Tencent Music Entertainment Group Investor Presentation (NYSE: TME & HKEX: 1698) November 2025 Disclaimer This presentation has been prepared by Tencent Music Entertainment Group (the "Company") solely for informational purposes and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctnes ...

Core Insights - Tencent Music Entertainment Group (TME) reported strong financial results for Q3 2025, driven by growth in online music services and innovative content offerings [3][7][12]. Financial Highlights - Total revenues reached RMB 8.46 billion (US$1.19 billion), a 20.6% year-over-year increase [7][12]. - Revenues from online music services were RMB 6.97 billion (US$979 million), reflecting a 27.2% year-over-year growth [7][12]. - Music subscription revenues grew to RMB 4.50 billion (US$632 million), marking a 17.2% year-over-year increase [7][12]. - Net profit attributable to equity holders was RMB 2.15 billion (US$302 million), a 36.0% year-over-year growth [7][19]. - Monthly ARPPU increased to RMB 11.9 from RMB 10.8 in the same period of 2024, representing a 10.2% growth [4][7]. Operational Highlights - Monthly Active Users (MAUs) for online music decreased to 551 million, down 4.3% year-over-year [4]. - Paying users for online music increased to 125.7 million, a 5.6% year-over-year growth [4]. - The company expanded its music offerings across various genres and languages, enhancing its content ecosystem [5][8]. Strategic Initiatives - TME enhanced partnerships with renowned labels and artists, including contracts with Korean label DREAMUS and collaborations with Blizzard Entertainment [8]. - The company successfully organized large-scale concert tours, including G-DRAGON's concerts, which attracted over 150,000 attendees [8][9]. - TME launched the TMElive International Music Awards (TIMA), showcasing 22 artists and enhancing its industry influence [8][9]. User Engagement and Innovation - The company introduced differentiated membership offerings, improving user service and loyalty [10][11]. - Enhanced streaming experiences and artist-related benefits contributed to increased SVIP penetration and ARPPU [11][16]. - TME's innovative features, such as AI-generated lyrics and immersive sound technologies, have improved user engagement [16].

Group 1: Music Stocks Overview - Seven music stocks to watch include Tencent Music Entertainment Group, NetEase, Warner Music Group, Dolby Laboratories, Madison Square Garden Entertainment, Zeta Network Group, and LiveOne, identified by MarketBeat's stock screener tool [2] - Music stocks represent publicly traded companies primarily engaged in the music industry, including record labels, streaming platforms, and live-event companies, providing exposure to revenue streams like streaming subscriptions, licensing, royalties, and live ticket sales [2] Group 2: Tencent Music Entertainment Group (TME) - Tencent Music Entertainment Group operates online music entertainment platforms in China, offering services such as music streaming, online karaoke, and live streaming [3] - The company provides QQ Music, Kugou Music, Kuwo Music, and WeSing, enabling personalized music discovery and sharing of karaoke performances [3] Group 3: NetEase (NTES) - NetEase, Inc. is involved in online games, music streaming, online intelligent learning services, and internet content services, operating through various segments including Games and Related Value-Added Services, Youdao, Cloud Music, and others [4] Group 4: Warner Music Group (WMG) - Warner Music Group Corp. operates as a music entertainment company with segments in Recorded Music and Music Publishing, focusing on artist discovery, marketing, promotion, and licensing of music [4] Group 5: Dolby Laboratories (DLB) - Dolby Laboratories, Inc. develops audio and imaging technologies for various entertainment platforms, including cinema and mobile devices, and licenses technologies like AAC, AVC, and Dolby Atmos [5] Group 6: Other Companies - Madison Square Garden Entertainment (MSGE) is mentioned but lacks specific details in the provided content [6] - Zeta Network Group (ZNB) offers online entertainment performances and music education services, operating an online platform that includes various curricula [7] - LiveOne, Inc. focuses on live music acquisition, distribution, and monetization, operating platforms like LiveXLive and PodcastOne [7]

