NetEase Cloud Music (SEHK:9899) Margin Surge To 35.4% Challenges Cautious Growth Narratives

Simply Wall St.04-16

NetEase Cloud Music (SEHK:9899) has posted its FY 2025 results with second half revenue of C¥3,932.3 million and basic EPS of C¥4.08, while investors also have a full year view from trailing 12 month ...

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The company has seen revenue move from C¥3,879.7 million and EPS of C¥3.60 in the second half of FY 2024 to C¥3,932.3 million and EPS of C¥4.08 in the latest half, with the trailing 12 month EPS rising from C¥7.48 to C¥13.02 alongside a net profit...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","LU0210526637.USD":"JPM CHINA \"A\" (USD) ACC","LU1121112475.USD":"NINETY ONE GSF GLOBAL FRANCHISE \"A\" (USDHDG) ACC","LU0633140727.USD":"AB EMERGING MARKETS MULTI ASSET PORTFOLIO \"AD\" (USD) INC","LU0828237510.HKD":"SCHRODER ISF BIC (BRAZ IN CH)\"A\" (HKD) ACC","LU1720050803.USD":"安联全方位中国股票基金","LU1961090484.USD":"ALLIANZ ALL CHINA EQUITY \"A\" (USD) INC","LU0737861772.HKD":"FIDELITY EMERGING ASIA \"A \" (HKD) ACC","LU1303224171.USD":"NINETY ONE GSF ALL CHINA EQUITY \"A\" (USD) INC","LU0231483743.USD":"abrdn SICAV I - ALL CHINA SUSTAINABLE EQUITY \"A\" (USD) ACC","LU0823413587.USD":"BNP PARIBAS EMERGING EQUITY \"C\" (USD) ACC","LU0192582467.USD":"SCHRODER ISF ASIAN EQUITY YIELD \"A\" (USD) INC MF","LU0862451753.SGD":"JPMorgan Funds - Emerging Markets Dividend A (mth) SGD","NTES":"网易","LU0871576103.HKD":"HSBC GIF CHINESE EQUITY \"AC\" (HKD) ACC","BK1588":"回港中概股","09999":"网易-S","IE00BGHQDM52.EUR":"GUINNESS ASIAN EQUITY INCOME \"C\" (EUR) ACC","LU0426417589.USD":"NINETY ONE GSF GLOBAL FRANCHISE \"A\" (USD) INC","LU0169518387.USD":"JPM ASIA EQUITY \"A\" ACC","LU2152927971.USD":"NORDEA 1 ASIAN STARS EQUITY \"BP\" (USD) ACC","BK1104":"互动家庭娱乐","LU1228905037.USD":"NINETY ONE GSF GLOBAL QUALITY DIVIDEND GROWTH \"A\" (USD) ACC","IE0032834883.USD":"FSSA ASIAN EQUITY PLUS \"I\" (USD) INC","SG9999001846.SGD":"Schroder Asian Equity Yield A Dis SGD","IE00BVYPNP33.GBP":"GUINNESS ASIAN EQUITY INCOME \"C\" (GBP) ACC","LU1226288097.SGD":"UBS (LUX) KEY SEL S-CHINA ALLOCATION OPP \"P\" (SGDHDG) INC A","LU1734074674.USD":"NINETY ONE GSF ASIA PACIFIC FRANCHISE \"A\"(USD) ACC","LU1228905540.USD":"NINETY ONE GSF GLOBAL QUALITY DIVIDEND GROWTH \"A\" (USD) INC 2","IE00BVYPNQ40.USD":"GUINNESS ASIAN EQUITY INCOME \"C\" (USD) ACC","LU0067412154.USD":"UBS (LUX) EQUITY FUND -  CHINA OPPORTUNITY \"P\" (USD) ACC","LU1226288170.HKD":"UBS (LUX) KEY SEL S-CHINA ALLOCATION OPP \"P6%\"(HK D) INC","IE00BZ08YS42.EUR":"GUINNESS BEST OF CHINA \"C\" (EUR) ACC","HK0000306685.HKD":"TAIKANG KAITAI CHINA NEW OPPORTUNITIES FUND \"A\" (HKD) INC","LU0588546209.SGD":"Eastspring Investments - China Equity Fund AS SGD","LU2242644610.SGD":"Fidelity China Innovation A-ACC-SGD","LU0210527791.USD":"JPM ASIA PACIFIC INCOME \"A\" (USD) ACC","LU0370786039.SGD":"Fidelity Greater China A-SGD","LU1152091754.HKD":"UBS (LUX) EQUITY FUND - CHINA OPPORTUNITY (USD) \"PM\" (HKD) INC","LU0737861699.HKD":"FIDELITY CHINA FOCUS \"A \" (HKD) ACC","LU0868486357.SGD":"JPMorgan Funds - Emerging Markets Opportunities A (acc) SGD-H","09899":"网易云音乐","LU0594300419.USD":"富达中国消费基金A","LU0228659784.USD":"施罗德金砖四国基金","LU1328615791.USD":"FULLERTON LUX FUNDS - ALL CHINA EQUITIES \"I\" (USD) ACC","LU1251922891.USD":"NINETY ONE GSF ALL CHINA EQUITY \"A\" (USD) ACC","IE00BYV24P56.USD":"GUINNESS EMERGING MARKETS EQUITY INCOME \"C\" (USD) ACC","LU1224709979.USD":"FIDELITY CHINA FOCUS \"A\" (USD) ACC","BK4577":"网络游戏","LU1688375341.USD":"贝莱德中国灵活股票基金"},"translate_title":"网易云音乐（SEHK：9899）利润率飙升至35.4%挑战谨慎的增长叙事","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"09999":1.5,"NTES":1.5,"09899":0.9},"content_text":"NetEase Cloud Music (SEHK:9899) has posted its FY 2025 results with second half revenue of C¥3,932.3 million and basic EPS of C¥4.08, while investors also have a full year view from trailing 12 month revenue of C¥7,759.5 million and EPS of C¥13.02. The company has seen revenue move from C¥3,879.7 million and EPS of C¥3.60 in the second half of FY 2024 to C¥3,932.3 million and EPS of C¥4.08 in the latest half, with the trailing 12 month EPS rising from C¥7.48 to C¥13.02 alongside a net profit margin that has shifted higher. This may prompt investors to focus on how durable these margin levels might be. See our full analysis for NetEase Cloud Music. With the headline numbers set, the next step is to weigh them against the