NYSE:TME

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Tencent Music Entertainment Group

Market Cap

US$25.8b

Last Updated

2021/06/25 00:10 UTC

Data Sources

Company Financials +

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. More Details


Snowflake Analysis

Excellent 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 is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: TME's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

2.6%

TME

2.9%

US Entertainment

1.3%

US Market


1 Year Return

15.1%

TME

44.5%

US Entertainment

42.4%

US Market

Return vs Industry: TME underperformed the US Entertainment industry which returned 42.8% over the past year.

Return vs Market: TME underperformed the US Market which returned 42.6% over the past year.


Shareholder returns

TMEIndustryMarket
7 Day2.6%2.9%1.3%
30 Day1.9%4.0%2.8%
90 Day-22.1%5.6%7.2%
1 Year15.1%15.1%44.7%44.5%44.7%42.4%
3 Yearn/a79.0%76.7%64.6%54.4%
5 Yearn/a153.6%143.3%126.8%101.3%

Long-Term 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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TME ($15.23) is trading below our estimate of fair value ($32.17)

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 (39.1x) compared to the US Entertainment industry average (35.5x).

PE vs Market: TME is poor value based on its PE Ratio (39.1x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: TME is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: TME is good value based on its PB Ratio (3.2x) compared to the US Entertainment industry average (4.9x).


Future Growth

How is Tencent Music Entertainment Group forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

33.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TME's forecast earnings growth (33.6% per year) is above the savings rate (2%).

Earnings vs Market: TME's earnings (33.6% per year) are forecast to grow faster than the US market (15.7% per year).

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

Revenue vs Market: TME's revenue (15.3% per year) is forecast to grow faster than the US market (9.5% per year).

High Growth Revenue: TME's revenue (15.3% 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 (10.3%).


Past Performance

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

40.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TME has high quality earnings.

Growing Profit Margin: TME's current net profit margins (13.7%) are lower than last year (14.9%).


Past Earnings Growth Analysis

Earnings Trend: TME's earnings have grown significantly by 40.3% per year over the past 5 years.

Accelerating Growth: TME's earnings growth over the past year (8%) is below its 5-year average (40.3% per year).

Earnings vs Industry: TME earnings growth over the past year (8%) underperformed the Entertainment industry 32.9%.


Return on Equity

High ROE: TME's Return on Equity (8.1%) 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¥29.0B) exceed its short term liabilities (CN¥9.5B).

Long Term Liabilities: TME's short term assets (CN¥29.0B) exceed its long term liabilities (CN¥5.9B).


Debt to Equity History and Analysis

Debt Level: TME's debt to equity ratio (9.9%) 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 (109.3%).

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?

0.9yrs

Average management tenure


CEO

Ross Zhu

0.17

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 ( 0.9 years average tenure), which suggests a new team.


Board Members

Experienced Board: TME's board of directors are not considered experienced ( 2.5 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 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$25.778b
  • 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


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 Mu...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/25 00:10
End of Day Share Price2021/06/24 00:00
Earnings2021/03/31
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.