TME

Tencent Music Entertainment GroupNYSE:TME Stock Report

Market Cap

US$13.5b

7D

-8.4%

1Y

-49.5%

Updated

16 Sep, 2021

Data

Company Financials +
TME fundamental analysis
Snowflake Score
Valuation5/6
Future Growth4/6
Past Performance2/6
Financial Health5/6
Dividends0/6

TME Overview

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.

Tencent Music Entertainment Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Tencent Music Entertainment Group
Historical stock prices
Current Share PriceUS$7.98
52 Week HighUS$7.03
52 Week LowUS$32.25
Beta1.01
1 Month Change2.05%
3 Month Change-47.12%
1 Year Change-49.53%
3 Year Changen/a
5 Year Changen/a
Change since IPO-43.00%

Recent News & Updates

Aug 25

Tencent Music: Another China Regulations Play

Tencent Music is another US-listed Chinese company which faced tough times in the recent Chinese regulatory crackdown on all things tech in the country. However, very little is expected to fundamentally change and the company is expected to maintain their leading position in the Chinese online music industry. As a result, I believe the company will return over 15% annually to investors, far outperforming the broader market expectations.

Aug 16
Returns On Capital Are Showing Encouraging Signs At Tencent Music Entertainment Group (NYSE:TME)

Returns On Capital Are Showing Encouraging Signs At Tencent Music Entertainment Group (NYSE:TME)

What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a...

Jul 29
Should You Investigate Tencent Music Entertainment Group (NYSE:TME) At US$10.52?

Should You Investigate Tencent Music Entertainment Group (NYSE:TME) At US$10.52?

Tencent Music Entertainment Group ( NYSE:TME ) saw significant share price movement during recent months on the NYSE...

Shareholder Returns

TMEUS EntertainmentUS Market
7D-8.4%-1.3%-0.6%
1Y-49.5%29.2%33.7%

Return vs Industry: TME underperformed the US Entertainment industry which returned 25.6% over the past year.

Return vs Market: TME underperformed the US Market which returned 30.7% over the past year.

Price Volatility

Is TME's price volatile compared to industry and market?
TME volatility
TME Beta1.01
Industry Beta1.05
Market Beta1

Stable Share Price: TME is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: TME's weekly volatility (9%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20124,769Ross Zhuhttps://www.tencentmusic.com

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 Music, Kuwo Music, WeSing, QQ Music, 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; and Kuwo Changting, an audio platform that offers users various audio content, including audio books, cross-talks, radio dramas, and other entertainment.

Tencent Music Entertainment Group Fundamentals Summary

How do Tencent Music Entertainment Group's earnings and revenue compare to its market cap?
TME fundamental statistics
Market CapCN¥86.88b
Earnings (TTM)CN¥4.08b
Revenue (TTM)CN¥31.74b

21.3x

P/E Ratio

2.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TME income statement (TTM)
RevenueCN¥31.74b
Cost of RevenueCN¥21.68b
Gross ProfitCN¥10.06b
ExpensesCN¥5.98b
EarningsCN¥4.08b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)2.45
Gross Margin31.69%
Net Profit Margin12.86%
Debt/Equity Ratio9.8%

How did TME perform over the long term?

See historical performance and comparison

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TME ($8.06) is trading below our estimate of fair value ($25.88)

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


Price To Earnings Ratio

PE vs Industry: TME is good value based on its PE Ratio (21.5x) compared to the US Entertainment industry average (23.8x).

PE vs Market: TME is poor value based on its PE Ratio (21.5x) compared to the US market (17.1x).


Price to Earnings Growth Ratio

PEG Ratio: TME is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: TME is good value based on its PB Ratio (1.7x) compared to the US Entertainment industry average (3.9x).


Future Growth

How is Tencent Music Entertainment Group forecast to perform in the next 1 to 3 years based on estimates from 23 analysts?

21.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TME's forecast earnings growth (21.9% per year) is above the savings rate (2%).

Earnings vs Market: TME's earnings (21.9% per year) are forecast to grow faster than the US market (14.8% per year).

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

Revenue vs Market: TME's revenue (11.9% per year) is forecast to grow faster than the US market (9.5% per year).

High Growth Revenue: TME's revenue (11.9% 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 (7%).


Past Performance

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

37.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TME has high quality earnings.

Growing Profit Margin: TME's current net profit margins (12.9%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: TME's earnings have grown significantly by 37.3% per year over the past 5 years.

Accelerating Growth: TME's earnings growth over the past year (4.8%) is below its 5-year average (37.3% per year).

Earnings vs Industry: TME earnings growth over the past year (4.8%) underperformed the Entertainment industry 10.8%.


Return on Equity

High ROE: TME's Return on Equity (8%) is considered low.


Financial Health

How is Tencent Music Entertainment Group's financial position?


Financial Position Analysis

Short Term Liabilities: TME's short term assets (CN¥28.4B) exceed its short term liabilities (CN¥9.9B).

Long Term Liabilities: TME's short term assets (CN¥28.4B) exceed its long term liabilities (CN¥5.8B).


Debt to Equity History and Analysis

Debt Level: TME's debt to equity ratio (9.8%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if TME's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: TME's debt is well covered by operating cash flow (101.5%).

Interest Coverage: TME earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Tencent Music Entertainment Group 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 recent payouts.

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

1.1yrs

Average management tenure


CEO

Ross Zhu

0.42

Tenure

Mr. Liang Zhu also known as Ross serves as Chief Executive Officer and Director at Tencent Music Entertainment Group since April 15, 2021. Mr. Zhu served as Vice President of Tencent Holdings Limited ("Ten...


Leadership Team

Experienced Management: TME's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

Experienced Board: TME's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Tencent Music Entertainment Group's 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$13.507b
  • Shares outstanding: 1.69b
  • Website: https://www.tencentmusic.com

Number of Employees


Location

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

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/16 04:55
End of Day Share Price2021/09/15 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.