Tencent Music Entertainment Group (NYSE:TME) Posts Quarterly Earnings Results

Tencent Music Entertainment Group (NYSE:TME) announced its quarterly earnings data on Tuesday. The company reported $0.25 earnings per share for the quarter, topping analysts’ consensus estimates of $0.24 by $0.01, reports. The firm had revenue of $1.32 billion during the quarter. Tencent Music Entertainment Group had a net margin of 26.27% and a return on equity of 11.62%. The company’s revenue was up 5.8% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $1.55 earnings per share.

Here are the key takeaways from Tencent Music Entertainment Group’s conference call:

• Q2 revenue increased 6% year over year to RMB 8.9 billion, with music-related services up 11% and membership revenue up 8% to RMB 4.8 billion. Adjusted EBITDA rose 5% to RMB 3.3 billion, while net profit reached RMB 2.5 billion.
• IP-driven businesses—including concerts, merchandise, digital albums, and artist-related services—continued to deliver strong double-digit growth. Management expects these diversified monetization channels to provide relatively steady growth despite competitive pressure on subscriptions and advertising.
• The consolidation of Ximalaya contributed approximately RMB 0.4 billion in Q2 revenue and expands Tencent Music into a broader music-and-audio platform. Management highlighted potential long-term synergies from audiobooks, podcasts, children’s content, advertising, shared technology, and richer SVIP benefits.
• Competition and weaker traffic trends moderated underlying music subscription growth, particularly among casual and light users, while advertising faced macroeconomic and market headwinds. Management expects full-year operating expenses to rise modestly, net profit margin to come under slight pressure due partly to higher interest expense, and second-half gross margin to decline slightly year over year.
• Tencent Music ended the quarter with RMB 44.2 billion in cash, deposits, and short-term investments and repurchased 43.5 million ADSs for USD 400 million during Q2. Management said it remains on track to complete the existing USD 1 billion buyback program and is preparing for a potential new repurchase plan.

Tencent Music Entertainment Group Stock Performance

Shares of NYSE TME opened at $8.48 on Thursday. The company has a debt-to-equity ratio of 0.06, a current ratio of 2.09 and a quick ratio of 2.08. The firm has a fifty day moving average price of $8.97 and a 200-day moving average price of $10.80. The stock has a market cap of $13.35 billion, a PE ratio of 10.47, a price-to-earnings-growth ratio of 1.32 and a beta of 0.84. Tencent Music Entertainment Group has a 1 year low of $7.94 and a 1 year high of $26.70.

Analyst Ratings Changes

TME has been the subject of several analyst reports. JPMorgan Chase & Co. dropped their price target on shares of Tencent Music Entertainment Group from $12.00 to $10.00 and set a “neutral” rating for the company in a research report on Thursday, May 14th. Zacks Research raised shares of Tencent Music Entertainment Group from a “strong sell” rating to a “hold” rating in a research note on Tuesday, May 19th. China Renaissance cut Tencent Music Entertainment Group from a “buy” rating to a “hold” rating and set a $9.30 target price on the stock. in a research note on Wednesday. Nomura set a $10.00 price target on Tencent Music Entertainment Group and gave the company a “neutral” rating in a research report on Thursday. Finally, UBS Group set a $15.00 price objective on shares of Tencent Music Entertainment Group in a report on Wednesday. Three analysts have rated the stock with a Buy rating and ten have given a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $17.21.

Institutional Investors Weigh In On Tencent Music Entertainment Group

A number of hedge funds have recently bought and sold shares of the business. Royal Bank of Canada boosted its stake in shares of Tencent Music Entertainment Group by 9.0% during the 1st quarter. Royal Bank of Canada now owns 144,475 shares of the company’s stock worth $2,082,000 after purchasing an additional 11,979 shares during the period. AQR Capital Management LLC grew its stake in Tencent Music Entertainment Group by 107.5% in the first quarter. AQR Capital Management LLC now owns 85,450 shares of the company’s stock valued at $1,231,000 after purchasing an additional 44,265 shares during the last quarter. Jones Financial Companies Lllp purchased a new position in shares of Tencent Music Entertainment Group in the 1st quarter worth approximately $985,000. Acadian Asset Management LLC increased its position in shares of Tencent Music Entertainment Group by 385,900.0% during the first quarter. Acadian Asset Management LLC now owns 50,180 shares of the company’s stock worth $722,000 after purchasing an additional 50,167 shares in the last quarter. Finally, EverSource Wealth Advisors LLC increased its position in Tencent Music Entertainment Group by 83.0% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 3,005 shares of the company’s stock valued at $59,000 after buying an additional 1,363 shares in the last quarter. Hedge funds and other institutional investors own 24.32% of the company’s stock.

About Tencent Music Entertainment Group

Tencent Music Entertainment Group (NYSE: TME) is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent’s music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.