HK Stock Market Move | CLOUD MUSIC (09899) rose by over 6% with an increase in gross profit margin driving improvement in profitability. The company is a scarce online music target for the Hong Kong Stock Connect.

CLOUD MUSIC (09899) rose by more than 6%, as of the cut-off time, it increased by 6.21% to HK$100.9, with a turnover of HK$6.1 billion. On the news front, in the first half of this year, CLOUD MUSIC achieved a revenue of about 4.07 billion yuan, a year-on-year increase of 4.1%; gross profit of about 1.426 billion yuan, a year-on-year increase of 47.7%; adjusted net profit of about 881 million yuan, a year-on-year increase of 165.4%; net profit attributable to equity holders of the company of about 810 million yuan, a year-on-year increase of 175.69%. Among them, online music service revenue increased by 26.6% year-on-year to 2.56 billion yuan, and membership subscription sales revenue increased to 2.144 billion yuan. Shenwan Hongyuan Group pointed out that on September 10, CLOUD MUSIC was included in the Hong Kong Stock Connect list. Online music, as a small luxury consumption, has proven its counter-cyclical ability, demonstrating good prospects. The dominant position of online music (Tencent Music, CLOUD MUSIC) is clear and stable. Since TME (Tencent Music) is not included in the Hong Kong Stock Connect, CLOUD MUSIC is a rare choice for domestic institutions in the music sector. Open-source securities stated that they are optimistic about the company's profit improvement driven by the increase in gross profit margin. The expansion of label music libraries, independent music libraries, and diversified content such as long audio are expected to drive the company's long-term growth.