Tencent Music downgraded to Neutral from Buy at UBS

UBS downgraded Tencent Music (TME) to Neutral from Buy with a price target of $13, down from $26. Despite a revenue beat in Q4, the firm is turning more conservative on Tencent Music’s near-term growth outlook amid rising competition concerns and AI disruption risks, the analyst tells investors. Continued strong user growth on emerging platforms like Soda Music limits Tencent Music’s ability to grow basic subscribers and raise ARPPU, while the rise of AI-generated music further introduces uncertainties, the analyst added.