Investment Rating - The report maintains an "Outperform" rating for Tencent Music (TME.N) [1][4][3] Core Insights - The online music business is experiencing robust growth, with a significant increase in subscription users and revenue [3][12] - The company achieved total revenue of 70.2 billion yuan in Q3 2024, representing a year-on-year increase of 6.8% [1][7] - The adjusted net profit for Q3 2024 reached 19.4 billion yuan, up 29.1% year-on-year, with an adjusted profit margin of 27.7% [1][7] - The number of SVIP members has surpassed 10 million, contributing positively to the subscription business [2][12] Summary by Sections Revenue and Profitability - Total revenue for Q3 2024 was 70.2 billion yuan, with online music revenue accounting for 78% of this total [1][7] - Online music revenue grew by 20.4% year-on-year, reaching 54.8 billion yuan in Q3 2024 [2][10] - The gross margin for Q3 2024 was 42.6%, an increase of 7.0 percentage points year-on-year [1][7] Subscription Business - The subscription user base increased by 2 million quarter-on-quarter, with a total of 1.19 billion paid users, reflecting a 16% year-on-year growth [2][12] - The average revenue per paying user (ARPPU) for subscriptions was 10.8 yuan, up 4.9% year-on-year [2][12] - The company expects the subscription user growth to continue at a similar pace into 2025 [3][12] Cost Management and Profit Forecast - The report highlights effective cost control, leading to an upward revision of profit expectations for 2024-2026, with adjusted net profits projected at 78 billion, 89 billion, and 90 billion yuan respectively [4][3] - The management fee ratio has room for optimization, contributing to improved profitability [1][7] Market Position and Future Outlook - Tencent Music's leading position in the market is expected to support the continued growth of its subscription business, particularly through the SVIP strategy [3][12] - The company anticipates that the SVIP user base could reach 20-30 million, which would further enhance ARPPU contributions [3][12]
腾讯音乐：订阅业务增长稳健，SVIP会员达1000万