Tencent Music -SW(01698) shares rose by 5%, and its profitability significantly enhanced the rapid growth of online music revenue.
The share price of Tencent Music -SW(01698) rose by more than 5% to HK$ 47.2, setting a new high for listing. Up to now, the share price rose by 5.74% to HK$ 46.95, with a turnover of HK$ 6,689,700.
The company’s recently released annual results for 2023 show that the total revenue reached 27.75 billion yuan; The profit attributable to shareholders was 4.92 billion yuan, a year-on-year increase of 33.8%. Online music service revenue increased by 38.8% year-on-year to 17.33 billion yuan (about 2.44 billion US dollars). Bank of America Securities believes that thanks to the growth of music paying users and ARPU improvement, Tencent Music’s performance in the last quarter was steady, exceeding market expectations. It is expected that the core music business will continue to grow this year.
Goldman Sachs said that Tencent Music has been one of the best performing companies in the China market in the past six months, and it is expected that it will continue to perform well in 2024. This is mainly due to the operating leverage effect brought by the high incremental profits of the company’s music subscription and advertising business, which promotes the upward adjustment of profit forecast; After the New Year promotion, the average income per paying user (ARPPU) recovered, which helped the music service income to further increase; At the same time, the structural improvement of music willingness to pay, coupled with Tencent Music’s constantly optimized monetization strategy, will jointly promote the company’s development.
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