(TME) Tencent Music Entertainment - Overview
Sector: Communication Services | Industry: Internet Content & Information | Exchange: NYSE (USA) | Market Cap: 15.096m USD | Total Return: -46% in 12m
Avg Turnover: 116M
EPS Trend: 98.5%
Qual. Beats: 0
Rev. Trend: 80.0%
Qual. Beats: 0
Warnings
No concerns identified
Tailwinds
No distinct edge detected
Tencent Music Entertainment Group (TME) is the leading digital music provider in China, operating a multi-platform ecosystem that includes QQ Music, Kugou Music, Kuwo Music, and the karaoke application WeSing. The company generates revenue through a diversified model consisting of paid music subscriptions, advertising, sub-licensing, and social entertainment services such as virtual gifting during live streams.
The business leverages a freemium model common in the global streaming industry, transitioning users from ad-supported access to premium subscription tiers. Unlike many Western counterparts, TME integrates social networking and long-form audio-including podcasts and audiobooks-to increase user retention and per-user monetization across its integrated platforms.
You can find further fundamental analysis and valuation metrics on ValueRay to assist in your evaluation of the company.
- Paying subscriber growth offsets decline in social entertainment revenue streams
- Expansion of long-form audio and advertising inventory improves gross margins
- Regulatory shifts in China impact live streaming monetization and user engagement
- Strategic content licensing costs influence overall operating profitability and cash flow
- Macroeconomic conditions in China dictate consumer discretionary spending on digital entertainment
| Net Income: 8.54b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.09 > 0.02 and ΔFCF/TA -1.40 > 1.0 |
| NWC/Revenue: 55.32% < 20% (prev 53.63%; Δ 1.70% < -1%) |
| CFO/TA 0.10 > 3% & CFO 10.00b > Net Income 8.54b |
| Net Debt (-21.5b) to EBITDA (12.0b): -1.79 < 3 |
| Current Ratio: 2.09 > 1.5 & < 3 |
| Outstanding Shares: last quarter (1.56b) vs 12m ago 0.59% < -2% |
| Gross Margin: 57.00% > 18% (prev 43.11%; Δ 13.90% > 0.5%) |
| Asset Turnover: 32.90% > 50% (prev 29.56%; Δ 3.34% > 0%) |
| Interest Coverage Ratio: 72.68 > 6 (EBIT TTM 10.6b / