NETEASE MUSIC (09899) stock is soaring 6.92% in Wednesday's trading session, building on its earlier 5% gain. The surge comes on the heels of the company's impressive first-half 2025 financial results, which exceeded market expectations.

According to China Merchants Securities International, NETEASE MUSIC's online music service revenue reached RMB 2.97 billion in the first half, up 16% year-on-year and accounting for 78% of total revenue. The company's gross margin improved by 1.4 percentage points to 36.4%, surpassing market expectations. Core operating profit grew 35% year-on-year to RMB 905 million, 40% higher than anticipated. Looking ahead, analysts expect the online music business to drive overall group revenue to positive year-on-year growth in the second half of 2025.

Huatai Securities highlighted NETEASE MUSIC's long-term potential, noting that domestic music platforms' quality asset attributes have not been fully priced in compared to overseas peers. The firm pointed out growth opportunities in increasing payment rates as user age structure optimizes and fan economy strategies activate payment potential among highly sticky core users. Additionally, NETEASE MUSIC's continuous efforts to deepen upstream and downstream deployment are expected to result in superior profit ceilings compared to overseas platforms, making current valuations appear cost-effective.