Music streaming division of Chinese technology giant
We recorded mixed results for the second quarter of Tuesday, including profits above consensus.
It faces regulatory headwinds in the broader crackdown across China’s tech sector, dropping more than 13% in New York.Outperformed the decline seen in US-listed stocks of China’s Big Tech Group
Tencent fell by about 3% to 5%.
Inside story. Tencent’s music streaming division was released in 2018
Through Mutual Ownership — Spotify owns about 9% of Tencent Music. Most Tencent Music users listen for free, unlike their Swedish peers, who rely on a subscriber base that pays for premium services. Tencent also offers a wide range of products, including four very popular Chinese mobile music apps, including a profitable karaoke app.
Tencent Music It ’s doing well every quarter, With recent regulatory crackdowns, equities are under pressure on the broader Chinese tech sector. For the past month, Strict government oversight In areas such as technology, education, healthcare and real estate Significant fall in Chinese stocksIncludes companies with US listed stocks such as Tencent Music.In particular, the major headwinds faced by music groups include a ruling from July. Prohibit parent company from owning exclusive music– –License agreement With global label.
Tencent Music’s share price has fallen by more than 60% so far in 2021.
what’s new. The music streaming group mixed in the second quarter of 2021 on Tuesday with strong results, with total sales of RMB8.01 billion ($ 1.23 billion) and RMB8.1 billion, which is an estimate by Wall Street. Is slightly below. Earnings per share was RMB 240,000, below the expected RMB 560,000, but overall, net income of RMB 871 million exceeded the estimate of RMB 864 million.
Online music service revenue increased by nearly 33% year-on-year, with music subscription revenues increasing by more than 36% to RMB1.79 billion. Tencent Music has reached 66.2 million paying online music users, recording nearly 41% annual growth.
Fusion Pang, executive chair at Tencent Music, said:
“While this decision is expected to have some impact on business operations, we will continue to promote innovation, fulfill our social responsibilities, provide better service to our users, and promote the long-term and sound development of digital. We’re sticking to our goals, the music industry, “Pan added.
Future outlook. Tencent Music’s results were good, but the timing was off.As a Chinese market regulator, another sale hit China’s tech sector on Tuesday Issued draft rules for strengthening management About competition and handling of user data. Tencent Music’s stake, still upset by copyright decisions affecting operations, has been overwhelmed by additional pressure.
Citi analysts expect Group stocks to remain “unexpectedly rangebound” due to a number of negative outlook factors, including regulatory requirements. However, investment banks give stocks a purchase rating at a target price of $ 12 stock. Trading for about $ 8 today could be an opportunity to buy. However, the regulatory situation in China remains uncertain, so investors need to be careful.
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Tencent Music’s revenue is above expectations. The reason why stock prices are falling.
Source link Tencent Music’s revenue is above expectations. The reason why stock prices are falling.