Investment Rating - The report maintains a "Buy" rating for Tencent Music [4] Core Views - The online music revenue is expected to continue increasing due to the growth in paid users and ARPPU, leading to an overall improvement in profit margins. The forecasted net profit for the years 2025 to 2027 is 10.41 billion, 10.14 billion, and 11.16 billion RMB respectively, with a target price set at 94.86 HKD [2][4] Financial Performance Summary - The company's revenue for 2023 is projected at 27.75 billion RMB, with a year-on-year growth of -2.1%. This is expected to rise to 31.45 billion RMB in 2025, reflecting a growth of 10.7% [3][9] - Operating profit is forecasted to increase significantly from 4.78 billion RMB in 2023 to 9.44 billion RMB in 2025, marking a growth of 28.5% [3][9] - The net profit attributable to the parent company is expected to grow from 4.92 billion RMB in 2023 to 10.41 billion RMB in 2025, representing a substantial increase of 56.7% [3][9] - The gross margin is anticipated to improve from 35.3% in 2023 to 45.6% in 2025, while the net margin is expected to rise from 17.7% to 33.1% over the same period [3][9] Revenue Breakdown - Online music revenue for Q1 is reported at 5.8 billion RMB, showing a year-on-year increase of 15.9%. The forecast for Q2 is 6.43 billion RMB, with an expected growth of 18.6% [7] - Social entertainment revenue for Q1 is 1.55 billion RMB, down 11.9% year-on-year, with expectations for Q2 to remain flat [7] Market Position and Valuation - The target price of 94.86 HKD corresponds to a P/E ratio of 27 times for 2026, based on comparable company analysis [2][8] - The report highlights a strong performance relative to the Hang Seng Index, with a 1-week absolute performance of 13.51% and a 1-month performance of 30.05% [5]
腾讯音乐-SW（01698）：25Q1点评：特权、有声驱动SVIP转化，粉丝经济强化非包月收入增长