Digital China Plan - In May 2025, China released its Digital China Plan, focusing on "Artificial Intelligence (AI) Plus" applications and data infrastructure development [1] - The goal is to increase China's computing power and grow the digital economy's share of GDP beyond 10% [1] - This initiative creates a favorable environment for leading tech firms to scale their platforms [1] Tencent Music Entertainment Group (TME) - In 2Q 2025, TME reported a revenue growth of nearly 18% YoY to approximately US$1.2 billion [2] - Net profits increased by 43.2% YoY to US$336 million [2] - Revenue from online music services surged by 26.4% YoY to US$957 million, with music subscription revenue climbing 17.1% YoY to US$611 million [3] - Successful product innovations, particularly for Super VIP customers, contributed to this growth [3] - TME's acquisition of Ximalaya, a leading online audio platform, is expected to enhance its long-form audio services [4] - A renewed strategic partnership with Galaxy Arena supports TME's live entertainment segment growth [5] NetEase Inc. - In 2Q 2025, NetEase reported a revenue increase of 9.4% YoY to US$3.9 billion [7] - Net profit rose by 27.3% YoY to US$1.2 billion, driven by gaming services revenue growth of 13.7% YoY to US$3.2 billion [7] - The educational technology segment, Youdao, saw a revenue increase of 7.2% YoY to US$198 million, attributed to AI integration [8] - The announcement of Blood Message, a AAA single-player title, positions NetEase competitively in the global gaming market [9] Baidu Inc. - In 2Q 2025, Baidu reported revenue of US$4.6 billion, a decline of 4% YoY, but net profits increased by 33% YoY to US$1 billion [10] - The profit increase is linked to successful AI initiatives, including the AI transformation of Baidu Search [10] - Monthly active users of the Baidu App rose by 5% YoY to 735 million [11] - Non-online marketing revenue, including Baidu AI Cloud and Apollo Go, grew by 34% YoY to US$1.4 billion [11] - Strategic partnerships with Lyft and DeepX aim to expand Baidu's AI capabilities and market access [12]

Industry Overview - The entertainment consumption landscape has shifted from scheduled cable television to digital streaming platforms over the last two decades, with significant milestones including the launch of YouTube in 2005 and Netflix's on-demand model in 2007 [2] - The global streaming market is projected to generate $190 billion annually by 2029, supported by 2 billion subscriptions, with subscription models dominating while free ad-supported TV and hybrid offerings gain traction [4] Company Insights: Tencent Music Entertainment Group (TME) - TME has evolved from a digital distributor to China's leading online music and audio entertainment platform, reaching over 553 million monthly active users and 124 million paying subscribers, reflecting a 22.5% paying ratio [6][7] - The average revenue per paying user (ARPPU) has climbed to RMB 11.7, with management focusing on SVIP expansion, bundled content offerings, and closer artist partnerships as growth drivers [8] - TME's global expansion strategy includes high-profile concerts and collaborations with international labels, enhancing its cultural reach beyond China [9] - With RMB 34.9 billion in cash reserves, TME is well-positioned to invest in AI-powered music tools and immersive sound technologies [10] Company Insights: Disney - Disney launched Disney+ in 2019, rapidly building a subscriber base of 128 million as of Q3 2025, with a combined subscriber base of 183 million across Disney+, ESPN+, and Hulu [11][12] - The integration of Hulu into Disney+ is expected to create operating synergies and enhance user experiences, while management anticipates over 10 million new subscriptions in Q4 2025 due to expanded distribution agreements [13][14] - Sports streaming is a key growth area, with ESPN's direct-to-consumer service launching in August 2025, backed by exclusive rights to WWE events and a deal with the NFL [15][16] Company Insights: Roku - Roku is the leading TV streaming platform provider in North America, evolving from a streaming device manufacturer to a comprehensive streaming ecosystem [17] - The Roku Channel has become a significant driver of engagement, with streaming hours reaching 35.4 billion in Q2 2025, up 17.6% year over year [19] - Roku's platform fundamentals are strong, supported by high user engagement and strategic partnerships, with the Roku Home Screen reaching over 125 million households daily [20]

