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<Research>UBS Drops Tencent Music Entertainment Group (TME.US) TP to US$26, Expects Non-subscription Biz to Pressure on Profit Margins
Recommend 5 Positive 2 Negative 8 |
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TME-SW (01698.HK) performed better than expected in terms of 3Q25 revenue and earnings, with non-subscription business remaining strong and subscription business developing orderly, according to UBS' research report. It is expected that non-subscription music business growth will surpass subscription business in 2026, but it may pressure profit margins, compounded by increased personnel and marketing expenses to support new businesses and content. UBS believed that TME-SW, with its diversified business portfolio and solid market leadership, retains solid long-term potential, though it may face short-term pressure due to profit margin headwinds. The broker raised its 4Q25/ 2026 revenue forecasts by 0.9%/ 1% respectively, with 2026 revenue/ non-GAAP net profit expected to rise by 12.7%/ 12% YoY. Therefore, UBS dropped its target price for Tencent Music Entertainment Group (TME.US) from US$30 to US$26, with rating kept at Buy. AASTOCKS Financial News Website: www.aastocks.com |
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