The Company also develops real estate properties .  In addition, CITIC designs network integrated systems and application software, and provides advertising services.

Jiangsu Phoenix Publishing & Media Corporation Limited publishes, distributes books, publications and audio-visual products, and sells cultural goods. The Company's main products include textbooks, teaching aids, and general books.

Central China Land Media Co., Ltd. operates media businesses.  The company provides web services for news, publishing, movies and television related programs.

Wasu Media Holding Company Limited is a cable network provider. The Company offers cable television network operating services, interactive television, mobile phone television, internet television and video, advertising and other media information services. Wasu Media operates throughout China.

Zhe Jiang Daily Media Group Co., Ltd is a media company. The Company's interests include communication and culture industries, investment, development, management and consulting services, information integration, radio, television and other multimedia content production and management, new media technology development and investment.

China Literature is the largest online literature platform in China

DISH Network Corp. provides a direct broadcast satellite subscription television, audio programming and interactive television services to commercial and residential subscribers in the United States.

Cable One, Inc. operates as a cable company. The Company offers data, video, and voice services. Cable One serves residential and business consumers in the United States.

FUJI MEDIA HOLDINGS, INC., a member of the Fuji-Sankei Group, produces and broadcasts a variety of television programs and sells commercial spots through a network system.  The Company is advancing into digital satellite broadcasting.

KADOKAWA DWANGO CORP is a holding company established through the merger of DWAN GO and KADOKAWA. The company publishes a variety of books and magazines as well as produces movies and videos.  KADOKAWA DWANGO CORP also develops and makes int ernet communication tools for cellular phones.

Cinemark Holdings, Inc. operates movie theaters.  The Company operates in the United States and Latin America.

CyberAgent, Inc. operates blog media website, Ameba.  The Company also operates internet advertising agency, foreign exchange trading website, and creates PC and mobile contents such as advertisements and games. CyberAgent invests in companies with internet related business.

HAKUHODO DY HOLDINGS INCORPORATED is a holding company established through the merger of Hakuhodo Inc., Daiko Advertising Inc., and Yomiko Advertising Inc. The Company, through its subsidiaries, provides comprehensive advertising services.

TEGNA Inc. is an international broadcasting and digital media company. The Company owns and operates television and radio stations, delivering news and informative content. TEGNA also provides digital marketing solutions in the automotive, human capital and digital marketing industries for individuals and businesses.

TOEI ANIMATION CO., LTD. plans and produces animated cartoon movies.  The Company also grants broadcasting rights and licenses for other companies to produce and sell the animated characters' merchandise.  Toei Animation stages its own promotional shows and events to advertise movies.

Telenet Group Holding NV provides telephone and internet services through a network of fiber-optic and coaxial cable.  The company offers customized packages to businesses and individual clients in Belgium.

CLOUD VILLAGE INC operates as a music company. The Company develops a leading online music paltform which provides community centric online music services, social entertainment services, and other services. Cloud Village provides its services throughout China.

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Cloud Village (9899 HK)

Cloud Music (9899 HK) - Solid Core Music Business and Margin Expansion Outlook

Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.

CMB International

Cloud Music (9899 HK) – 1H23 Earnings Beat on Strong GPM Expansion

Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM...

CMB International

Internet - 1Q24 recap & our three stock-picking ideas

Year to date, the internet sector has pulled back after rapid rallies buoyed by improved sentiment and short-term fund inflows, in line with our...

CMB International

Cloud Music (9899 HK) – 1H23 Preview: Solid Improvement in Profitability

We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered...

CMB International

Cloud Music (9899 HK) – Strong GPM expansion supported the breakeven in 2H22

Cloud Music reported FY22 financial results on 23 Feb. Total revenue was up by 24% YoY to RMB4.7bn in 2H22, largely in line with our/consensus...

CMB International

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