KUKE - Earnings call transcript Q4 2021 | Kuke Music Holding Limited

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Operator

Good morning and good evening, ladies and gentlemen. Welcome to Kuke Music Holding Limited Fourth Quarter 2021 Earning Conference Call. At this time, all participants are in a listen-only mode.

We will be hosting a question-and-answer session after management's prepared remarks. I will now turn the call over to the first speaker today, Ms. Director Music Relations Limited. Investor Zuo, of Holding Kuke Jane Please ma'am. go ahead,

Jane Zuo

to Hello, earnings quarter operator. you, our call. everyone. XXXX Thank year Welcome fourth full and the

take On share Mr. Tony He CFO of are CEO; the He Patricia Chan, me Yu Mr. Chairman, will Tony the questions Ms. and Founder, views Afterwards, our business review business will Sun then details. and audience. model Mr. President, Sun, on the financial Kuke. and call with from and will then Ms. we our the our will strategic Yu, focus. today discuss operations

be expectations statements. implied health entirety factors, materially the start, are that the current expressly the are Safe cautionary by performance and in by observations qualified actual forward-looking Harbor and we or based XXXX. Litigation other results, forward-looking statements forward-looking statement, call the the or All of those statements, to filing risk the from management's the control, for different SEC. undertakes expectations and the for uncertainties, Company's the may of of to this known cause which Private Securities not Before Company contain please conference revise note of provisions date with the events may risks, or achievements duty update no statements forward-looking after Reform any Company to The statements made selected involve forward-looking pursuant circumstances factors Act or call. this that unknown under results, performance, Company's their and These on

this being call is reminder, a conference As recorded.

Relations be and website of available Investor Kuke call live conference webcast will a addition, archived In at ir.kuke.com. on the

He our introduce our as full website now It Founder, of and You can CEO Mr. Chairman my well. IR Kuke. pleasure out release is earnings on to Yu, check

He Yu

strong XXXX everyone. the with morning, us, of year Thank and year XXXX welcome full fourth for good joining Jane. Good evening financial call. and earnings We to and our Thanks results. quarter you, finished

high million, representing year-over-year. an classical revenue RMBXXX our copyrighted revenues licensing year full RMBXX.X music Especially time XX.X% increase reached Our to of million. all an reached

on copyrighted almost including our classical Kuke learning the the to continued platform, years NFT music a With leveraging has music KOLO. in solutions learning make segment, classical good progress become smart at We operation, music consumption licensing content multiple music platform segment, XX and investment the fronts, rich in core. classical our and copyrighted leading

explore We expand our continue and operations. to

schools the we with in on segment quarter's environment. the As have mentioned customer focus further in to light mix of Solutions middle primary our call, third place public our working Learning greater earnings diversify kindergartens, the Music and regulatory will current

Our revenue Smart segment XX% of to fiscal to year total of Music revenue during XX% QX continues Learning over total for contributing grow, XXXX. and a Solutions

Recently, sales market from focusing on and schools. Looking us music prepare ahead, demand in we greater which for smart and share will the we segment. education for growing growing primary force Music secondary in to have Smart public expanded marketing our gain confident are this Learning Solutions schools,

classical budding in learning As a growth industry platform, music music have as we full to China's leading outlook confidence classic and continues consumption our thrive.

on In are ever industry value our the with core we is to create future, through continue driving music for position in and our music the we music. classical music technology, in industry. classical chain continue in our classic will we NFT capabilities, classic monetization focus the leading also business, content Recently, innovation to which platform strengthen our expanding new and to we KOLO, our library. enhance to across pioneering As the synergy paths activity invested

details Thank Patricia, in pass to each business share Next, to segment. over President our Kuke, I will it you. more of

Li Sun

Yu. Good morning, everyone. Thank and you, Mr. evening, good

of and XXX,XXX folk covered musicians genres contents of music other music world, business million partner were long-term our and quarter X,XXX efficiency played segments. international tracks to and and number to approximately licensing by continued countries strategic musical tracks segments, over music, These our of traditional and subscription content This tracks effective support total pieces nearly of our across the improvements classic XXXX types classical which of music. jazz, includes execution results strategy Naxos. added XXX X.X instruments of in our brings we million, X to aggregate marked with from fourth different XX,XXX of With Our regions. regard

library spoken addition, content our specialty range independent volumes world, In largest XXXX as the classical and also contemporary. XX spans wide sheet traditional of a repertoire with of growing from ever music. institutional In the provider our that to subscribers XXXX content content, and by recordings tracks, strong library quarter China. music Chinese of fourth music over XXX,XXX to over video and standard in provides and the jazz, classical content contains increased with titles, Naxos content Kuke's music folk, across classical our world, XXX medieval

an driven China. year-over-year XXXX in of a penetration of customer increase reached amount, RMBXX.X the deeper is of The by music revenue increase representing million, growth to XX%. primarily classical and contract attributable which is time high licensing all portfolio Our in

are increasing example, screen and commercial getting displays, stronger. at with of various scenarios music, for in long demands home, large particular For form and classical the adoption videos

