Everbright’s New Economy Fund Invests in NetEase Cloud Music, Positive Vibe for Streaming Music in China

13 November, 2018 - China Everbright Limited ("Everbright", stock code:  165.HK) announced today that its New Economy Fund has closed an investment into the leading music streaming platform, NetEase Cloud Music. Other investors of this round include Baidu, General Atlantic, Boyu Capital, etc. After investing in NetEase Cloud Music, Everbright has developed a strong investment portfolio in the New Economy sector.

Everbright stated that, “One of our most important missions is to identify and support enterprises with sustainably high growth in the New Economy. The cultural industry in China is an area that we believe has considerable potential for development and is an important area for our investment strategy. With the improvement of intellectual property (IP) protection law and policy, increasing awareness of and consideration for the IP rights of owners as well as a change in mentality with regard to the consumer’s willingness to pay for music, Everbright sees significant growth potential for the online music industry in China. NetEase Cloud Music, having become one of the most popular music streaming platforms in China with its leading smart technology, customised playlist recommendations, strong interactive social networking attributes and differentiated product experience, is poised to take advantage of this new wave of growth. Furthermore, Everbright recognizes and appreciates NetEase Cloud Music’s genuine commitment to the industry as it actively supports the development of new Chinese musicians and music. This is important not only for the culture of music but also its commerce. Everbright have been focused on discovering, investing in and supporting disruptive technology that allows industry to operate more efficiently and attractively and we find that NetEase Cloud Music embraces the same bold mission in the music space. Everbright is proud to contribute to and team with NetEase Cloud Music to explore ways to add value and grow the music market in China.”

Launched in April 2013, NetEase Cloud Music is now widely recognised as one of the industry’s largest players, with more than 600 million registered users, adding 200 million users alone over the last twelve months. With a focus on delivering a differentiated and premium user experience, NetEase Cloud Music has been praised for providing precise, personalised recommendations and promoting user interaction.

After just over five years of operation, this platform has created a community for genuine music lovers and independent musicians. As a result, NetEase Cloud Music now becomes one of China’s most active music platforms, with a market leading user retention rate and user time spent on the platform as well as one of the largest catalogs of user-generated content. NetEase actively supports original musicians and fosters the growth of independent music on the platform. Today, over 70,000 independent musicians have uploaded over 1.2 million songs to the platform.

China’s recorded music market is a blue ocean and expected to expand considerably. The potential is great because, according to iResearch, the U.S. music market is 45 times of that in Chinain 2017, and China’s per capita spending on recorded music is projected to quadruple from 2017 to 2023. Revenue from the music industry in China is projected to reach RMB376 billion in 2018, affording China’s digital music market tremendous potential for continued growth as younger generations embrace the convenience of streaming music services and online music becomes a way of life.

Everbright entered the business of private equity investment for the new economy in 2016 and has since become an important player in the industry. It has completed over 60 deals in the past 3 years, leading 30 of them while being granted, across the portfolio, about 40 board seats. 20 of these companies have a valuation of over USD1 billion and 10 have been listed publicly in the stock market or been acquired by listed companies. Our current AUM is RMB30 billion. Everbright’s track record in the new economy is strong. For example, Everbright invested in iQiyi (NASDAQ: IQ) because of the view that the platform had mastered the capacity to apply AI to the media and entertainment industry in such a way as to attract and keep watchers. Likewise, the pioneering headphone company i.am+ with its Buttons product has brought innovation to a conventional industry through the integration of technology, fashion and music. Everbright views NetEase Cloud Music as an innovative visionary in the same vein as its other core new economy investments. In particular, NetEase Cloud Music uses technology to facilitate access to music that its consumers want to hear as well as the development of a new and dynamic musical social interactive community. Everbright’s other new economy investments also seek to disrupt and invigorate other industrial segments including the retail market (Wish, Meituan-Dianping and Miss Fresh); the automobile market (i.e., NIO (NYSE: NIO), Xiaopeng Motor and CiDi); the IOT market (i.e. Terminus); the financial market (i.e. Mashang Finance and Circle); and the logistics market (i.e. JD Logistics).