NYSE:TME

Stock Analysis Report

Tencent Music Entertainment Group

Executive Summary

Tencent Music Entertainment Group operates online music entertainment platforms that provides music streaming, online karaoke, and live streaming services in the People’s Republic of China.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Tencent Music Entertainment Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TME has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.6%

TME

0.4%

US Entertainment

0.5%

US Market


1 Year Return

-24.7%

TME

21.7%

US Entertainment

20.3%

US Market

Return vs Industry: TME underperformed the US Entertainment industry which returned 21.7% over the past year.

Return vs Market: TME underperformed the US Market which returned 20.3% over the past year.


Shareholder returns

TMEIndustryMarket
7 Day-5.6%0.4%0.5%
30 Day-8.2%2.6%2.0%
90 Day3.1%7.3%9.4%
1 Year-24.7%-24.7%22.6%21.7%22.8%20.3%
3 Yearn/a56.9%51.8%50.1%40.4%
5 Yearn/a94.6%82.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is Tencent Music Entertainment Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tencent Music Entertainment Group undervalued compared to its fair value and its price relative to the market?

43.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TME ($12.73) is trading below our estimate of fair value ($22.47)

Significantly Below Fair Value: TME is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TME is poor value based on its PE Ratio (69.7x) compared to the Entertainment industry average (25x).

PE vs Market: TME is poor value based on its PE Ratio (69.7x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: TME is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: TME is overvalued based on its PB Ratio (3.5x) compared to the US Entertainment industry average (2.5x).


Next Steps

Future Growth

How is Tencent Music Entertainment Group forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

26.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TME's forecast earnings growth (26.5% per year) is above the savings rate (1.7%).

Earnings vs Market: TME's earnings (26.5% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TME's revenue (19.5% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: TME's revenue (19.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TME's Return on Equity is forecast to be low in 3 years time (12.8%).


Next Steps

Past Performance

How has Tencent Music Entertainment Group performed over the past 5 years?

-36.4%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: TME has a large one-off loss of CN¥1.6B impacting its September 30 2019 financial results.

Growing Profit Margin: TME's current net profit margins (8.8%) are lower than last year (18.9%).


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if TME's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: TME's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TME had negative earnings growth (-36.4%) over the past year, making it difficult to compare to the Entertainment industry average (-8.9%).


Return on Equity

High ROE: TME's Return on Equity (5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tencent Music Entertainment Group's financial position?


Financial Position Analysis

Short Term Liabilities: TME's short term assets (CN¥25.3B) exceed its short term liabilities (CN¥7.6B).

Long Term Liabilities: TME's short term assets (CN¥25.3B) exceed its long term liabilities (CN¥674.0M).


Debt to Equity History and Analysis

Debt Level: TME is debt free.

Reducing Debt: TME has not had any debt for past 5 years.

Debt Coverage: TME has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TME has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TME has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TME's debt is covered by short term assets.


Next Steps

Dividend

What is Tencent Music Entertainment Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate TME's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TME's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TME's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TME's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TME's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.6yrs

Average board tenure


CEO

Cussion Pang (45yo)

Mr. Pang Cussion serves as the Chief Executive Officer of Tencent Music Entertainment Group and has been its Director since May 2014. Prior to joining us, Mr. Pang served as a corporate vice president of T ...


Board Members

NamePositionTenureCompensationOwnership
Kar Shun Pang
CEO & Director0yrsno datano data
Zhenyu Xie
President5.8yrsno data3.99% CN¥830.0m
Chi Ping Lau
Director3.6yrsno datano data
James Mitchell
Director1.2yrsno datano data
Edith Manling Ngan
Independent Director1.2yrsno datano data
Brent Richard Irvin
Director3.6yrsno datano data
Liang Tang
Independent Director5.8yrsno datano data
Tak-Wai Wong
Independent Director3.6yrsno datano data
Tao Sang Tong
Chairman of the Board0yrsno datano data

3.6yrs

Average Tenure

45yo

Average Age

Experienced Board: TME's board of directors are considered experienced (3.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.9%.


Top Shareholders

Company Information

Tencent Music Entertainment Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tencent Music Entertainment Group
  • Ticker: TME
  • Exchange: NYSE
  • Founded: 2012
  • Industry: Movies and Entertainment
  • Sector: Media
  • Market Cap: US$20.815b
  • Shares outstanding: 1.64b
  • Website: https://www.tencentmusic.com

Number of Employees


Location

  • Tencent Music Entertainment Group
  • Matsunichi Building
  • 17th Floor
  • Shenzhen
  • Guangdong Province
  • 518057
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TMENYSE (New York Stock Exchange)YesSPON ADSUSUSDDec 2018

Biography

Tencent Music Entertainment Group operates online music entertainment platforms that provides music streaming, online karaoke, and live streaming services in the People’s Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover and listen to music in personalized ways; and WeSing, which enables users to have fun by singing and interacting with friends, sharing their singing performances with friends, and discovering songs that others have sung. The company also operates Kugou Live and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with those interested in their performance. In addition, it sells music-related merchandise, including Kugou M1 headsets, smart speakers, WeSing karaoke microphones, and Hi-Fi systems; and offers online music event ticketing services, as well as services to smart device and automobile makers to build and operate music services on devices and vehicles. The company was formerly known as China Music Corporation. The company was incorporated in 2012 and is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 03:11
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.