Core Viewpoint - Tencent Music Entertainment Group (TME) is facing unprecedented challenges in the online music market, including declining subscription penetration, weakened exclusive copyright advantages, and a lack of original content development, which threaten its market share and reveal structural contradictions during its strategic transformation [3][4]. Subscription Penetration Battle - Tencent Music has over 600 million monthly active users, but its subscription penetration rate is approximately 8%, significantly lower than NetEase Cloud Music's 15%, reflecting differences in business models and user engagement strategies [5][6]. - NetEase Cloud Music enhances user willingness to pay through a community-oriented approach, transforming users from mere "music listeners" to an "emotional community," while Tencent Music relies on functional benefits, lacking emotional value [7][8]. - Tencent Music's attempts to boost subscription rates through low-price promotions have not been effective due to insufficient perceived value of music services, while NetEase Cloud Music has successfully created a positive cycle through differentiated content [9]. Post-Copyright Era - The end of the "copyright arms race" in July 2021, mandated by the State Administration for Market Regulation, has stripped Tencent Music of its core competitive advantage [11]. - Following the removal of copyright barriers, both platforms have a high overlap in music libraries, with over 80% similarity, significantly lowering user migration costs [12]. - Tencent Music's original content incubation efforts have been less successful compared to NetEase Cloud Music, which has effectively supported independent musicians and achieved a higher proportion of original song plays [13]. - Tencent Music's attempts to extend its industry chain through investments and acquisitions have faced challenges due to insufficient business synergy [14]. Social Function Shortcomings - Social features are crucial for enhancing user engagement, but Tencent Music lags behind in this area [17]. - NetEase Cloud Music has successfully integrated music with social interactions, resulting in high user activity, while Tencent Music's community features have low engagement [18][19]. - Data shows that Tencent Music's user retention rate has declined by 12% from 2021 to 2023, while NetEase Cloud Music's has increased by 7%, indicating weak social features lead to lower user loyalty [20]. Overseas Expansion Challenges - Tencent Music's overseas strategy has not achieved significant breakthroughs compared to global competitors like Spotify and Apple Music [22]. - The reliance on capital investments rather than product expansion has limited Tencent Music's ability to establish its own international brand, with its overseas product Joox holding less than 5% market share in Southeast Asia [22]. - Tencent Music's cultural output capabilities are lacking, as it remains focused on copyright resale rather than content innovation, unlike competitors who are reshaping global music trends [23]. - Increasing geopolitical risks and stricter regulations on Chinese companies in the U.S. are closing Tencent Music's window for overseas expansion [24].

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the online music industry, specifically analyzing the competitive landscape and performance of leading companies Tencent Music and NetEase Cloud Music [2][3][4]. Core Insights and Arguments 1. **Market Growth**: The online music market in China is projected to reach 20 billion RMB in 2024, with Tencent Music capturing over 15 billion RMB (26% growth YoY) and NetEase Cloud Music nearing 5 billion RMB (over 20% growth YoY) [3][6]. 2. **Competitive Landscape**: The market is characterized by a "one strong, one leading" structure, with Tencent Music holding 60-70% market share and NetEase Cloud Music 20-30%, indicating a stable competitive environment [3][6]. 3. **User Metrics**: As of the end of 2024, Tencent Music has a total MAU of 570 million and 120 million paying users (21% conversion rate), while NetEase Cloud Music has over 200 million MAU and 50-60 million paying users (over 25% conversion rate) [3][10]. 4. **Content Differentiation**: Tencent Music excels in K-pop licensing, while NetEase Cloud Music appeals to younger audiences with niche genres, highlighting the importance of content differentiation in competition [3][9]. 5. **Future Growth Potential**: The paid user rate in China's online music market is expected to reach 30-35%, translating to 250-300 million subscribers, indicating significant growth potential [3][12]. 6. **Profitability Forecast**: Tencent Music's adjusted profit is expected to reach 9 billion RMB in 2025 (17% growth), while NetEase Cloud Music's profit is projected at around 2 billion RMB, with both companies having room for valuation increases [3][23]. 7. **ARPU Trends**: Tencent Music's ARPU is 10.8 RMB, expected to rise to 11.8 RMB in 2025, driven by premium memberships. In contrast, NetEase Cloud Music's ARPU is below 7 RMB, necessitating strategic improvements to enhance revenue per user [13][20]. Additional Important Insights 1. **Cost Optimization**: Both companies have improved their gross margins through copyright cost optimization and increased self-produced content, with Tencent Music's gross margin at 42% and NetEase Cloud Music at 34% [16][20]. 2. **Non-Subscription Revenue**: Non-subscription revenue is performing well, with NetEase Cloud Music's non-subscription business growing by 28% and Tencent Music by 25%, indicating a shift towards ad-supported models [22]. 3. **Valuation Outlook**: Tencent Music is expected to have a valuation of around 19 times earnings, while NetEase Cloud Music is projected at less than 15 times, reflecting their respective market positions and growth prospects [24][25]. 4. **Future Challenges**: Both companies face challenges in maintaining user engagement and monetization strategies, particularly in light of regulatory changes affecting social entertainment segments [21][26]. This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the online music industry's current state and future outlook.

腾讯音乐上涨2.93%，报14.595美元/股，总市值 250.46亿美元 3月25日，腾讯音乐(TME)盘中上涨2.93%，截至22:00，报14.595美元/股，成交1377.51万美元，总市值 250.46亿美元。 财务数据显示，截至2024年12月31日，腾讯音乐收入总额284.01亿人民币，同比增长2.34%；归母净利 润66.44亿人民币，同比增长35.04%。 大事提醒： 3月19日，腾讯音乐获交银国际证券维持评级至买入，目标价上调至17美元。 5月12日，腾讯音乐将披露2025财年一季报（数据来源于纳斯达克官网，预计披露日期为美国当地时 间，实际披露日期以公司公告为准）。 资料显示，腾讯音乐娱乐集团(纽交所股票代码:TME及港交所股票代码:1698)是中国领先的在线音乐与 音频娱乐平台,运营着在国内市场广受欢迎的创新性音乐产品:QQ音乐、酷狗音乐、酷我音乐和全民K 歌。公司的平台提供在线音乐、在线音频、在线K歌、以音乐为核心的直播及线上演出等服务。公司不 仅是音乐流媒体服务提供商,还将平台打造成一个庞大的社区,让音乐爱好者围绕音乐"发现、听、唱、 看、演出、社交"。在公司的平台上,分享、点赞、 ...

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].