Core Viewpoint - Tencent Music (NYSE: TME) continues to show a trend of fundamental divergence, with strong growth in online music services offset by weakness in social entertainment, leading to a cautious outlook on the stock [1] Group 1: Financial Performance - Music subscription revenue increased by 18% year-on-year to RMB 4.03 billion, driven by a 13% growth in paid user numbers and gradual ARPU improvement [2] - Social entertainment revenue declined by 13% year-on-year to RMB 1.6 billion due to adjustments in live interaction features and stricter compliance procedures [2] - Projected revenue for 2026 is expected to reach RMB 29.33 billion, with a target multiple of 5.0x, resulting in an implied value of approximately USD 13 per share, reflecting a 10% downside from current levels [5][6] Group 2: User Engagement and Content Strategy - Tencent Music is enhancing platform stickiness to support future ARPU growth, expanding its content library through partnerships with SM Entertainment and Kakao Entertainment [3] - The company is investing in application optimization and AI-driven recommendations, resulting in a 10% increase in user playlists and improved sound quality [3] - SVIP membership numbers are steadily increasing, with enhanced features like high-definition online concerts and an expanded digital library attracting more users [3][4] Group 3: Market Outlook and Valuation - Given the structural decline in social entertainment, Tencent Music's valuation should be based solely on its music subscription and advertising business [4] - Future growth expectations include an 11% CAGR in paid users and a 5% CAGR in ARPU over the next two years, with advertising revenue expected to grow at a 15% CAGR [4][6] - The company is also exploring partnerships for in-car music services, which could drive user growth as the automotive market shifts towards high-tech electric vehicles [4]

起底"外挂刷歌"利益链！轻松月入过万？有人三天 被骗30万元 全文共2810字，阅读大约需要5分钟 "我们只需要用大量的小号去给自己的音乐人歌单刷播放次数，每月就能轻松收获5000元。" 北京商报记者丨卢扬 程靓 日前，网易云音乐官方微博发文打击"听歌外挂"行为，并针对找"代练"自动刷歌的1万+账号进行了治 理。 对此，北京商报记者调查发现，"听歌外挂"行为背后隐藏着一条"音乐人计划"利益链。在小红书、闲鱼 等多个电商平台上，存在大量"外挂"课程、"代挂"服务以获取平台推出的"音乐人计划"中的播放量激励 收益，相关课程价格在1分钱到上万元不等。 "2025抖音汽水音乐人计划，新风口项目，每天简单操作半小时，小白无脑月入10000+……"在某电商平 台上，有商家介绍，目前"听歌外挂"属于蓝海市场，只需要花1分钱，就能获得详细教程进行学习，从 而获取收益。 以闲鱼为例，北京商报记者搜索"音乐人挂机"关键词，在一天以内发布相关商品的商家就超过100个， 包括网易云音乐、腾讯音乐、抖音汽水音乐等"听歌外挂"服务。其中，一个标注"网易云云梯计划一天 能挣500+，有执行力的来"宣传的商品下方已有98人表示想要。 但当北 ...

Core Insights - Tencent Music Entertainment Group (TME) reported a better-than-expected earnings report, leading to a nearly 12% increase in stock price [1] Financial Performance - Total revenue for the fourth quarter reached 7.46 billion yuan ($1.03 billion), an increase of over 8% compared to the same period in 2023 [2] - Music subscriptions contributed significantly, rising 18% to 4.03 billion yuan ($557 million), supported by a 13% increase in paying users [2] - Profit according to IFRS standards grew to nearly 2.08 billion yuan ($287 million) from 1.41 billion yuan ($195 million) year-over-year [3] - Earnings per American depositary share (ADS) were reported at 1.26 yuan ($0.17) [3] Analyst Expectations - Tencent Music exceeded analyst estimates, with expectations of 7.30 billion yuan ($1 billion) in revenue and 1.22 yuan ($0.17) per ADS for IFRS net income [4] Strategic Initiatives - The executive chairman highlighted that Tencent's initiatives across the music value chain have reshaped the industry landscape, enhancing subscriber penetration and lifetime value [5]

