According to Nomura's research report, Tencent Music (TME.US)      's 1Q25 revenue grew by 9% YoY to RMB7.4 billion, exceeding the market's and the broker's forecasts by 1% and 2%, respectively, primarily due to the smaller-than-expected decline in social entertainment services and other business revenues.

Tencent Music's GPM also met Nomura's and the market's expectations with an increase of 3.1 ppts YoY to 44%. Coupled with strict operational expense control, the company's non-IFRS operating profit margin rose by 3.7 ppts YoY to 31%.

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As suggested by the report, Tencent Music's music subscription revenue growth was on track. Its average revenue per paying user (ARPPU) remained solid under the effective promotion of the SVIP membership program.

Nomura largely maintained its 2025-26 earnings estimates for Tencent Music. It also kept the rating as Buy and a target price of USD17.2.
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