Investment Rating - The report assigns a "Buy" rating for Tencent Music (TME US) with a target price of 14.69 [1][15]. Core Insights - The report highlights a focus on high-quality membership growth and the release of operational and profit potential, with an adjusted net profit forecast for 2025 increased by 3% to RMB 8.9 billion [1][5]. - The SOTP (Sum of the Parts) target price is derived from music at 1, and cash at $2, based on respective price-to-earnings ratios [1][5]. - The report anticipates steady growth in online music, driven by an increase in ARPPU (Average Revenue Per Paying User) that is expected to outpace membership growth [1][5]. Financial Forecasts - Revenue projections for 2025 are set at RMB 31.177 billion, reflecting a 1% increase from previous estimates [2]. - Online music revenue is expected to reach RMB 25.417 billion in 2025, with subscription revenue projected at RMB 17.729 billion, both showing slight increases [2]. - The adjusted net profit for 2025 is forecasted at RMB 8.905 billion, a 3% increase from prior estimates [2]. Quarterly Performance Overview - In Q1 2025, Tencent Music reported revenues of RMB 7.356 billion, with music subscription revenue growing by 16.6% year-over-year [5][8]. - The number of paying music members reached approximately 122.9 million, with a monthly ARPPU of RMB 11.4, reflecting an 8% year-over-year increase [5][8]. - The adjusted net profit for Q1 2025 was RMB 2.226 billion, a 25% increase year-over-year, slightly exceeding market expectations [5][8]. Future Outlook - For Q2 2025, total revenue is projected to be RMB 7.987 billion, with online music revenue expected to grow by 19% year-over-year [10]. - The report anticipates a continued focus on high-quality membership growth, with a forecasted increase in monthly ARPPU to RMB 11.6 [10]. - Non-subscription revenue is expected to grow by 25% year-over-year, driven by advertising and fan economy growth [5][10].
腾讯音乐（TME）：聚焦高质量会员增长，关注SVIP 运营及利润释放