Tencent Music (1698)

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TME-SW Plunges 20% as Last Quarter's Mobile MAUs Miss

TME-SW (01698.HK) reported a net profit hike of 12.6% YoY to RMB2.2 billion for the last quarter, with a gross margin of 44.7%, less than the street consensus of 45.1%.

Besides, mobile monthly active users (MAUs) also fell short of expectations.

TENCENT MUSIC (TME.US) saw its US shares slide 24.7% at close on March 17, hitting a 52-week low.

This morning (18th), the Hong Kong stock price was similarly under pressure, opening 15% lower and tumbling as much as 24% in early trading, reaching a low of HKD43.6.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research>G Sachs: TME-SW (01698.HK) 2026 Growth Forecast Recalibrated; Rating Buy


Market concerns over intensified music competition in 2026, the potential medium- to long-term disruptive risks of AI to music streaming platforms and the management's relatively conservative outlook on recent subscription revenue.

Goldman Sachs organized the major market concerns and its views on the Company post-results, including:
1) the need to recalibrate growth expectations for the subscription business amid intensified competition;
2) discussions in the market about the potential impact of AI music on the entire music industry's value;
3) still stable profit margins despite the slowdown in subscription user growth.

Therefore, the broker rated TME-SW at Buy, with 12-month target prices for TME-SW's H-shares/ US stock of $69/ US$17.6.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research>CICC Chops TME-SW (01698.HK) TP by 33% to $67.5 on Slowdown in Subscription Biz

TME-SW (01698.HK) 's 4Q25 revenue was RMB8.641 billion, up 15.9% YoY, while non-IFRS net profit attributable to the parent company amounted to RMB2.485 billion, up 9% YoY, slightly below CICC's expectation of RMB2.528 billion, but generally in line with market consensus, mainly due to lower-than-expected interest income, according to CICC's research report.

Due to the slowdown in the subscription business, the broker lowered its 2026 non-IFRS net profit forecast by 3.5% to RMB10.37 billion, and introduced its 2027 forecast of RMB11.15 billion.

Related News - Nomura: TME-SW 1Q26/ FY26 Guidance Misses; Buy Rating Kept

Therefore, CICC kept rating at Outperform, and chopped its target prices for TME-SW's H-shares/ US stock by 33% to $67.5/ US$17.4, respectively.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Nomura Cuts Tencent Music Entertainment (TME.US) TP to USD12.5, Maintains Buy Rating

Nomura issued a research report reiterating its Buy rating on Tencent Music Entertainment (TME.US) listed in the US, and lowered its target price from USD26 to USD12.5.

The broker noted that Tencent Music Entertainment's share price has corrected sharply by 43% since the beginning of the year, significantly underperforming the China internet sector.

This mainly reflects management's 6% downward revision to subscription revenue guidance for fiscal year 2026 and a broader valuation de-rating due to competition concerns.

Nevertheless, Nomura believes the stock is currently trading at 10.5 times forecast price-to-earnings ratio for fiscal year 2026, representing a notable discount to the China internet peers average of 15 times, indicating that the valuation is not demanding.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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Tencent Music Entertainment Group Announces First Quarter 2026 Unaudited Financial Results

Total revenues were RMB7.90 billion (US$1.15 billion), representing a 7.3% year-over-year increase.

Adjusted EBITDA[3] was RMB2.83 billion (US$410 million), representing 10.5% year-over-year growth.

Source: PR Newswire

https://finance.yahoo.com/markets/stock ... 00702.html

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Tencent Music gets conditional approval for acquisition of Ximalaya

Adjusted net profit increased 7 percent to 2.27 billion yuan.

Its total revenues increased 7.3 percent to 7.9 billion yuan, primarily due to strong growth in revenues from music related services.

Revenues from music related services rose 12.2 percent to 6.51 billion yuan.

Revenues from social entertainment services and others decreased 11 percent to 1.38 billion yuan.

Source: The Standard

https://www.thestandard.com.hk/finance/article/331841/

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1Q26: Solid Earnings; Focusing On AI Disruptions And Peer Competition

TME delivered solid 1Q26 results with both the top-line and bottom line in line with our expectations.

Revenue grew 7.3% yoy to Rmb7.9b, in line with the street’s estimates.

