18 March 2026 | 1:26AM HKT Equity Research Tencent Music Entertainment Group (TME) 4Q25 Earnings Review: Reset of growth expectations in 2026, Competition/AI the key debates; Lower TP, Buy | TME | 12m Price Target: $17.60 | Price: $15.09 | Upside: 16.6% | | --- | --- | --- | --- | | 1698.HK | 12m Price Target: HK$69.00 | Price: HK$57.20 | Upside: 20.6% | TME is sharply lower post 4Q25 results, mainly as the market is concerned with the rising music competition in 2026 and potential AI disruption to music st ...

2026年3月18日 CMB国际全球市场 | 股权研究 | 公司更新 TME（TME美国）- 2025年第四季度回顾： TME（TME美国） 4Q25评论：提升投资以推动长期可持续发展 TME報告25年第四季度結果：總收入同比增長16%至864億人民幣，比彭博預測高3%， 主要得益於非訂閱音樂業務表現超預期（同比增長41%）；非IFRS淨利潤同比增長9% 至249億人民幣，與預測相符。25年度總收入/非IFRS淨利潤同比增長16%/25%至3290 億人民幣/959億人民幣。展望26財年，我們預計總收入將同比增長10%，其中音樂訂閱/ 非訂閱收入分別增長6%/25%。管理層預計音樂訂閱收入將短期內面臨激烈競爭的壓力 ，公司將加大內容和市場營銷投資，以加強其競爭優勢。由於投資增加和競爭加劇，我 們將26-27財年收益預測調整4-10%，並降低長期現金流預測。將我們基於折現現金流方 法的目標價從原先的28.0美幣調低至20.0美幣。維持購買評級，考慮到當前吸引人的估 值和可持續的音樂業務增長前景。 在线音乐业务保持强劲势头。 在线音乐收入在2025年第四季度同比增长22%达到71 0亿元人民币：1）音乐订阅收入同 ...

Tencent Music Entertainment Group (NYSE:TME) reported a 15.9% year-on-year increase in total revenue for Q4 2025, driven by a 21.7% rise in online music services.Despite strong financial results, TME's share price dropped by more than 20% due to changes in the disclosure of user metrics.Macquarie analyst Ellie Jiang set a price target of $10.70 for TME, indicating a potential undervaluation by the market.Tencent Music Entertainment Group (NYSE:TME) is a leading online music entertainment platform in China, ...

Group 1 - Nvidia's CEO Jensen Huang stated a revenue expectation of over $1 trillion, indicating strong visibility, which only includes revenue from the Blackwell and Rubin product lines, excluding upcoming products and new markets. Nvidia plans to return 50% of its free cash flow to investors, with stock buybacks and dividends expected in the second half of the year [3] - Qualcomm announced a $20 billion stock buyback plan and raised its quarterly dividend from $0.89 to $0.92 per share, reflecting confidence in future performance. The company continues to advance in 5G and chip-related technology development, maintaining a robust supply chain in IoT and automotive electronics [3] - Micron Technology announced that its HBM4 production line will begin mass production in Q1 2026, with initial products designed for Nvidia's Vera Rubin platform, meeting high-end AI computing memory needs [4] Group 2 - Tesla signed a supply agreement with LG Energy to build a $4.3 billion lithium iron phosphate battery manufacturing plant in Lansing, Michigan, with production expected to start in 2027. CEO Elon Musk stated that any legal gains from the lawsuit against OpenAI will be donated to charity [4] - Alibaba launched the world's first enterprise-level AI-native work platform "Wukong," designed to enhance operational efficiency and support digital transformation across various industries, with pilot applications already underway [5] - Tencent Music reported Q4 revenue of 8.64 billion yuan, a 15.9% year-over-year increase, and a net profit of 2.2 billion yuan, up 12.6%. For the full year 2025, total revenue reached 32.9 billion yuan, a 15.8% increase, with net profit growing 66.4% [7] Group 3 - BYD is developing L4 autonomous vehicles based on the NVIDIA DRIVE Hyperion platform, leveraging Nvidia's computing power and technology to accelerate the development and production of high-level autonomous driving technology [7] - Pengding Holdings announced a 11 billion yuan investment for a high-end PCB production base, aiming to capture demand from AI technology development and enhance its market share in high-end printed circuit boards [8] - Baidu announced the launch of its first AI desktop assistant DUMate, which integrates various capabilities from its ecosystem, aiming to become a commonly used tool in daily work [8] Group 4 - Amazon's CEO predicts that AI will drive AWS cloud service sales to reach $600 billion by 2036, doubling previous expectations, and has partnered with OpenAI to sell AI-related products to U.S. government agencies [11] - Microsoft is restructuring its AI business, integrating commercial and consumer Copilot product lines, and slowing down the aggressive AI integration into Windows 11 [11] - Meta announced a $27 billion computing partnership with AI infrastructure provider Nebius to enhance its AI capabilities while scaling back its metaverse business [11]

