Investment Rating - The report does not explicitly state an investment rating for Tencent Music Entertainment (TME) [2] Core Views - TME's 24Q2 performance exceeded expectations with a net profit of RMB 1.79 billion, up 33.1% YoY, and an adjusted net profit of RMB 1.99 billion, up 25.7% YoY [2] - Revenue for 24Q2 was RMB 7.16 billion, up 1.7% YoY, with an operating profit of RMB 2.2 billion, up 42.8% YoY, and an operating profit margin of 30.7% [2] - Online music service revenue grew 27.7% YoY to RMB 5.42 billion, driven by strong growth in subscription revenue and advertising income [2] - Social entertainment and other services revenue declined 42.8% YoY to RMB 1.74 billion due to adjustments in live streaming features and increased competition [2] - Gross margin and net margin have improved for nine consecutive quarters, with a gross margin of 42.0% and a net margin of 25.1% in 24Q2 [2] - The company expects steady growth in net paying users and anticipates ARPPU growth driven by SVIP offerings, which could further enhance profitability [2] Business Performance - Online music subscription revenue reached RMB 3.74 billion, up 29.4% YoY, with paying users increasing to 117 million, up 17.7% YoY [2] - ARPPU for online music services was RMB 10.7, up 10% YoY, with SVIP offerings expected to drive further ARPPU growth [2] - Advertising revenue saw strong growth due to diversified product offerings and innovative ad formats [2] - Social entertainment revenue declined due to stricter compliance measures and competitive pressures [2] Financial Metrics - Gross margin improved by 7.7 percentage points YoY to 42.0% in 24Q2 [2] - Net margin increased by 6.6 percentage points YoY to 25.1% in 24Q2 [2] - Adjusted net margin rose by 6.1 percentage points YoY to 27.8% in 24Q2 [2] - Sales expenses were RMB 210 million, with a sales expense ratio of 2.9%, flat YoY [2] - Management expenses were RMB 938 million, with a management expense ratio of 13.1%, down 1.2 percentage points YoY [2] Future Outlook - TME expects ARPPU growth to outpace net paying user growth in the second half of the year, driven by SVIP offerings [2] - SVIP benefits include early access to digital albums, enhanced audio quality features, and multi-device access, with a monthly price of RMB 40 compared to RMB 15 for regular members [2] - The company anticipates further improvements in gross and net margins for the full year [2]
腾讯音乐：24Q2业绩点评：24Q2净利润持续超预期，关注后续SVIP带来提价