Core Viewpoint - The report from CICC indicates an upward adjustment in Tencent Music's revenue and Non-IFRS net profit forecasts for 2025 and 2026, driven by better-than-expected progress in music subscription ARPPU [1] Group 1: Financial Performance - In Q1 2025, Tencent Music reported revenue of 7.356 billion yuan, an 8.7% year-on-year increase, aligning with CICC's expectations [2] - The Non-IFRS net profit for Q1 2025 was 2.124 billion yuan, a 24.6% increase, surpassing CICC's forecast [2] - The gross margin for Q1 2025 improved by 0.5 percentage points to 44.1%, with stable sales and management expenses [4] Group 2: Music Business Growth - The online music segment generated revenue of 5.804 billion yuan in Q1 2025, reflecting a 15.9% year-on-year growth, with subscription revenue increasing by 16% to 4.22 billion yuan [3] - The number of paying users rose by 1.9 million to 123 million, and ARPPU increased by 7.5% to 11.4 yuan per month [3] - The SVIP service showed strong performance, driven by sound quality, promotional measures, concert rights, and long audio content [3][5] Group 3: Social Entertainment Segment - The social entertainment revenue for Q1 2025 was 1.552 billion yuan, down 11.9% year-on-year, with expectations of continued revenue decline throughout the year [3] Group 4: Strategic Focus - The company is focusing on long audio content, which is seen as a core driver for SVIP subscriptions, enhancing content differentiation [5] - Long audio content is expected to complement music users and improve the overall quality and quantity of the content library [5]
中金：维持腾讯音乐-SW(01698)“跑赢行业”评级 目标价65.2港元