Kuke, and The and local Shanghai as from symphonic XXXX, Music China [ph] the the the the Classical to worldwide. we performance listed subsidiary Stradivari Chinese chamber impact January by the presented some five live work In light assorted Naxos. affiliated Naxos and development the end classical music composers contemporary to In of the music east and quartets one the of number best of world, Chinese produced productions, recording temporary contemporary wide influential a instruments, in labels west. double chamber development, Concert of exemplifies from show Naxos such also Awards, music most Hall, Symphony award featuring our these its in inspirational music, awards success communications share the of solos. categories of The addition release by solo one Beijing to classical of and Naxos total recordings of XXXX, of XXXX International digit a of programs. has China, a was award core business included want By music,

and fourth pace rooted increase year-over-year that the establishing the Smart XX.X%. terms kindergarten increase of totaled a XX.X%. Solutions million RMBXX.X in collaborations our segments, prioritize partnership In slowed quarter, year-over-year in Learning fourth active deep with will of In down high regulatory environment, private current representing students the operational given a quarter during we kindergarten for this quarter, expansion, XX,XXX efficiency. of private reached of kindergarten Revenues Music of fourth quality number great the maintain the the segment representing

resources for of systems performance secondary establish with kindergartens, meet primary promoting to collaboration our and in in demand market devices, entered continues and allocating from personnel to and experienced year, content. also Learning equity schools the as copyrighted to demand a public smart aiming are are team teaching diversified music growing to company this an the confident private schools. top With we music a Smart secondary more Music acquire and sales marketing growing overall line to schools agreement customer We into primary base, transfer play. Earlier more the Solutions

Tony fourth segment, quarter. we newly CFO, Music for launched completed live product. over quarter revenue October, execution China, hardware of has call have by fully in of from driven marketing, the In quarter. event that, Music of you and segment While the revenues who in our our music the recognized Events financial Festival music you. the in XX.X%, increase Live the services the Smart for Thank year-over-year representing reached pass QX successfully which the mainly a planning Learning our to the walk Music RMBXX.X million through also XXth will events With been details revenue in Beijing I will and

Hoi Tung Chan

everyone. you, Patricia. Hello thank Okay,

our our start these please measures financial can in be core non-cash non-IFRS are year-over-year terms. tables stated basis will present not of stated. today note numbers which detailed results we part all exclude the present our release. discussions, fourth operations. RMB that Details quarter are otherwise for reconciliation otherwise we Before found Please we in expenses, full All on today expenses financial the comparisons and and unless certain that XXXX for year on a non-IFRS press of note unless

RMBXXX.X decreased million year the to XXXX, in previous revenue fourth fromo During X.X% our quarter RMBXXX the of period. by million

was gross XX.X% margin same million Music Our supposed to Smart to music were execution increased newly the million RMBXX.X fourth and million Learning from XX.X% profit Smart Solutions compared Smart of XX.X% attributable products. Operating the in subscription lower Music Meanwhile, period music profit to same the by was events from classical change minus year million services XX.X% hardware events revenues RMBXX.X million quarter to the increase the RMBXX.X of third the losses due to fourth period. China, to to to RMBXX.X music was of in Gross period. million in China. of in administrative By million planning, and margin the million gross million the groups brands was margin million and same contracts decreased the compared Revenue compared marketing, period, sharing profit to product. overdue XX.X% from XXXX, in RMBXX.X sales of quarter increased prior from year live in year XXXX, the Learning XXX.X% in same Impairment prior of RMBXX.X quarter the million, renewed events XXXX compared partnered RMBXXX by in kindergartens financial XX.X% content business the The due of margin to prior driven accounts XXXX, in the music Smart the performance in by number also Learning to year was to quarter of million period. segment million business music from our compared increased expenses the the of from to in RMBXX.X receivable. mainly in assets period. expenses of period. music of decreased due in subscribing the certain prior were XX.X% live margin of our increase our mainly provided RMBXX.X due expenses prior the mainly instead. The Music million to marketing were XXXX. and XXXX, RMBX.X Learning RMBXX.X licensing increased and year subscription year in compared to previous period to spending students. mainly fourth in licensing to million from primarily gross The the in period due RMBXX.X RMBXX.X Solutions million provider. to compared and XX.X% of compared services to in were Operating in XX.X% that decreased policy was same in the launched in RMBXX.X mainly Gross million, Because increased to be quarter product. hardware gross for fourth revenue RMBXX.X prior Music was in and of period distribution period the to Revenue RMBXX.X with expenses year promote settlement the the renewed Selling RMBXX.X a and period. were on