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME) with a current price of $15.09 and a fair value of $16.36 [9][40]. Core Insights - The report highlights that Tencent Music's profit performance exceeded expectations, balancing membership growth and ARPU (Average Revenue Per User) [3][9]. - The company is expected to continue enhancing its SVIP (Super VIP) membership scale and ARPU, leading to steady revenue growth [9][34]. - The online music revenue for Q4 2024 was reported at 58.31 billion RMB, showing a year-over-year increase of 16% [9][34]. Financial Performance Summary - **Revenue Forecast**: - 2023A: 27,752 million RMB - 2024A: 28,401 million RMB (growth rate: 2.3%) - 2025E: 30,973 million RMB (growth rate: 9.1%) - 2026E: 35,313 million RMB (growth rate: 14.0%) - 2027E: 38,160 million RMB (growth rate: 8.1%) [4] - **Net Profit Forecast**: - 2023A: 5,923 million RMB - 2024A: 7,671 million RMB (growth rate: 29.5%) - 2025E: 8,699 million RMB (growth rate: 13.4%) - 2026E: 10,359 million RMB (growth rate: 19.1%) - 2027E: 11,645 million RMB (growth rate: 12.4%) [4] - **EPS and Valuation Ratios**: - EPS for 2025E is projected at 5.58 RMB, with a P/E ratio of 21.60 [4]. - The report anticipates a continuous improvement in gross margin, reaching 45.1% and 47.4% in 2025 and 2026, respectively [35]. Business Segment Performance - **Online Music Business**: - Expected to generate revenues of 252.31 billion RMB and 298.59 billion RMB in 2025 and 2026, respectively, with growth rates of 16% and 18% [34]. - The net profit margin for the online music segment is projected to be 27% and 29% for 2025 and 2026 [36]. - **Social Entertainment Business**: - Revenue is expected to decline, with projections of 57.42 billion RMB and 54.55 billion RMB for 2025 and 2026, reflecting a year-over-year decrease of 14% and 5% [34][36]. Valuation Analysis - The fair value of Tencent Music is calculated at $16.36 per ADS, based on a segmented valuation approach [40]. - The online music business is valued at 28x P/E, while the social entertainment business is valued at 9x P/E [41].

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.US/1698.HK) and raises the target price to $18 or HKD 70, indicating a potential upside of 19% from the current price of $15.09 [3][5]. Core Insights - Tencent Music's Q4 2024 revenue reached RMB 74.6 billion, a year-on-year increase of 8.2%, surpassing market expectations by 2.4%, primarily driven by better-than-expected social entertainment service revenue [1]. - The adjusted net profit for Q4 2024 was RMB 22.8 billion, exceeding market expectations of RMB 19.4 billion, attributed to improved gross profit and optimized operating expenses [1]. - The online music service revenue grew by 16.1% year-on-year in Q4 2024, supported by subscription and advertising revenue growth [2]. - The report forecasts continued growth in subscription revenue, with an expected ARPU increase to nearly RMB 12 by Q4 2025 [2]. - Social entertainment service revenue showed a sequential recovery, with a 6.0% increase quarter-on-quarter, although it still faced a year-on-year decline of 13.0% [2]. Financial Projections - The report projects the following financial metrics for Tencent Music: - FY24 revenue: RMB 28,401 million - FY25E revenue: RMB 30,817 million - FY26E revenue: RMB 34,176 million - FY27E revenue: RMB 37,711 million - Adjusted net profit for FY25E: RMB 8,627 million [4][10]. - The adjusted net profit margin is expected to improve, with FY25E and FY26E adjusted net profit margins projected at 28.0% and 28.5%, respectively [10].

