TME-腾讯音乐：内联第三季度业绩； SVIP 作为新的增长动力发展

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of $16.00 based on discounted cash flow (DCF) valuation methods [11][19]. Core Insights - The company reported a total revenue of RMB 7.02 billion for Q3 2024, a year-on-year increase of 7%, aligning with consensus expectations. Non-IFRS net profit grew by 29% to RMB 1.81 billion, also meeting expectations [1][2]. - The SVIP subscription service has reached a milestone of 10 million users, which is expected to drive future growth in music ARPPU (average revenue per paying user) and overall revenue [1][4]. - Online music revenue increased by 20% year-on-year to RMB 5.48 billion, supported by robust growth in both subscription and non-subscription revenues [1][4]. Revenue Summary - Total revenue for FY24E is projected to be RMB 28.25 billion, with a forecasted growth of 6% for Q4 2024, reaching RMB 7.31 billion [4][10]. - The online music segment is expected to see a 15% increase in revenue for Q4 2024, while social entertainment revenue is anticipated to decline by 17% [4][10]. Profitability Metrics - The gross profit margin (GPM) for Q3 2024 was reported at 42.6%, a year-on-year increase of 6.9 percentage points, attributed to strong growth in music ARPPU and advertising revenue [2][10]. - The non-IFRS net profit margin for Q3 2024 expanded to 25.9%, up 4.4 percentage points year-on-year [2][10]. User Growth and Engagement - The number of paying users increased by 2 million quarter-on-quarter to 119 million, representing a 16% year-on-year growth [1][4]. - The monthly ARPPU for Q3 2024 was RMB 10.8, reflecting a 4% year-on-year increase [1][4]. Financial Forecasts - For FY25E, the company expects further expansion in profit margins, with GPM projected to reach 44.5% and non-IFRS net profit margin at 28.2% [10][12]. - The adjusted net profit for FY25E is forecasted to be RMB 8.79 billion, with a continued focus on balanced growth in music subscription users and ARPPU [10][12]. Market Performance - The company's market capitalization is approximately$ 17.8 billion, with a 52-week high of $15.49 and a low of$ 7.43 [5][6]. - The stock has underperformed in the short term, with a 1-month decline of 9.6% and a 6-month decline of 13.4% [6][6].