Investment Rating - The report maintains a "Buy" rating for Tencent Music, with a target price of HKD 53.17 [4][2]. Core Insights - In Q2 2024, Tencent Music reported revenue of CNY 7.16 billion, a year-over-year decrease of 1.7% but a quarter-over-quarter increase of 5.8%. The company expects Q3 revenue to reach CNY 7 billion, reflecting a year-over-year increase of 6.7% [1]. - The gross margin for Q2 2024 was 42.04%, up 7.77 percentage points year-over-year and 1.10 percentage points quarter-over-quarter, driven by strong growth in music subscription and advertising services [1]. - The online music service revenue for Q2 2024 was CNY 5.42 billion, a year-over-year increase of 27.65% and a quarter-over-quarter increase of 8.33%. The company anticipates Q3 revenue of CNY 5.6 billion, a year-over-year increase of 23% [1]. - The social entertainment service revenue for Q2 2024 was CNY 1.74 billion, a year-over-year decrease of 42.84% and a quarter-over-quarter decrease of 1.42%. The company expects Q3 revenue to decline to CNY 1.4 billion [1]. Financial Summary - The report forecasts net profit attributable to shareholders for 2024, 2025, and 2026 to be CNY 6.7 billion, CNY 8.2 billion, and CNY 10.2 billion respectively, reflecting an upward adjustment due to increased ARPPU and gross margin [2]. - The expected ARPPU for Q3 2024 is CNY 10.9 per month, with a projected annual membership revenue of CNY 15.2 billion for 2024, a year-over-year increase of 26% [1][2]. - The report provides a comparison of valuation metrics with peer companies, suggesting a P/E ratio of 25 times for 2024 [2][8].
腾讯音乐-SW：24Q2点评：SVIP驱动会员ARPPU增长，平台利润率持续提升