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.N) [5] Core Insights - The company reported Q4 2024 revenue of 7.46 billion RMB, exceeding Bloomberg consensus expectations of 7.29 billion RMB, with a year-over-year growth of 8.2% [1] - The adjusted net profit for Q4 2024 reached 2.4 billion RMB, reflecting a year-over-year increase of 43.0% [1] - The music subscription business showed high-quality growth, with online music revenue of 5.83 billion RMB, up 16.1% year-over-year, driven by strong subscription and advertising revenue [2] Summary by Sections Financial Performance - Q4 2024 gross profit was 3.25 billion RMB, with a gross margin of 43.6%, up 5.3 percentage points year-over-year [3] - The company announced a cash dividend of 273 million USD and a new buyback plan of 1 billion USD [1] Revenue Breakdown - Membership subscription revenue reached 4.03 billion RMB, growing 18.0% year-over-year, with a total of 121 million paying users [2] - Social entertainment revenue was 1.63 billion RMB, down 13.0% year-over-year, but showed signs of stabilization [2] Profitability and Cost Management - Operating profit for Q4 2024 was 2.41 billion RMB, a 40.5% increase year-over-year [3] - Operating expenses decreased by 7.3% year-over-year to 1.17 billion RMB, primarily due to reduced personnel costs [3] Future Outlook - The company expects revenue growth to improve in 2025, with adjusted net profit forecasts raised to 8.98 billion RMB for 2025 and 10.44 billion RMB for 2026 [3] - The report highlights the solid competitive barriers and potential for profit release due to scale effects [3]

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME US) with a target price raised to $17.00, indicating a potential upside of 12.7% from the current price of $15.09 [2][16]. Core Insights - The report highlights that Tencent Music's Q4 profits exceeded expectations, with a revenue of 74.6 billion RMB, aligning with market forecasts. The growth in music subscription revenue was robust, with a year-on-year increase of 18% and a total of 121 million music members, reflecting a net increase of 2 million members quarter-on-quarter [6][11]. - The adjusted net profit for Q4 was 22.8 billion RMB, a 45% year-on-year increase, surpassing market expectations by 18%, primarily due to improved gross margins [6][11]. - The long-term targets for online music remain unchanged, aiming for 150 million members with an average revenue per paying user (ARPPU) of 15 RMB [2][6]. Financial Forecasts - Revenue projections for 2025 are set at 30,930 million RMB, reflecting a 1% increase from previous estimates. The online music segment is expected to generate 25,313 million RMB, a 2% increase [3][12]. - The adjusted operating profit for 2025 is forecasted to be 9,845 million RMB, an 8% increase from prior estimates, with an adjusted operating profit margin of 31.8% [3][12]. - The adjusted net profit for 2025 is projected at 8,611 million RMB, a 5% increase from previous forecasts, with an adjusted net profit margin of 27.8% [3][12]. Share Performance - The stock has shown a year-to-date increase of 32.95%, with a 52-week high of $15.49 and a low of $9.46, indicating strong market performance [5][6]. Membership and Revenue Growth - The report notes that the monthly ARPPU for music subscriptions increased to 11.1 RMB, with a year-on-year growth of 4% and a quarter-on-quarter growth of 3% [6][11]. - Non-member revenue also saw a year-on-year increase of 12%, driven by diversified advertising [6][11]. Shareholder Returns - Tencent Music has announced a new $1 billion share repurchase plan and continues to maintain a dividend payout ratio of 26%, with a dividend yield of 1.2% [2][6].

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.N) [5] Core Insights - The company reported Q4 2024 revenue of 7.46 billion RMB, exceeding Bloomberg consensus expectations of 7.29 billion RMB, with a year-over-year growth of 8.2% [1] - The adjusted net profit for Q4 2024 reached 2.40 billion RMB, representing a year-over-year increase of 43.0% [1] - The music subscription business showed high-quality growth, with online music revenue of 5.83 billion RMB, up 16.1% year-over-year, driven by strong growth in subscription and advertising revenues [2] - The company announced a cash dividend of 273 million USD and a new share buyback plan amounting to 1 billion USD [1] Summary by Sections Financial Performance - Q4 2024 gross profit was 3.25 billion RMB, with a gross margin of 43.6%, up 5.3 percentage points year-over-year [3] - Operating profit for Q4 2024 reached 2.41 billion RMB, a year-over-year increase of 40.5% [3] - The company expects revenue growth to improve in 2025, with a slight increase in operating expenses anticipated [3] Revenue Breakdown - Membership subscription revenue was 4.03 billion RMB, up 18.0% year-over-year, with a total of 121 million paying users [2] - Other music revenue reached 1.80 billion RMB, growing 12.5% year-over-year, supported by healthy advertising revenue [2] - Social entertainment revenue was 1.63 billion RMB, down 13.0% year-over-year, but showing signs of stabilization [2] Profitability Forecast - The adjusted net profit forecast for 2025 is set at 8.98 billion RMB, reflecting a growth rate of 17.0% [4] - The report projects a gradual increase in adjusted net profit for 2026 and 2027, with estimates of 10.44 billion RMB and 11.72 billion RMB respectively [4] Market Position - The company has solid competitive barriers, with expectations that SVIP development will enhance ARPPU and contribute to advertising revenue growth [3] - The report highlights the potential for continued profit release due to scale effects [3]

