Tencent Music Entertainment Group Class A (1698) AI Stock Analysis

• Market Cap: HK$252.99B
• Dividend Yield: N/A
• Average Volume (3M): 950.24K
• Price to Earnings (P/E): 25.0
• Beta (1Y): 1.15
• Revenue Growth: 13.62%
• EPS Growth: 80.52%
• Country: HK
• Employees: 5,353
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.75
• Shares Outstanding: 1,432,859,700
• 10 Day Avg. Volume: 903,442
• 30 Day Avg. Volume: 950,242
• PEG Ratio: 0.54
• Price to Book (P/B): 1.89
• Price to Sales (P/S): 4.52
• P/FCF Ratio: 13.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$102.34
• Price Target Upside: 38.02% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: HK$83.00 ▲(11.94% Upside)

Tencent Music Entertainment Group's overall stock score reflects strong financial performance and positive earnings call results, which are offset by bearish technical indicators and moderate valuation. The company's robust growth in music subscriptions and strategic partnerships are significant strengths, while challenges in social entertainment and technical bearishness present risks.

Tencent Music Entertainment Group Class A Business Overview & Revenue Model

Company Description

Tencent Music Entertainment Group Class A (1698) is a leading online music entertainment platform in China, operating through its subsidiaries. The company primarily focuses on music streaming services, social entertainment, and content distribution. Its core products include popular music streaming applications such as QQ Music, Kugou, and Kuwo, which offer a wide range of music content, social features, and live streaming services. Tencent Music also engages in the licensing of music content and artist management, making it a prominent player in the digital music landscape.

How the Company Makes Money

Tencent Music generates revenue through several key streams. The primary source is subscription services, where users pay for premium memberships to access ad-free music, offline listening, and exclusive content. Additionally, the company earns revenue from advertising on its free-tier services, which attracts a large user base. Another significant revenue stream comes from the licensing of music rights to other platforms and the sale of digital albums and songs. Tencent Music also monetizes live streaming events and social features, including virtual gifts and in-app purchases. Partnerships with major music labels and artists enhance its content library and distribution capabilities, further driving its revenue growth.

Tencent Music Entertainment Group Class A Financial Statement Overview

Summary

Tencent Music Entertainment Group demonstrates strong financial health and operational efficiency. The company has achieved notable profitability improvements, maintained a robust balance sheet, and efficiently managed cash flows, indicating a stable and growing financial outlook.

Income Statement

Tencent Music Entertainment Group has shown strong growth in profitability, with gross and net profit margins improving significantly. The TTM gross profit margin stands at 43.11% and net profit margin at 32.81%. Over the past year, the company achieved a revenue growth rate of 2.07%, indicating stable expansion. The EBIT and EBITDA margins also reflect robust operational efficiency at 39.97% and 40.54%, respectively.

Balance Sheet

The company maintains a strong financial position with a low debt-to-equity ratio of 0.08, indicating minimal leverage. The equity ratio is solid at 74.67%, showcasing a strong equity base. Return on equity has improved to 12.99% in the TTM, reflecting enhanced shareholder returns. The balance sheet demonstrates stability, although the equity ratio trend suggests a need for cautious leverage management.

