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    700   KYG875721634

TENCENT HOLDINGS LIMITED

(700)
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Delayed Hong Kong Stock Exchange  -  04:08 2022-10-06 am EDT
277.80 HKD   -0.43%
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Tencent Music's revenue beats view as more Chinese users pay for songs

08/15/2022 | 04:11pm EDT

Aug 16 (Reuters) - China's Tencent Music Entertainment Group bettered quarterly revenue estimates on Monday as a slate of original content helped its music streaming platform attract more paying users.

The company's U.S. shares rose 5.9% in extended trading after it said users who paid for online music jumped by a quarter to 82.7 million. Music subscription revenue of the platform that operates like Spotify rose 18%.

Tencent Music also benefited from a push for original content, including a partnership with parent Tencent Holdings to produce songs from popular game titles.

Its total revenue was 6.91 billion yuan ($1.02 billion) in the second quarter ended June 30, compared with the 6.62 billion yuan expected by analysts, according to Refinitiv IBES data.

Cheuk Tung Yip, Tencent Music's chief strategy officer, said in a call with analysts on Tuesday that the company will continue to build up its paywall to drive up revenue.

"We expect more content partners will be added to the paywall in the second half," he said, adding the company was also committed to catering to non-paying users, who help generate about 10% of its advertising revenue.

Tencent Music's overall revenue, however, fell 13.8% from the same quarter of last year, showing that stiff competition and an economic slowdown sparked by Beijing's zero-COVID policy were weighing on the music business.

Revenue also fell 20% in the social entertainment business - the company's biggest revenue driver and home to its karaoke app WeSing and live concert platform Kuwo Music.

Tencent Music has been in the crosshairs of regulators and was forced last year to end its exclusive contracts with big music labels, eroding its advantage against rivals such as Cloud Music and Bytedance-owned short-video sharing platform Douyin.

Yip, though, said the company is seeing a moderate recovery from advertisers in the second half in China as COVID-19 outbreaks in the big cities such as Shanghai and Beijing had been brought under control. He listed e-commerce, consumer staples and auto as industries experiencing growing demand.

Excluding items, Tencent Music earned 0.63 yuan per American depository share (ADS) for the quarter, above estimates of 0.56 yuan per ADS. ($1 = 6.7715 Chinese yuan renminbi) (Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni and Muralikumar Anantharaman)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
SPOTIFY TECHNOLOGY S.A. 0.87% 92.255 Delayed Quote.-60.95%
TENCENT HOLDINGS LIMITED -0.43% 277.8 Delayed Quote.-38.92%
TENCENT MUSIC ENTERTAINMENT GROUP -0.79% 4.415 Delayed Quote.-35.04%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) 0.14% 7.0797 Delayed Quote.11.23%
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Analyst Recommendations on TENCENT HOLDINGS LIMITED
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Financials
Sales 2022 568 B 79 793 M 79 793 M
Net income 2022 101 B 14 174 M 14 174 M
Net cash 2022 76 897 M 10 809 M 10 809 M
P/E ratio 2022 23,7x
Yield 2022 0,40%
Capitalization 2 372 B 333 B 333 B
EV / Sales 2022 4,04x
EV / Sales 2023 3,41x
Nbr of Employees 110 715
Free-Float 63,2%
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Mean consensus BUY
Number of Analysts 55
Last Close Price 251,76 CNY
Average target price 382,05 CNY
Spread / Average Target 51,7%
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Managers and Directors
Hua Teng Ma Executive Chairman & Chief Executive Officer
Chi Ping Lau Chief Strategy & Investment Officer
Shek Hon Lo Chief Financial Officer & Senior Vice President
Chen Ye Xu Chief Information Officer
Yu Xin Ren COO & President-Interactive Entertainment Group
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