Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.N) [2] Core Insights - The company reported Q3 2024 revenue of 7.02 billion RMB, a year-over-year increase of 6.8%, slightly above Bloomberg consensus of 7.00 billion RMB. Gross profit reached 2.99 billion RMB, up 27.7% year-over-year, with a gross margin of 42.6%, benefiting from strong growth in music subscription revenue and rapid growth in advertising revenue [1] - Adjusted net profit for Q3 2024 was 1.94 billion RMB, a 29.1% increase year-over-year, also exceeding Bloomberg consensus of 1.92 billion RMB [1] - The company repurchased approximately 421 million American Depositary Shares for about 335.5 million USD from the open market [1] Summary by Sections Revenue Breakdown - Online music revenue was 5.48 billion RMB, a year-over-year increase of 20.4%, accounting for 78.1% of total revenue, up 8.8 percentage points year-over-year [1] - Subscription revenue reached 3.84 billion RMB, a 20.3% year-over-year increase, with paid user count at 119 million, adding 2 million users quarter-over-quarter, and a year-over-year growth in payment rate of 3.3 percentage points to 20.7% [1] - The average revenue per paying user (ARPPU) for subscriptions was 10.8 RMB, up 4.9% year-over-year, driven by reduced discounts and SVIP offerings [1] - Social entertainment revenue was 1.535 billion RMB, down 23.9% year-over-year, but the decline was mitigated by improvements in KuGou Live and strong performance in advertising and VIP subscription services [1] Profitability and Cost Management - Operating profit for Q3 2024 was 2.144 billion RMB, a 50.5% increase year-over-year [1] - Operating costs decreased by 4.8% year-over-year to 4.024 billion RMB, with music content cost growth slower than revenue growth [1] - Total expenses fell by 3.9% year-over-year to 1.22 billion RMB, with management expenses down 4.9% to 999.8 million RMB due to reduced personnel costs [1] Future Outlook - The SVIP subscription count has surpassed 10 million, with expectations for continued growth through diversified privileges enhancing user experience [1] - The company maintains a solid competitive barrier, with steady growth in subscription users and anticipated ARPPU uplift from SVIP development [1] - Adjusted net profit forecasts for 2024-2026 are maintained at 7.4 billion, 8.4 billion, and 9.4 billion RMB respectively [1]
腾讯音乐：24Q3业绩点评：订阅用户稳健增长，SVIP推动ARPPU增长