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Tencent Music Entertainment Group
NYSE:TME

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Tencent Music Entertainment Group Logo
Tencent Music Entertainment Group
NYSE:TME
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Price: 11.06 USD -0.09% Market Closed
Updated: Mar 28, 2024

Intrinsic Value

Tencent Music Entertainment Group engages in the operation of an online music entertainment platform. [ Read More ]

The intrinsic value of one TME stock under the Base Case scenario is 9.66 USD. Compared to the current market price of 11.06 USD, Tencent Music Entertainment Group is Overvalued by 13%.

Key Points:
TME Intrinsic Value
Base Case
9.66 USD
Overvaluation 13%
Intrinsic Value
Price
Worst Case
Base Case
Best Case

Valuation Backtest
Tencent Music Entertainment Group

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Fundamental Analysis

Record Profitability and Growth Outlook
2023-Q4 Earnings Call

Record Profitability and Growth Outlook

The company reached historic profitability with a net profit of RMB 5.2 billion and non-IFRS net profit of RMB 6.2 billion. In 2023, they foresee robust growth in the music industry, focusing on effective monetization, operational efficiency, and expansion into new areas like AIGC technology. The online music business saw a 39% year-over-year growth in revenue from subscriptions, reaching 107 million monthly subscribers. The user profile is concentrated in China's Tier 1-3 cities, predominantly aged 20-30. They are fully integrating long-form audio into their platforms, aiming to bolster its in-car market presence and dubbing 2023 the 'year of transformation' for this segment. There's an expectation of rising gross margins in Q1 2024, after a 5.3% year-over-year increase to 38.3% in Q4 due to rising subscription and advertising revenues, along with efficient content cost management.

Financials

Balance Sheet Decomposition
Tencent Music Entertainment Group

Current Assets 29.9B
Cash & Short-Term Investments 23.5B
Receivables 2.9B
Other Current Assets 3.5B
Non-Current Assets 45.6B
Long-Term Investments 11.1B
PP&E 3.3B
Intangibles 21.6B
Other Non-Current Assets 9.6B
Current Liabilities 12B
Accounts Payable 5B
Other Current Liabilities 7B
Non-Current Liabilities 7.6B
Long-Term Debt 5.9B
Other Non-Current Liabilities 1.7B
Efficiency

Earnings Waterfall
Tencent Music Entertainment Group

Revenue
27.8B CNY
Cost of Revenue
-18B CNY
Gross Profit
9.8B CNY
Operating Expenses
-5B CNY
Operating Income
4.8B CNY
Other Expenses
143m CNY
Net Income
4.9B CNY

Free Cash Flow Analysis
Tencent Music Entertainment Group

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3-Years Average
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Fundamental Scores

TME Profitability Score
Profitability Due Diligence

Tencent Music Entertainment Group's profitability score is 54/100. The higher the profitability score, the more profitable the company is.

Positive Free Cash Flow
Positive Gross Profit
Positive Revenue Growth Forecast
Positive Net Income
54/100
Profitability
Score

Tencent Music Entertainment Group's profitability score is 54/100. The higher the profitability score, the more profitable the company is.

TME Solvency Score
Solvency Due Diligence

Tencent Music Entertainment Group's solvency score is 69/100. The higher the solvency score, the more solvent the company is.

Negative Net Debt
Long-Term Solvency
Low D/E
Short-Term Solvency
69/100
Solvency
Score

Tencent Music Entertainment Group's solvency score is 69/100. The higher the solvency score, the more solvent the company is.

Wall St
Price Targets

TME Price Targets Summary
Tencent Music Entertainment Group

Wall Street analysts forecast TME stock price to drop over the next 12 months.

According to Wall Street analysts, the average 1-year price target for TME is 10.2 USD with a low forecast of 8.08 USD and a high forecast of 13.65 USD.

Lowest
Price Target
8.08 USD
27% Downside
Average
Price Target
10.2 USD
8% Downside
Highest
Price Target
13.65 USD
23% Upside
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View Analyst Estimates

Competitive Landscape

Shareholder Return

TME Price
Tencent Music Entertainment Group

1M 1M
+8%
6M 6M
+78%
1Y 1Y
+37%
3Y 3Y
-46%
5Y 5Y
-36%
10Y 10Y
-21%
Annual Price Range
11.06
52w Low
6.02
52w High
11.69
Price Metrics
Average Annual Return -2.97%
Standard Deviation of Annual Returns 53.12%
Max Drawdown -90%
Shares Statistics
Market Capitalization 19B USD
Shares Outstanding 1 716 080 000
Percentage of Shares Shorted 1.83%

TME Return Decomposition
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TME News

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Last Important Events
Tencent Music Entertainment Group

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Sentiment Analysis
Tencent Music Entertainment Group

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Company Profile

Tencent Music Entertainment Group Logo
Tencent Music Entertainment Group

Country

China

Industry

Media

Market Cap

19B USD

Dividend Yield

0%

Description

Tencent Music Entertainment Group engages in the operation of an online music entertainment platform. The company is headquartered in Shenzhen, Guangdong. The company went IPO on 2018-12-12. The firm's platform comprises online music, online karaoke and music-centric live streaming services, supported by content offerings, technology and data. The firm's main platform includes QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, Kuwo Live and others.

Contact

GUANGDONG
Shenzhen
Unit 3, Building D, Kexing Science Park, Kejizhongsan Avenue, Hi-Tech Park
+8675586013388.0
https://www.tencentmusic.com/

IPO

2018-12-12

Employees

4 769

Officers

Executive Chairman
Mr. Kar Shun Pang
CEO & Director
Mr. Zhu Liang
President, CTO & Director
Mr. Zhenyu Xie
Chief Financial Officer
Ms. Min Hu
Group VP & Head of Content Cooperation Business
Mr. Tsai Chun Pan
Group Vice President & Head of Kugou Business Unit
Ms. Linlin Chen

See Also

Discover More
What is the Intrinsic Value of one TME stock?

The intrinsic value of one TME stock under the Base Case scenario is 9.66 USD.

Is TME stock undervalued or overvalued?

Compared to the current market price of 11.06 USD, Tencent Music Entertainment Group is Overvalued by 13%.