NETEASE MUSIC (09899) saw its stock soar by 6.92% in intraday trading, as investors reacted positively to the company's recently released first half 2025 financial results and optimistic analyst projections. The stock's surge outpaced earlier reports of a 5% gain, reflecting growing investor confidence in the company's performance and future prospects.

According to China Merchants Securities International, NETEASE MUSIC's first-half performance exceeded expectations across key metrics. The company's online music service revenue reached RMB 2.97 billion, up 16% year-on-year and accounting for 78% of total revenue. Notably, the gross margin improved by 1.4 percentage points to 36.4%, surpassing market expectations of 34.1%. Core operating profit grew an impressive 35% year-on-year to RMB 905 million, 40% higher than market forecasts. The company also reported a strong financial position with net cash reserves of RMB 12.4 billion at the end of the period.

Looking ahead, analysts are optimistic about NETEASE MUSIC's growth trajectory. The firm expects the online music business to drive overall group revenue to positive year-on-year growth in the second half of 2025, with the online music segment projected to grow at 17% year-on-year. Huatai Securities highlighted the long-term potential of domestic music platforms, noting that they have not yet been fully valued compared to overseas peers. The brokerage firm pointed out opportunities for growth through optimizing user age structure and implementing fan economy strategies, which could activate the payment potential of highly engaged core users. Furthermore, NETEASE MUSIC's continued efforts to deepen upstream and downstream deployment are expected to result in superior profit ceilings compared to overseas platforms, making the current valuation appear cost-effective in comparison.