Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME) with a target price of $13.16 per ADS, equivalent to HKD 51.45 per share [4][30]. Core Insights - Tencent Music's Q4 2023 total revenue reached RMB 6.89 billion, exceeding consensus expectations by 3% [2][8]. - The gross margin for Q4 2023 was 38.3%, reflecting a year-over-year increase of 5.4 percentage points [2][24]. - Non-GAAP net profit for Q4 2023 was RMB 1.575 billion, showing a year-over-year growth of 10% [2][13]. - The music business revenue grew significantly, with subscription revenue reaching RMB 3.42 billion, a 45% year-over-year increase [2][13]. Summary by Sections Financial Performance - Q4 2023 total revenue was RMB 6.89 billion, with a year-over-year decline of 7% but a quarter-over-quarter increase of 5% [2][8]. - Gross margin improved to 38.3%, up 5.4 percentage points year-over-year [2][24]. - Non-GAAP net profit was RMB 1.575 billion, with a net profit margin of 22.8% [2][13]. Music Business Growth - Music revenue for Q4 2023 reached RMB 5 billion, a 41% increase year-over-year [2][13]. - Subscription revenue was RMB 3.42 billion, with a total membership of 106.7 million, reflecting a 21% year-over-year growth [2][13]. - Monthly ARPU increased to RMB 10.7, up 20% year-over-year [2][13]. Advertising and Other Revenue - Other revenue, primarily from advertising, was RMB 1.6 billion, showing a 33% year-over-year increase [2][18]. - The social entertainment segment generated RMB 1.871 billion, down 52% year-over-year, indicating a stabilization after adjustments [2][21]. Future Projections - Revenue forecasts for 2024 and 2025 are RMB 28.6 billion and RMB 33.1 billion, representing growth rates of 3.1% and 15.7% respectively [2][28]. - Adjusted net profit for 2024 and 2025 is projected at RMB 6.825 billion and RMB 8.258 billion, with growth rates of 15.2% and 21.0% [2][28]. - The report anticipates continued growth in the music business driven by increased subscription and advertising revenues [2][28].
自制音乐占比提升带动毛利率持续优化