Cash Flow

Cash flow analysis reveals a strong conversion of operating cash flow to net income with a ratio of 1.06, indicating efficient cash generation relative to profits. The free cash flow growth rate is slightly negative at -1.81%, yet the free cash flow to net income ratio remains healthy at 0.95, suggesting good cash flow management despite minor fluctuations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	30.27B	28.40B	27.75B	28.34B	31.24B	29.15B
Gross Profit	13.23B	12.03B	9.79B	8.77B	9.40B	9.30B
EBITDA	12.50B	9.81B	7.17B	5.65B	4.75B	5.55B
Net Income	10.24B	6.64B	4.92B	3.68B	3.03B	4.16B
Balance Sheet
Total Assets	107.87B	90.44B	75.54B	67.01B	67.25B	68.27B
Cash, Cash Equivalents and Short-Term Investments	22.20B	27.21B	23.54B	20.88B	20.43B	26.02B
Total Debt	6.04B	6.05B	6.05B	5.96B	5.36B	5.50B
Total Liabilities	21.50B	20.72B	18.33B	17.88B	16.20B	15.54B
Stockholders Equity	83.88B	67.86B	55.91B	48.10B	50.32B	52.24B
Cash Flow
Free Cash Flow	8.48B	9.24B	6.17B	6.43B	2.48B	4.38B
Operating Cash Flow	8.80B	10.28B	7.34B	7.48B	5.24B	4.88B
Investing Cash Flow	-5.87B	-6.82B	-1.86B	-1.45B	-6.00B	-14.21B
Financing Cash Flow	-4.21B	-3.83B	-1.54B	-3.42B	-3.71B	5.29B

Tencent Music Entertainment Group Class A Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 74.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1698, the sentiment is Negative. The current price of 74.15 is below the 20-day moving average (MA) of 85.62, below the 50-day MA of 90.36, and above the 200-day MA of 72.69, indicating a neutral trend. The MACD of -3.51 indicates Positive momentum. The RSI at 26.60 is Positive, neither overbought nor oversold. The STOCH value of 5.85 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1698.

Tencent Music Entertainment Group Class A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1024	75 Outperform	HK$290.92B	16.42	25.22%	―	10.72%	17.05%
1698	70 Outperform	HK$252.99B	24.97	14.50%	―	13.62%	80.52%
9888	66 Neutral	HK$335.25B	11.49	10.28%	―	-1.69%	42.04%
9898	65 Neutral	HK$20.59B	7.67	10.70%	8.02%	0.99%	14.41%
0772	61 Neutral	$43.27B	300.00	0.67%	―	-10.26%	-85.75%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
1896	49 Neutral	HK$8.16B	99.43	0.82%	4.37%	-7.61%	-90.51%

Tencent Music Entertainment Group Class A Corporate Events

Tencent Music Reports Strong Q3 2025 Financial Results

Tencent Music Entertainment Group announced a strong financial performance for the third quarter of 2025, with total revenues reaching RMB8.46 billion, marking a 20.6% year-over-year increase. The growth was driven by a 27.2% rise in online music services revenues and a 17.2% increase in music subscription revenues. The company’s net profit attributable to equity holders grew by 36.0% year-over-year, demonstrating robust financial health. TME’s strategic focus on content enrichment and service expansion, particularly in live experiences, has bolstered its subscription revenue growth and strengthened its position in the music industry.

The most recent analyst rating on (HK:1698) stock is a Buy with a HK$110.70 price target. To see the full list of analyst forecasts on Tencent Music Entertainment Group Class A stock, see the HK:1698 Stock Forecast page.

Tencent Music Sets Date for Q3 2025 Earnings Release

Tencent Music Entertainment Group announced the date for its third quarter 2025 earnings release, which was submitted to the U.S. Securities and Exchange Commission via a Form 6-K. This announcement is part of the company’s regulatory compliance with the Hong Kong Stock Exchange, where it is also listed. The release of the earnings date is an important event for stakeholders as it provides insights into the company’s financial performance and strategic direction.

The most recent analyst rating on (HK:1698) stock is a Buy with a HK$110.00 price target. To see the full list of analyst forecasts on Tencent Music Entertainment Group Class A stock, see the HK:1698 Stock Forecast page.

Tencent Music to Announce Q3 2025 Results on November 12

Tencent Music Entertainment Group announced that its board of directors will review and vote on the company’s unaudited third-quarter results for the period ending September 30, 2025. The results will be published on November 12, 2025, after the Hong Kong market closes and before the U.S. market opens, potentially impacting stakeholders’ expectations and market positioning.

The most recent analyst rating on (HK:1698) stock is a Buy with a HK$110.00 price target. To see the full list of analyst forecasts on Tencent Music Entertainment Group Class A stock, see the HK:1698 Stock Forecast page.