Adjusted EBITDA increased 10.5% yoy to Rmb2.83b, with EBITDA margins dropping 6ppt to 35.8%.

Non-GAAP net profit rose 7.0% yoy to Rmb2.27b, in line with our and consensus expectation, with net margins shrinking 1ppt yoy to 30%.

Maintain BUY with a lower target price of HK$53.00 (US$14.00).

Source: UOBKH

https://research.uobkayhian.com/content ... w4B9UpODSB

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<Research> Citi Cuts Tencent Music Entertainment Group (TME.US) TP to USD13; 1Q26 Results In Line

Citi published a report stating that TME-SW (01698.HK) reported 1Q26 results broadly in line with expectations.

Total revenue and non-IFRS net profit increased by 7.3% YoY and 4.8% YoY to RMB7.9 billion and RMB2.33 billion, respectively, 0.6% and 0.1% above the broker's forecasts and 4.9% and 4% above market consensus.

The report noted that management remains cautious about intensifying competition and the disruptive impact of AI on the music streaming market.

Management highlighted that membership and advertising revenue growth will face pressure in the near term, mainly due to churn among less sticky and more price-sensitive casual users.

To strengthen its position, management is enhancing copyright protection, deepening integration within the Tencent ecosystem, and leveraging a differentiated IP-centric model.

Related News: TME-SW (01698.HK) 1Q26 Non-IFRS Net Profit Down 51.3% YoY; EPS Beats

The broker believes that the recent conditional approval by the State Administration for Market Regulation for the Ximalaya acquisition provides a positive catalyst for the company's long-term audio business expansion.

After revising its forecasts, Citi lowered the US share TP of Tencent Music Entertainment Group (TME.US) from USD15 to USD13 and maintained a Buy rating.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/analy ... stock-news

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CICC: TME-SW (01698.HK) Acquisition of Ximalaya Approved; Potential Competitive Landscape Shift Becomes Core Focus

CICC issued a research report stating that TME-SW (01698.HK)'s acquisition of Ximalaya has been approved, suggesting that under its low valuation, investors should pay attention to potential changes in the competitive landscape.

Considering that Ximalaya may be consolidated in 2H26 and that expense investment could increase, the broker lowered its 2026 Non-IFRS net profit forecast for TME-SW to RMB10.2 billion, down 1.6%, while raising its 2027 Non-IFRS net profit forecast by 2.8% to RMB11.5 billion.

CICC noted that TME-SW's 1Q results were broadly in line with expectations, with revenue and

Non-IFRS net profit reaching RMB7.895 billion and RMB2.273 billion respectively, both up 7% YoY.

Due to concerns over the competitive landscape, CICC cut its TP for TME-SW by 17.8% to HKD55.5;

The US stock TP for Tencent Music Entertainment Group (TME.US)was lowered to USD14.3. The Outperform rating on TME-SW was maintained.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

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<Research> BOCI Downgrades TME-SW (01698.HK) to Hold, TP Cut to HKD39

BOCI issued a report stating that TME-SW (01698.HK) delivered 1Q26 results broadly in line with expectations.

Despite approval of its acquisition, rising competition and accelerating AI development, have increased pressure, prompting the broker to downgrade the rating from Buy to Hold.

The report noted that TME-SW's total revenue and adjusted net profit in 1Q26 both grew 7% YoY, largely meeting market expectations.

Music revenue rose 12% YoY, of which music subscription revenue increased 6% YoY and music non-subscription revenue surged 28% YoY.

Related News: Citi Cuts Tencent Music Entertainment Group (TME.US) TP to USD13; 1Q26 Results In Line

The broker believes competition from Soda Music will intensify given its well-established closed-loop ecosystem.

Together with the accelerating penetration of AI and the trend toward decentralized music consumption, this is expected to structurally pressure the growth of TME-SW's core music subscription and advertising businesses.

BOCI added that although the merger with Ximalaya and the committed USD1 billion share buyback program to be completed between 2H26 and Mar 2027 are expected to provide valuation support, it cut the company's TP from HKD60.8 to HKD39 based on its 2026 forecast adjusted price-to-earnings ratio of 10x.

Source: AASTOCKS Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN