Core Viewpoint - The acquisition of Himalaya by Tencent Music Entertainment Group for $1.26 billion is seen as a strategic move to enhance Tencent's audio business and boost its stock price, while Himalaya aims to maintain its independent operations and brand identity post-acquisition [2][5][19]. Group 1: Acquisition Details - Tencent Music announced the acquisition of Himalaya, the largest online audio company in China, for a total transaction value exceeding $2.73 billion (approximately 20 billion RMB) [2]. - Following the acquisition, Himalaya will operate as a wholly-owned subsidiary of Tencent Music, with no changes to its core team or strategic direction [2][3]. - The acquisition is expected to significantly impact Tencent Music's stock price and expand its business portfolio [5]. Group 2: Himalaya's Business Performance - Himalaya has been profitable for nine consecutive quarters since 2023, with a revenue of 6.16 billion RMB in 2023, but its revenue growth rate has slowed dramatically from an average compound growth rate of 47% from 2019 to 2021 to around 5% from 2021 to 2023 [3][14]. - The company has reduced its workforce from 4,342 employees at the end of 2021 to 2,637 by April 2025, indicating a significant cost-cutting strategy [4]. - Himalaya's revenue sources include advertising, membership, knowledge payment, and audio live streaming, with a focus on audiobooks, children's content, and podcasts [14]. Group 3: Market Position and Competition - Himalaya holds the largest market share in China's online audio sector, with approximately 60% of mobile listening time and over 300 million monthly active users [7]. - The company faces intense competition from short video platforms, web novel platforms, and emerging audio apps, which are capturing user attention and market share [15][17]. - Despite its leading position, Himalaya's growth is challenged by the saturation of the online audio market and the rise of alternative content platforms [14][17]. Group 4: Investment and Valuation - Prior to the acquisition, Himalaya's valuation had reached over 30 billion RMB, but the latest transaction suggests a decrease in its valuation to two-thirds of its previous estimate [12]. - The company has undergone multiple rounds of investment, raising nearly 10 billion RMB from various investors, including Tencent and Xiaomi [8][11].