Core Viewpoint - Tencent Music (01698) is expanding into music platform companies, leveraging its leading position in the domestic music market, with projected revenue growth and profitability from 2025 to 2027 [1][2]. Group 1: Market Position - Tencent Music holds the largest market share in the domestic music market, with approximately 67% of paid users in 2024, and over 260 million authorized and co-created music and audio tracks [2]. - The company has over 800 million monthly active users across its platforms, including QQ Music, Kugou Music, and Kuwo Music, indicating a strong competitive advantage in content and user base [2]. Group 2: Growth Drivers - Three growth curves are identified to support the company's transition to a "music platform": 1. Online music subscriptions are the foundation, with a 6.3% year-on-year increase in paid users to 124 million and a 9.3% increase in ARPU to 11.7 million in Q2 2025 [3]. 2. Social entertainment is emerging as a new growth driver, with over 80 TME Live performances and collaborations with SM Entertainment to expand IP, alongside features like "Bubble" to enhance fan engagement [3]. 3. The B2B SaaS model is facilitating collaborations between music and industries like film and smart driving, with TME Studio offering comprehensive music services [3]. Group 3: AI Integration - AI is restructuring the online music value chain: - On the creation side, the "Qimingxing" tool is generating over 5,000 tracks daily in 2024, at a cost only 1/10 of manual creation [4]. - On the promotion side, algorithms are improving cold start efficiency, with daily user engagement time expected to rebound to 96 minutes in 2024 [4]. - On the consumption side, AI is driving paid user growth, with a significant increase in recommended play shares and a 10% year-on-year growth in user song collections [4].