Tencent Music (TME, Financial) experienced a significant rise, up 9%, following impressive first-quarter results. As a key player in China's online music and audio entertainment sector, the company surpassed expectations with its earnings per share (EPS) and revenue figures.
Here's a breakdown of the financial performance:
- Overall revenue saw a slight decline of 3.4% year-over-year to RMB6.77 billion (US$937 million).
- Online music services revenue, however, jumped 43% to US$693 million, fueled by an increase in music subscription revenues and advertising services.
- The number of online music paying users grew by 20.2% year-over-year to 113.5 million, marking the largest sequential increase with an addition of 6.8 million users.
- Subscription revenue from music alone surged 39.2% to US$501 million, driven by enhanced membership benefits, expanded content, and new interactive features.
- Tencent Music leveraged the Chinese New Year for targeted promotions, which boosted user acquisition significantly.
- Despite the success in music, the social entertainment services unit underperformed, with revenue halving to US$244 million due to regulatory adjustments and heightened competition.
Investors responded positively to Tencent Music's robust performance in its online music segment, overlooking the weaker results from its social entertainment services. The stock has maintained a strong uptrend since early October, reaching a new high over two years following this earnings report.