Group 1 - The article highlights a breakthrough in AI research by a team led by a 17-year-old student, which has garnered attention from tech leaders including Elon Musk. The new architecture, "Attention Residuals," significantly improves training efficiency for large models [2] - Ant Group's chairman, Jing Xiandong, donated 130 million yuan to Shanghai Jiao Tong University to support the "AI Future Foundation" [4] - Xiaomi's founder, Lei Jun, addressed the impact of the early discontinuation of the first-generation SU7 model on sales, while also announcing a brand ambassador for Xiaomi Auto [6] Group 2 - Didi's AI ride-hailing assistant, Xiao Di, has launched its v1.0 version, supporting over 90 service tags and enhancing user experience in complex travel scenarios [10] - ByteDance's planned launch of its AI glasses has been delayed, with insiders indicating that the first-generation product is unlikely to be released due to a lack of market differentiation [12] - Tencent Music reported a total revenue of 32.9 billion yuan for the year, with a 15.8% year-on-year growth, and announced a cash dividend of approximately 368 million USD [13] Group 3 - OpenAI is preparing for an IPO, potentially by the end of this year, focusing on enterprise-level business [18] - Nvidia's CEO, Jensen Huang, discussed collaborations with Chinese automakers, emphasizing the unified architecture for sensors and computing platforms [12] - Audi's global CEO denied rumors of a merger between its two Chinese joint ventures, stating that the current partnership model is beneficial [19]

Core Viewpoint - Tencent Music Entertainment Group (TME) is a leading online music and audio entertainment platform in China, recognized for its diverse music services and strong market position, which drives growth and innovation in the competitive music streaming industry [1] Financial Performance - TME reported a 15.9% year-on-year increase in total revenue for Q4 2025, reaching RMB8.64 billion (approximately $1.24 billion) [3] - The growth was primarily driven by a 21.7% rise in online music services, contributing RMB7.10 billion (around $1.02 billion) [3] - Music subscriptions experienced a 13.2% growth, totaling RMB4.56 billion (about $653 million) [3] - Non-IFRS diluted earnings per ADS increased to RMB1.60 ($0.23), while IFRS diluted earnings per ADS rose to RMB1.41 ($0.20) [4] Stock Performance - Following the Q4 2025 earnings call, TME's stock price was recorded at $11.37, reflecting a 24.65% decrease [2][5] - The stock has fluctuated between $11.33 and $13 during the trading day, with a market cap of $17.43 billion [5] - Over the past year, TME's stock reached a high of $26.70 and a low of $11.33 [5] Strategic Direction - CEO Ross Liang emphasized the importance of AI-driven initiatives and user-centric strategies for the company's ongoing success [4]

Group 1 - The Chinese government has launched a new batch of 13 major foreign investment projects with a planned investment of $13.4 billion, focusing on manufacturing sectors such as electronics, chemicals, automotive, and machinery [2] - The new projects include logistics and biopharmaceutical R&D centers, signaling increased support for the service industry and the integration of modern services with advanced manufacturing [2] - The investment sources are diversified, including multinational companies from the UK, Germany, Switzerland, Sweden, and Turkey [2] Group 2 - The China Securities Regulatory Commission has approved a new batch of 15 hard technology-themed fund products, focusing on core technology and strategic emerging industries [3] - These funds will track indices related to artificial intelligence and China's strategic emerging industries, with plans to start fundraising soon [3] Group 3 - Nvidia's CEO announced at the GTC conference that the AI inference market has reached a turning point, with exponential growth in demand for inference computing power [4] - Nvidia plans to collaborate with a startup focused on inference technology to launch AI server systems, targeting the trillion-level computing market [4] - Huawei introduced new AI data infrastructure aimed at enhancing AI inference efficiency and reducing deployment barriers, with significant improvements in accuracy and utilization rates [4] Group 4 - Tencent Music's stock dropped by 24.65% after reporting a gross margin of 44.7%, below market expectations of 45.1%, and lower-than-expected active user numbers [7] - The company reported total revenue of 8.64 billion yuan for the fourth quarter, a year-on-year increase of 15.9% [7] Group 5 - The U.S. stock market saw slight gains, with the S&P 500 up 0.25%, the Nasdaq up 0.47%, and the Dow Jones up 0.10% [5] - Major tech stocks showed mixed performance, with Tesla, Amazon, and Google all rising, while Nvidia and other tech stocks experienced declines [6]