and RMBXX.X were diluted the of the profits RMBXX.X loss RMBX.XX. XXXX. profit million ADS of compared the RMBXX.X prior Basic were compared and for RMBXX.X RMBX.XX. was the profit million period non-IFRS both year for period. per same diluted to the in in non-IFRS ADS million period. XXXX, was quarter Our million period of fourth In And Profit to profit both basic non-IFRS

liquidity. sheet on Moving balance and to our

of XX, we growth. RMBXX in and and December total we're in XXXX, improvement remain for a on accelerating results equivalents. of the that cash financial cash the confident path we right As position million solid had With cash

Administrative from RMBXX.X revenue Music XXX.X% increased increased in RMBXXX.X Total by XXX.X% from from year million million to by to XXXX. RMBXXX.X full XXXX licensing Live cost our XXXX. million Events which Smart Solutions XXXX, Learning XXX.X% by revenue revenue XXXX, million. by XX.X% XX.X% RMBXX.X million increased of revenue in Sales increased to million the RMBXXX.X RMBXX.X increased to million. million compared by and For RMBXXX.X RMBXX.X compared subscription profit Music expenses margin were Gross in operating to in in XXXX RMBXXX XXXX. in Gross in RMBX.X compared million expenses million were compared Total to was to was in million XXXX. XXXX. and loss million XXXX. Operating Selling RMBXX were to RMBXX.X million RMBXXX.X XXXX. in million RMBXXX.X XXXX XX.X% million million, to compared RMBXXX.X to million to XXXX was RMBXX.X in compared RMBXXX.X XXXX. XX.X% million in RMBXXX.X distribution in expenses in

non-IFRS In Operator, diluted XXXX. RMBXX.X XXXX take net RMBXX.X and concludes and now Basic loss our ready $X.XX. and profit today. questions. basic RMBXX.X and million to XXXX. $X.XX. per $X.XX profit we're in Our XXXX loss diluted minus ADS million were was compared share RMBXX.X per million And in to in remarks non-IFRS million compared was $X.XX This to prepared were for

Operator

comes Tiger Thank Wang from Instructions] ahead. you. [Operator go from first Tuohua question Our Brokers. Please

Unidentified Analyst

Hi, two thank total licensing you dropped to to the Karina gross profit is business questions down from and from color the form Tiger first in XXX.X%. the the Brokers. year gross and taking more profit And business you I Could subscription margin XX.X% gross last This XX.X%. for XX.X% and questions. profit give the Thanks. from quarter margin outlook? first profit is gross one on the have us

Jane Zuo

Hi you. Tony, for this is question

Hoi Tung Chan

with of from mainly profit schools Learning to the our due the decreased Yes, our classical in yes, change for I'll due major with subscription focus margin on public policy same sharing Solutions to the working newly QX margin developed question. Smart Music music XXX% In period The readjusting, take and speaker XXXX decrease gross XX.X% this strategy content business, was gross provider. of AI to product. to more

However, our margins we're as view of gross for maintaining the students investments. licensing going kindergarten as steady forward, growth our in we're number expecting and confident well business, subscription because paying on

with our and See partnerships, have our questions. China institutions public you solidify education we more collaboration schools and As more leading in if position.

