4Q25评论：提升投资以推动长期可持续发展

long-term sustainable growth 4Q25review:Stepping up investment to drive Target PriceUS$20.00(Previous TPUS$28.00)Up/Downside75.9%Current PriceUS$11.37 TMEreported 4Q25 results: total revenuegrewby16% YoY to RMB8.64bn,3%aheadof Bloomberg consensus estimate mainly due to the stronger-than-expected performance ofnon-subscription music businesses (+41% YoY); non-IFRS net incomeincreasedby9% YoY to RMB2.49bn,in line with consensusestimate.FY25 total revenue/non-IFRS net income was up by 16%/25% YoY toRMB32.90bn/9.59bn. Looking into FY26E, weforecasttotal revenue togrow by10% YoY, with music subscription/non-subscription revenue up by 6%/25% YoYrespectively.Managementexpectsmusic subscription revenue to face short-term pressure due to theintensivecompetition, and the company will step up China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Online musicbusinessmaintained strong momentum.Online musicrevenueincreased by 22%YoY to RMB7.10bn in 4Q25:1)musicsubscription revenue grew by13%YoY to RMB4.56bn (53% of totalrevenue),drivenby5%/8%YoYgrowthinthenumberofsubscribers/monthly ARPPU. The number of SVIP subscribers surpassed20mn byend-FY25, supporting solid ARRPU growth.2)Non-subscriptionmusicrevenue was up by 41% YoY to RMB2.53bn (29% of total revenue),mainlyattributable to the robust YoY growth of revenue from offline Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hkStock Data 1Q26 outlook.For 1Q26E, we forecast total revenue togrowby7% YoY toRMB7.90bn,supported by the growth of music subscription/non-subscription revenue (+6/26% YoY). We expectmusic subscription revenuegrowth to decelerate in 1Q26E due to the more intense competition. But weremainupbeat on the non-subscription music businesses like offline Increasing content and channel investment.OverallGPMimproved by1.1ppt YoY and 1.2ppt QoQ to 44.7% in 4Q25, mainly thanks to operatingleverage and disciplined cost control.Non-IFRS net margin was largelystable QoQ at 28.8% in 4Q25. Lookingahead, we expect non-IFRS netmargin to decline slightly by 0.5ppt YoY to 28.6% in FY26E, mainly due to Source: FactSet Business forecasts updateand valuation DCF valuation Our target priceofUS$20.0isbased on the DCF valuationmethodology(unchangedWACC of9.6% and terminal growth of3.0%). Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuerthat theanalyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subjectsecurities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report. Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and FuturesCommission) (1) have dealt in or traded inthe stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM Ratings BUY: Stock with potential return of over 15% over next 12monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12 monthsNOT RATED: Stock is not rated byCMBIGM OUTPERFORM:Industry expected to outperform therelevant broad market benchmark over next 12 monthsMARKET-PERFORM:Industry expected to perform in-line with the relevant broad market benchmark over next 12 monthsUNDERPERFORM:Industry expected to underperform the relevant broad market benchmark over next 12 months Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a whollyowned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) Important Disclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable for the purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.The value of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence o