Cloud Music Inc

09899: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$798.00	Nmxr	Xkljsmjk

Cloud Music Earnings: Major Margin Expansion Driven by Sales Leverage; Shares Undervalued

Ivan Su

Aug 23, 2024

Cloud Music’s first-half 2024 earnings beat our expectations, even as the company strategically scaled back some of its livestreaming services to manage potential regulatory risks. Although we now expect further decline in livestreaming revenue as the phase-out continues, this is offset by a significant improvement in margins in the first half. Overall, we maintain Cloud Music’s fair value at HKD 153. Shares are very undervalued, trading at 13 times our estimated earnings for 2024.

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