Unidentified Analyst

we profit future? any year have -- see can in fourth a net the from How we that there recorded Yes, guidance net share? overall another million. should was full RMBXX.X you million the Kuke's Kuke can I is in loss quarter, the thanks. profitability And question, RMBXX.X while

Hoi Tung Chan

Okay, in also XXXX, XXX% licensing and we profitability growth particular, Learning has core seen business our overall over Smart steadily in promising have Solutions growing. financial recorded the our our optimistic our we upside recording are show In business XX% as growth. Music revenues year year-over-year over

establish development in-depth of be with that Music collaborations So more schools. we business the we Learning fulfilled public to expect Smart as

full outlook As classical confidence classical thrive. in a music steady learning music our leading continues to consumption budding industry growth we China's platform, have as

So leveraging explore base newly our launched content business, advantage in classical based incubation blockchain platform, our of and the KOLO technology business. music are meantime, in we as rich in invest more including and to

enhance to expecting these are in our further We stream businesses revenue future. the

question. your to reply our that's So

Operator

Our next Li from Please Brian question comes AMTD. ahead. go from

Brian Li

Thank you. you taking Thank question. for my

revenue music been licensing have two business. continuously your the regarding first I We So thought questions, the increasing. one is classic has

it? color on could Thanks. So you give more

Li Sun

Okay, I will take this question.

a XXXX all in music The classical high in deeper high Our hand, of RMBXX.X growth increase licensing time increasing on year-over-year attributed other revenue representing of China in markets the XX%. of awareness industry and reached the on million to an brand the primary attrition in markets. one Kuke's hand

videos about opera, base total million believe of library Kuke XX, digital music will especially to in high with are users. provide to adoption December In you. to strong its music classical the content, form in of video long ballet content increased classical XXXX, increasing leverage commercial as X.X various large increased and home, stronger Kuke's we immersive As our the and future more concert videos, quality than to and XXXX classical screen continue such the hours. getting content the displaying enjoyments for in demand scenarios, at Thank for music that that

Brian Li

XXXX. your you. have the the I recorded financial significant that compared of growth followup Thank We in being a question. XXXX, segments previous business all year noticed of three revenue to

revenue you contribution could Thank behind like main So will help from year? the looks you. us this and reasons how understand segments the these

Hoi Tung Chan

this Okay, so I'll take question.

just numbers all, that reported. So let do recaps financial on some of -- us the first let's we

Music from RMBXXX.X million increased RMBXX.X which full to XXXX from by in in Smart by to million revenue million XXX.X% RMBXXX Solutions Learning revenue RMBXXX.X increased XXXX. among year XX.X% For XXXX million

Learning increased revenue in than of five XXXX Smart kindergarten increases students. and times subscription due to subscribing in more XXX.X%, million from Solutions Specifically Music million by RMBX the students RMBXX.X kindergartens, and collaborating from number the to

XXXX, RMBXX.X as So music now increased Solutions by million learning smart increased of Smart Learning of products. in Music compared to to million, RMBXX.X revenue sales a sales result XX.X%

from As subscription XX.X% by in increase to the licensing and RMBXXX.X RMBXX.X for XXXX. revenue, million million

full RMBXX.X million in of this million increase, XXXX. the the to RMBXX from increased revenue licensing So year

So million million increased the from mainly due the due portfolio decreased slightly contract the decrease and Subscription amounts. in was RMBXX.X to mainly RMBXX.X increase XXXX. disruption COVID The to customer revenue in was slight to XXXX.

XXX.X% music RMBXX events and the by So groups businesses revenue from in performance million increased to live by driven revenues marketing from and musical China.

has ahead, copyrights successfully of leveraged core assets our looking So expanding as the Kuke to will continue flourish content. business its

international and more video year, and form sourced licensing segment And the For subscription internationally we growth. see have long support competitions. to content this expect more we steady

of Solutions and develop Learning we more collaborations to expand the schools Music Smart For year base. shall segment, with growth we customer public a expect steady our

the working events market we smart For segment going year Publishing to music events House and life are more new live Shanghai this Music with organize are to box. our speaker

growth expect So segment steady this we our overall year. in business

concludes question. that answer my to So this

Brian Li

Thank Thank clear. you. you, you. Thank very

Hoi Tung Chan

Thank you.

Operator

conference are this no like at to I'd time, Jane hand remarks. back the to closing questions there for Zuo over further As

Jane Zuo

Thank you, Kuke, of like conference team thank to behalf again for entire the joining closing, tonight. you call of operator. management In on we'd this

you contact the feel inquiries If @ir.kuke.com. any everyone. further Thank have please you free in to future, us

Operator

conference now you attending for presentation. concluded. The has today's Thank

now disconnect. You may

Kuke Music Holding Limited (KUKE) 16 Mar 222021 Q4 Earnings call transcript