Group 1 - The National Development and Reform Commission is organizing the application for approximately 100 major application scenario projects, which will be prioritized for funding support [4] - The Ministry of Finance will continue to implement a more proactive fiscal policy in 2026, focusing on seven key areas including supporting the construction of a strong domestic market and promoting green transformation [7] - The State-owned Assets Supervision and Administration Commission emphasizes the implementation of major projects and the promotion of AI initiatives to accelerate the digital transformation of state-owned enterprises [7] Group 2 - The A-share market experienced a pullback, with the ChiNext index dropping over 2%, particularly in the computing power sector [9] - The China Securities Regulatory Commission has approved a new batch of 15 hard technology-themed funds, which are expected to launch fundraising soon [9] - The Hong Kong Stock Exchange is rumored to limit IPOs for red-chip companies, but local investment bankers have dismissed these rumors as unfounded [9] Group 3 - The North American stock indices showed slight gains, with the Dow Jones up 0.1% and the S&P 500 up 0.25%, while the Nasdaq increased by 0.47% [20] - The European stock indices closed higher, with the German DAX rising by 0.71% and the UK FTSE 100 increasing by 0.83% [20] - The Korean Composite Index rose by 1.63%, while the Japanese Nikkei 225 index fell by 0.09% [20] Group 4 - The Ministry of Health and the National Health Commission announced a focus on improving the standard treatment rates for acute cerebrovascular diseases by 2026 [7] - The Beidou satellite navigation system is set to undergo in-orbit upgrades to enhance service quality, with 50 satellites currently operational [13] - The real estate market in major cities is showing signs of recovery, with Shanghai's second-hand housing market expected to reach high transaction volumes [13]

Tencent Music Entertainment Group (NYSE:TME), a China-focused online music and karaoke platform, closed Tuesday at $11.37, down 24.65%. The stock fell after fiscal Q4 2025 results showed a revenue beat and subscriber growth, but an EPS miss, shrinking free users, and fresh analyst downgrades. Investors are watching how the new user-metric disclosures affect confidence in future growth. Trading volume reached 63.9 million shares, coming in about 823% above its three-month average of 6.9 million shares. Tence ...

Core Insights - Tencent Music Entertainment Group reported solid revenue growth in Q4, but a decline in its user base overshadowed the results, leading to a significant drop in stock price [1][5]. Financial Performance - Revenue for the quarter increased by 15.9% to $1.24 billion [4]. - Adjusted earnings per share rose from $0.21 to $0.23, aligning with market estimates [4]. - Revenue from music subscriptions grew by 13% to $653 million, while revenue from other music services surged by 41% to $363 million [4]. User Metrics - Monthly active users (MAUs) decreased by 5% to 528 million, despite a 5.3% increase in paying users to 127.4 million [5]. - The decline in MAUs is attributed to competition from short-form video platforms like ByteDance's Douyin and Qishui Music, indicating potential challenges in Tencent Music's growth pipeline [5]. Strategic Developments - The super VIP user base exceeded 20 million, and average revenue per paying user increased by 7% to 11.9 RMB [6]. - The CEO mentioned progress with a newly launched ad-supported subscription plan aimed at broadening user access and attracting new audiences [6]. Market Outlook - There is uncertainty regarding Tencent's future expectations, as Chinese companies typically do not provide guidance [6]. - The market dynamics may be shifting towards a bifurcation between free and paid tiers, raising questions about Tencent's market share [7].