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<Research> CMBI Cuts Tencent Music Entertainment Group (TME.US) TP to USD17.5, Rates Buy
Recommend 5 Positive 2 Negative 3 |
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CMBI issued a research report stating that TME-SW (01698.HK)'s results for 1Q26 were in line with expectations. During the period, total revenue rose 7% YoY to RMB7.9 billion, while non-IFRS net profit increased 7% YoY to RMB2.27 billion. The broker noted that music-related businesses maintained resilient growth. Driven by the expansion of the SVIP program, membership service revenue grew 7% YoY, while revenue from social entertainment and other businesses declined 11% YoY. Looking ahead to 2Q26, the broker expects total revenue to increase 3% YoY to RMB8.73 billion, with growth slowing mainly due to churn among casual users amid intense competition. However, Tencent Music Entertainment Group's acquisition of Ximalaya has received regulatory approval and is expected to be completed in 2H26, which will further enrich the company's audio product portfolio and enhance user experience. Considering competitive pressures, CMBI slightly lowered its revenue forecasts for 20262028. Based on a discounted cash flow (DCF) valuation, it cut the US share TP for Tencent Music Entertainment Group (TME.US) from USD20 to USD17.5 and maintained a Buy rating, believing the current valuation offers an attractive risk-reward profile. (da/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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