Alibaba's Reduced Holdings in NetEase Cloud Music

TapTechNews July 10th news, the Hong Kong Stock Exchange document shows that Alibaba reduced its holdings in NetEase Cloud Music, and the shareholding ratio decreased from 7.0% to 5.19%.

In September 2019, Alibaba and Yunfeng Capital invested 700 million US dollars in NetEase Cloud Music. According to the subsequent prospectus disclosed by NetEase Cloud Music publicly, as of before the listing, Alibaba and Yunfeng Capital held 9.98% and 4.99% respectively, ranking as the second and third largest shareholders.

However, after NetEase Cloud Music was successfully listed in December 2021, Alibaba, as the major shareholder, began to reduce its equity in Cloud Music. In the second quarter of 2022, the equity held by Alibaba decreased from 9.98% to 9.91%, and in the subsequent three quarters, it would reduce the share by about 0.1% in almost every quarter. According to the document disclosed by the Hong Kong Stock Exchange on June 6 this year, Alibaba reduced its shareholding ratio in NetEase Cloud Music from 8.3% to 7.0%, which was the largest reduction ratio in recent years.

TapTechNews noted that in 2023, the total revenue of NetEase Cloud Music was 7.867 billion, a year-on-year decrease of 12.51%, which has been a continuous decline in growth rate for four consecutive years. In terms of profit margin, the gross profit margin and net profit margin of NetEase Cloud Music in 2023 were 26.73% and 9.33% respectively, far lower than 35.29% and 18.81% of Tencent Music.