ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. NetEase Cloud Music's annualized return on capital (ROC %) for the quarter that ended in Dec. 2025 was 24.17%.
As of today (2026-07-02), NetEase Cloud Music's WACC % is 11.29%. NetEase Cloud Music's ROC % is 30.87% (calculated using TTM income statement data).
NetEase Cloud Music generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
NetEase Cloud Music (HKSE:09899) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, NetEase Cloud Music's WACC % is 11.29%. NetEase Cloud Music's ROC % is 30.87% (calculated using TTM income statement data).
NetEase Cloud Music generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
NetEase Cloud Music ROC % Related Terms
NetEase Cloud Music ROC % Historical Data
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The historical data trend for NetEase Cloud Music's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
NetEase Cloud Music (HKSE:09899) has a ROC % of 24.17% as of Dec. 2025. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on NetEase Cloud Music and its competitors.
Is NetEase Cloud Music's ROC % too high?
NetEase Cloud Music's current ROC % is 24.17%. The Interactive Media industry median ROC % is 1.89. NetEase Cloud Music's value of 24.17% is 1178.8% above this industry median. Overall, NetEase Cloud Music has a GF Score™ of 74/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does NetEase Cloud Music's ROC % compare to GOOGL and META?
NetEase Cloud Music's ROC % of 24.17% can be compared against companies in the Interactive Media industry. The industry median ROC % is 1.89. NetEase Cloud Music's value of 24.17% is 1178.8% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for an Interactive Media company?
The median ROC % among Interactive Media companies is 1.89, based on 559 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. NetEase Cloud Music's current ROC % of 24.17% is 1178.8% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on NetEase Cloud Music and its competitors. For the Interactive Media industry, the median ROC % is 1.89 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. NetEase Cloud Music's current ROC % is 24.17%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is NetEase Cloud Music stock overvalued right now?
Based on GuruFocus' analysis, NetEase Cloud Music (HKSE:09899) is currently considered Fairly Valued. The stock's GF Value™ is HK$106.81, compared to a current price of HK$108.40 — trading 1.5% above its estimated fair value. The current ROC % is 24.17% and 1178.8% above the Interactive Media industry median of 1.89. NetEase Cloud Music's overall GF Score™ is 74/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For NetEase Cloud Music (HKSE:09899), the current ROC % is 24.17% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is NetEase Cloud Music (HKSE:09899) Overvalued in 2026?
Based on GuruFocus' analysis, NetEase Cloud Music stock appears to be overvalued.
The current stock price of HK$108.40 is trading 1.5% above its estimated GF Value™ of HK$106.81.
GuruFocus considers NetEase Cloud Music to be Fairly Valued.
Key valuation signals for HKSE:09899:
ROC %: 24.17%
GF Value™: HK$106.81 vs. price of HK$108.40 (1.5% above fair value)
Industry Position: 1178.8% above the Interactive Media median
No single metric tells the full story. See the HKSE:09899 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
AddressNo. 353 Benjing Avenue, Room 1201, Block A, Hangzhou International Expo Center, Qianjiang Century City, Xiaoshan District, Zhejiang Province, Hangzhou, CHN
NetEase Cloud Music is China's second-largest music streaming platform, founded in 2013 as a subsidiary of NetEase. NetEase remains the controlling shareholder with a 59.4% stake. The company is headquartered in Hangzhou.The platform's business model revolves around a core music streaming service sold on a subscription basis, paired with a live streaming service where users purchase virtual items and gift them to performers.
74GF Score
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