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Kuke Music Holding (KUKE) operates in a growing

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Kuke to Report Third Quarter 2021 Financial Results on November 29, 2021 PR Newswire (US) - 10/13/2021 5:00:00 PM
Kuke Announces Commencement of 24th Beijing Music Festival PR Newswire (US) - 10/8/2021 9:20:00 AM
Kuke Music reports Q2 results Seeking Alpha - 8/4/2021 6:44:54 AM
Kuke Reports Second Quarter 2021 Unaudited Financial Results PR Newswire (US) - 8/4/2021 6:30:00 AM
Kuke scale 14% on strategic agreement with People's Music Publishing House Seeking Alpha - 7/23/2021 8:56:22 AM
Kuke Announces Strategic Cooperation Agreement with People's Music Publishing House PR Newswire (US) - 7/23/2021 8:45:00 AM
Kuke Music to Report Second Quarter 2021 Financial Results on August 4, 2021 PR Newswire (US) - 7/1/2021 6:10:00 AM
Kuke Music announces up to $1M share buyback plan Seeking Alpha - 6/29/2021 6:38:27 AM
Kuke Music Announces Share Repurchase Plan by the Company PR Newswire (US) - 6/29/2021 6:00:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 6/28/2021 4:26:14 PM
Kuke Music Announces Inclusion of KUKEY Lessons in China's Pre-School Music Education Curriculum PR Newswire (US) - 6/24/2021 6:00:00 AM
Securities Registration: Employee Benefit Plan (s-8) Edgar (US Regulatory) - 6/10/2021 4:29:47 PM
Kuke Music reports Q1 results Seeking Alpha - 5/20/2021 4:44:41 PM
Kuke Music Holding Limited Reports First Quarter 2021 Unaudited Financial Results PR Newswire (US) - 5/20/2021 4:30:00 PM
Deutsche Bank's Depositary Receipts Virtual Investor Conference PR Newswire (Canada) - 5/17/2021 8:35:00 AM
Kuke Music Holding Limited to Report First Quarter 2021 Financial Results on May 20, 2021 PR Newswire (US) - 5/14/2021 8:00:00 AM
Kuke Music Holding Limited to present at the dbVIC - Deutsche Bank ADR Virtual Investor Conference on 12 May 2021 PR Newswire (US) - 5/10/2021 8:35:00 AM
Deutsche Bank's Depositary Receipts Virtual Investor Conference to be held May 11 and 12, 2021 PR Newswire (Canada) - 5/7/2021 8:35:00 AM
Deutsche Bank's Depositary Receipts Virtual Investor Conference to be held May 11 and 12, 2021 PR Newswire (US) - 5/7/2021 8:35:00 AM
Kuke Filed 2020 Annual Report on Form 20-F PR Newswire (US) - 4/30/2021
Kuke Music reports Q4 results Seeking Alpha - 4/15/2021 11:49:16 PM
Kuke Music Holding Limited Reports Fourth Quarter and Full Year 2020 Unaudited Financial Results PR Newswire (US) - 4/15/2021 6:35:00 PM
Kuke Music Holding Limited to Report Fourth Quarter and Full Year 2020 Financial Results on April 15, 2021 PR Newswire (US) - 4/9/2021 5:00:00 PM
JohnQQ   Thursday, 02/04/21 06:47:14 PM
Re: None
Post # of 2 
Kuke Music Holding (KUKE) operates in a growing market and shows significant gross profit margin. There are several risks that investors need to understand. The company has one large supplier, which I don’t appreciate. I also believe that the recent acquisition made by KUKE was too expensive. Hence, in my opinion, this is a company that only institutional investors will study. In my view, KUKE will most likely trade with a total valuation of $74-$300 million. I would buy if the market capitalization crosses the $74 million mark.


https://stockmarketrevolution.com/archives/15254

Business

Kuke Music Holding offers classical music licensing and subscription in China. According to Frost & Sullivan, the company is one of the largest classical music subscription providers in China. Taking into account only this fact, I think that the company will be very interesting for institutional investors:

Powered by our rich and diverse content offerings, we were the largest classical music licensing service provider and the second largest online classical music subscription service provider in China in 2019, according to Frost & Sullivan, representing 46.6% and 13.8%, respectively, of the market share in terms of revenue.

Kuke Music Holding appears to be having good relationships with some of the most well-known music labels in the world. We are talking about Naxos, which helped Kuke create what appears to be the largest library of classical music content in China. The company owns exclusive rights of over 1.8 million music tracks.

The number of Kuke’s clients also appears very overwhelming. As of September 30, 2020, the company reported 743 743 institutional subscribers with 444 universities in China.

With regards to Kuke’s target market, the company is operating in a growing industry. The global music streaming market was valued at USD 20.9 billion in 2019, and is expected to increase at a CAGR of 17.8% from 2020 to 2027.

If we talk about the market in China, the numbers are also beneficial. Digital music is expected to show a growth rate of 12.3% CAGR from 2020 to 2025. I would expect the company’s sales growth to be close to this figure.

Specifically, the classical music market in China is expected to grow at a CAGR of 9.3% from 2020 to 2025. If the company performs better than the market, Kuke could be delivering sales growth of more than 9.3% y/y. However, I don’t believe that most investors will expect Kuke to do much more than that. Notice that the company did not deliver organic sales growth in 2019.

Its market size, as measured by total revenue generated from classical music licensing, paid subscription of online classical music subscription service providers and box office receipts of classical music performances, grew from RMB1,040.4 million in 2015 to RMB1,738.4 million in 2019, at a CAGR of 13.7%, and is expected to reach RMB2,396.6 million by 2025, at a CAGR of 9.3% from 2020 to 2025. Source: Prospectus

Large Gross Profit Margin

Kuke does not report sales growth, but it does report massive gross profit margin. In 2019, the gross profit margin was equal to 66%, which is quite large as compared to other companies. The gross profit margin of Spotify (SPOT) is close to 21%.

As far as the balance sheet is concerned, in 2020, Kuke enhanced its financial shape quite a bit. The total amount of assets increased by 56% in the 9M 2020. At the same time, total liabilities decreased by 14%. With that, certain shareholders may not appreciate the transactions that generated such impressive financial gain.


https://stockmarketrevolution.com/archives/15254

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