Investment Rating - The report maintains a "Buy" rating for the company, considering its attractive valuation and sustainable growth prospects in the music business [3][7]. Core Insights - TME reported a total revenue growth of 16% year-on-year to RMB 86.4 billion in Q4 2025, exceeding Bloomberg's forecast by 3%, driven by a strong performance in non-subscription music business, which grew by 41% [3]. - Non-IFRS net profit increased by 9% year-on-year to RMB 24.9 billion, aligning with expectations. For the fiscal year 2025, total revenue and non-IFRS net profit grew by 16% and 25% year-on-year, reaching RMB 329 billion and RMB 95.9 billion, respectively [3]. - For fiscal year 2026, total revenue is expected to grow by 10%, with music subscription and non-subscription revenues projected to increase by 6% and 25%, respectively [3][5]. - The management anticipates short-term competitive pressure on music subscription revenue and plans to increase investments in content and marketing to strengthen its competitive edge [3][5]. Revenue Summary - Online music revenue in Q4 2025 grew by 22% year-on-year to RMB 71 billion, with subscription revenue increasing by 13% to RMB 45.6 billion, accounting for 53% of total revenue [4]. - Non-subscription music revenue surged by 41% to RMB 25.3 billion, driven by strong growth in offline performances and advertising revenue [4]. - The company hosted 20 concerts for G-DRAGON in 2025, attracting over 260,000 attendees, including 25 sold-out shows in Q4 [4]. Financial Projections - For Q1 2026, total revenue is projected to grow by 7% year-on-year to RMB 79 billion, supported by growth in both subscription and non-subscription revenues [5]. - The overall gross profit margin in Q4 2025 increased by 1.1 percentage points year-on-year to 44.7%, primarily due to operational leverage and strict cost control [5]. - The company announced an annual dividend of USD 0.24 per American Depositary Share (ADS), representing a yield of approximately 2% [5]. Long-term Sustainability - The target price has been adjusted from USD 28.0 to USD 20.0 based on a discounted cash flow (DCF) valuation method [3][18]. - The current stock price is USD 11.37, indicating a potential upside based on the revised target price [7].

Group 1 - The company, Wanma Co., Ltd. (002276), emphasizes a commitment to long-term sustainable development in its strategic planning [1] - The company aims to enhance operational efficiency and optimize resource allocation to achieve a synergy between short-term operational goals and long-term strategies [1]

Core Viewpoint - The company is focusing on leveraging the resources and advantages of Jinjiang Group in strategic planning and industrial scale to enhance its core and overall competitiveness for sustainable long-term development [1] Group 1 - The company is continuously concentrating on its core business [1] - The company aims to strengthen its core and comprehensive competitiveness [1] - The company is committed to promoting long-term sustainable development [1]