Lyon: Raised target price of NetEase Cloud Music to HK$250, reiterates "outperform" rating with high confidence in outperforming the market.

Lyon released a research report stating that NetEase Cloud Music has steadily implemented its scale-first strategy in the past few quarters, consolidating its leading position among young people in high-end cities. The firm has raised its long-term forecast for paid users, expecting the growth trend in market share to continue, along with the long-term potential for expansion of average revenue per paid user and profit margin. Based on cost savings on online music content and strict control over administrative and research and development expenses, the firm has raised its adjusted earnings per share forecasts for NetEase Cloud Music for the fiscal years 2025 and 2026 by 2% and 5% respectively, raising the target price from 200 Hong Kong dollars to 250 Hong Kong dollars, and reiterating a "high conviction of outperforming the market" rating.