prevailing narratives around NetEase Cloud Music, highlighting where the recent results support those stories and where they start to push back. Curious how numbers become stories that shape markets? Explore Community Narratives SEHK:9899 Earnings & Revenue History as at Apr 2026 Advertisement76% profit growth and 35.4% margin stand out  Over the last 12 months, NetEase Cloud Music generated trailing net income of C¥2,748.2 million on C¥7,759.5 million of revenue. This works out to a 35.4% net profit margin compared with 19.6% a year earlier and earnings growth of 76% year over year. What stands out for a bullish view is how this profitability sits alongside steady revenue, with trailing revenue of C¥7,759.5 million versus C¥7,950.1 million in the prior trailing period. This means:\n     Bulls pointing to high quality earnings now have concrete backing in the form of a 35.4% margin, well above the 19.6% level cited for the prior year. The 76% earnings increase over the same timeframe suggests the profit story is doing more work than revenue growth, which bullish investors may see as evidence that the current margin profile is a key focus area.    Over the last year of reporting, bulls argue that this shift in profitability is central to the NetEase Cloud Music story, and they may want a closer look at how those margins tie into longer term expectations through the 📊 Read the what the Community is saying about NetEase Cloud Music.. Valuation sits at 8.7x P/E with DCF fair value above price  The shares trade on a trailing P/E of 8.7x compared with a Hong Kong Entertainment industry average of 11.5x and a peer average of 15.6x, while the DCF fair value cited is HK$269.29 against a current share price of HK$127.80. Critics highlight that even with this relative value picture, forward growth expectations are softer, as earnings are forecast to grow 0.8% per year versus a 12.5% forecast for the wider Hong Kong market. This means:\n     The discount to the DCF fair value and lower P/E can be read as supportive for bullish investors who focus on trailing results, but the more modest 0.8% earnings growth forecast gives bearish investors a clear reference point when they question how much of that discount is justified. The 7.9% revenue growth forecast compared with 8.6% for the market adds to that tension, since it keeps growth close to market levels but not above them, which can lead both sides to focus heavily on how long the recent profit margin of 35.4% is maintained.    Half year splits show earnings concentration in H1 FY 2025  Within FY 2025, first half net income of C¥1,885.5 million on revenue of C¥3,827.1 million compares with second half net income of C¥862.7 million on C¥3,932.3 million of revenue, so the majority of the C¥2,748.2 million trailing net income is concentrated in the first half. Skeptical investors point out that this pattern matters for a bearish view, because:\n     H1 FY 2025 earnings are roughly double H2 FY 2025 earnings on similar revenue levels, which can raise questions for bears about how consistent the current profit run rate is, especially when forecasts already show 0.8% annual earnings growth. Comparing H2 FY 2025 net income of C¥862.7 million with H2 FY 2024 net income of C¥751.7 million shows progress, but the heavier skew to H1 keeps the focus on how each half contributes to the trailing 35.4% margin that bullish investors often highlight.    Next Steps Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on NetEase Cloud Music's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move. These results can look either encouraging or cautious depending on what you focus on, so it is worth checking the details yourself and forming a view while the information is fresh. To see what optimistic investors are watching, take a look at the 3 key rewards. See What Else Is Out There The tension between a 35.4% margin, softer 0.8% earnings growth forecasts and earnings concentration in H1 FY 2025 leaves some investors questioning how dependable the current profit profile is. If you want ideas where pricing already reflects stronger earnings conviction and balance sheet support, use the solid balance sheet and fundamentals stocks screener (392 results) to quickly surface candidates that may fit that brief.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if NetEase Cloud Music might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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