Company Overview - TME is committed to the healthy development of China's online music industry[7] - TME has a large user base with 576 million online music MAUs[13] and 90 million social entertainment mobile MAUs[15] in 3Q2024 - TME boasts an extensive content library with over 200 million music and audio tracks[14, 20] and 480K+ indie musicians[15] - TME's total cash, cash equivalents, term deposits, and short-term investments reached RMB 3604 billion[15, 18, 49] Business Overview - TME has partnerships with hundreds of domestic and international music labels[20] - TME is expanding LLM capabilities, AIGC tools & full-suite of resources and services to streamline content production[21] - TME cultivates and empowers indie musicians & original music through Tencent Musician Platform[22] Financial Highlights - TME's online music monthly ARPPU was RMB 108 in 3Q24, a 49% year-over-year increase[37] - TME's revenue from music subscriptions reached RMB 384 billion in 3Q24, a 203% year-over-year increase[37] - TME's gross margin was 426% in 3Q24, a 69 percentage point year-over-year increase[37] - TME's Non-IFRS net profit was RMB 194 billion in 3Q24, a 291% year-over-year increase[37]

Company Overview - TME is committed to the healthy development of China's online music industry[7] - TME has a large user base, innovative product matrix, comprehensive content library, and diversified monetization methods[11] - TME has over 260 million music and audio tracks[12, 15] and over 580,000 indie musicians[12] Business Overview - TME has partnerships with hundreds of domestic and international music labels[15] - TME cultivates and empowers indie musicians through the Tencent Musician Platform[17] - TME utilizes LLMs & industry-pioneered licensed AI features to enhance promotion, distribution and copyright protection[18] - TME's platform caters to varying needs of music consumers, with online music paying users reaching 122.9 million and a paying ratio of 22.1% in 1Q25[8, 24] Financial Highlights - TME's total cash, cash equivalents, term deposits, and short-term investments amounted to RMB 37.67 billion as of March 31, 2025[12, 45] - TME's LTM 2025 total revenues were RMB 29.0 billion with a 29.5% LTM 2025 adjusted net margin[12] - TME's 1Q25 revenue from music subscriptions was RMB 5.80 billion, a 16.6% year-over-year increase[34] - TME's 1Q25 online music monthly ARPPU was RMB 11.4, a 7.5% year-over-year increase[12, 34] - TME's 1Q25 Non-IFRS net profit was RMB 2.23 billion, a 22.8% year-over-year increase[34]

Company Overview - TME boasts a large user base and innovative technology, holding 4 out of the top 5 music mobile apps in China[15] - The platform has an extensive content library with over 260 million music and audio tracks[15] - TME's online music subscribers reached 121 million in 4Q24, demonstrating a year-over-year growth of 134%[12] - The company reported total cash, cash equivalents, term deposits, and short-term investments of RMB 3758 billion as of December 31, 2024[14] - TME's last twelve months (LTM) total revenues as of December 31, 2024, were RMB 284 billion, with an adjusted net margin of 286%[14] Business Overview - TME has partnerships with hundreds of domestic and international music labels, offering a diversified music library[17] - The platform cultivates and empowers indie musicians through the Tencent Musician Platform[19] Financial Highlights - In 4Q24, revenue from music subscriptions reached RMB 403 billion, an increase of 180% year-over-year[37] - 4Q24 revenue from other online music services was RMB 180 billion, up 121% year-over-year[37] - The online music monthly ARPPU for 4Q24 was RMB 111, a 37% year-over-year increase[38] - Non-IFRS net profit for 4Q24 was RMB 240 billion, showing a significant increase of 430% year-over-year[38] - The company's gross margin for 4Q24 was 436%, a 53 percentage point increase year-over-year[37]

Core Insights - Tencent Music Entertainment Group (TME) is positioned as the leading music streaming service in China, comparable to Spotify and Apple Music in the global market [1] - The company operates key music applications including QQ Music and Kugou Music, boasting over 550 million users as of the first quarter of 2025 [1] Company Overview - TME's primary products are music streaming apps that cater to a vast audience in China, indicating a strong market presence and user engagement [1] - The company is focused on expanding its user base and enhancing its service offerings to maintain competitive advantage in the rapidly evolving music streaming industry [1]

Core Points - Tencent Music Entertainment Group (TME) has filed its annual report on Form 20-F with the SEC, including audited financial statements for the fiscal year ended December 31, 2024 [1] - The annual report is accessible on TME's investor relations website and the SEC's website, with hard copies available to shareholders upon request [2] - TME is recognized as the leading online music and audio entertainment platform in China, operating popular music apps such as QQ Music, Kugou Music, Kuwo Music, and WeSing [3]