Thursday, February 04, 2021 6:47:14 PM
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
Recent KUKE News
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/24/2024 12:00:10 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/12/2024 01:00:02 PM
- KUKE Music Regains Compliance with NYSE Continued Listing Standards • GlobeNewswire Inc. • 09/12/2024 12:30:00 PM
- KUKE Music Successfully Develops "KUKE Music for Cars" Version, Aims to Complete Testing by End of September • GlobeNewswire Inc. • 09/11/2024 10:30:00 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/21/2024 01:00:02 PM
- Kuke Music Holding Limited to Hold Annual General Meeting and Class Meeting on September 20, 2024 • GlobeNewswire Inc. • 08/21/2024 12:30:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/01/2024 08:15:30 PM
- Kuke and Jidou Join Forces in the AI Music Market • GlobeNewswire Inc. • 06/14/2024 12:20:00 PM
- Kuke Music Makes Initial Steps into AI Music Field • PR Newswire (US) • 06/06/2024 01:16:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 05/24/2024 08:30:07 PM
- KUKE Announces Purchase Terms with Naxos One • GlobeNewswire Inc. • 05/24/2024 08:30:00 PM
- KUKE Enters Strategic Partnership with China National Youth Palace Association • PR Newswire (US) • 04/18/2024 02:30:00 PM
- Kuke Music Establishes R&D Center in Guangzhou • PR Newswire (US) • 03/14/2024 02:00:00 PM
- Enjoy Your Drive with Music • PR Newswire (US) • 02/22/2024 03:01:00 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 01/26/2024 10:10:04 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 01/26/2024 10:00:33 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 12/27/2023 09:05:13 PM
- Kuke Reports First Half of 2023 Unaudited Financial Results • GlobeNewswire Inc. • 12/27/2023 09:05:00 PM
- Naxos China Dedicated to promoting Chinese Local Music and Artists, Opening a New International Stage • GlobeNewswire Inc. • 09/29/2023 05:02:11 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/26/2023 01:25:51 PM
- Kuke Music Receives Continued Listing Standard Notice from the NYSE • GlobeNewswire Inc. • 09/26/2023 01:24:00 PM
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