Investment Rating - The investment rating for Tencent Music is "Buy" [7][11]. Core Views - The report highlights that Tencent Music's Q4 2024 performance exceeded expectations, driven by robust growth in paid user numbers and an increase in ARPPU (Average Revenue Per Paying User) [2][4]. - The company is expected to maintain its leading position in the industry, with strong integration capabilities and potential for margin expansion [3][4]. Summary by Sections Financial Performance - In Q4 2024, Tencent Music reported revenue of RMB 74.6 billion, a year-on-year increase of 8.2%, and an adjusted net profit of RMB 24 billion, up 43% year-on-year [1][4]. - Online music revenue grew by 16% to RMB 58.3 billion, with subscription revenue increasing by 18% to RMB 40.3 billion [2]. User Growth and ARPPU - The number of online paying users increased by 13.4% year-on-year to 121 million, aligning with expectations [2]. - ARPPU rose to RMB 11.1, reflecting a sequential increase driven by strong growth in SVIP (Super VIP) memberships [2][3]. Profitability and Margin Outlook - The gross margin for Q4 2024 was 43.6%, an increase of 5.3 percentage points year-on-year [3]. - The report anticipates further improvement in gross margin to 45% by 2025, supported by growth in paid users and a decrease in revenue share from live streaming [3]. Valuation and Target Price - The adjusted net profit forecasts for 2025-2027 have been raised to RMB 86.7 billion, RMB 95.4 billion, and RMB 107.4 billion, respectively [4][11]. - The target price is set at USD 19.10 or HKD 68.43, based on a 25x PE multiple for 2025 [4][11].

Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME US) with a target price raised to $17.00, indicating a potential upside of 12.7% from the current price of $15.09 [2][16]. Core Insights - The report highlights that Tencent Music's Q4 profits exceeded expectations, with a 45% year-on-year increase in adjusted net profit to 22.8 billion RMB, driven by improved gross margins [2][6]. - The company continues to see robust growth in its music subscription revenue, with a target of 150 million members and an average revenue per paying user (ARPPU) of 15 RMB remaining unchanged [2][6]. - A new $1 billion share buyback plan has been announced, alongside a maintained dividend payout ratio of 26% and a dividend yield of 1.2% [2][6]. Financial Forecasts - Revenue projections for 2025 have been adjusted to 30,930 million RMB, reflecting a 1% increase from previous estimates [3]. - Online music revenue is expected to reach 25,313 million RMB in 2025, a 2% increase, with subscription revenue projected at 17,608 million RMB, also up by 1% [3]. - The adjusted net profit forecast for 2025 is now 8,611 million RMB, a 5% increase from prior estimates [3]. Performance Metrics - The report notes a significant improvement in gross margin, which is expected to rise to 45.2% in 2025, up from 43.8% [3]. - The adjusted operating profit margin is projected to increase to 31.8% in 2025, compared to 29.8% previously [3]. - The company’s stock has shown a year-to-date increase of 32.95% [5]. Market Position - Tencent Music's market capitalization is approximately $10.56 billion, with a 52-week high of $15.49 and a low of $9.46 [5][6]. - The report emphasizes the competitive landscape, noting that while social entertainment revenue may decline, online music and advertising revenues are expected to grow [2][6].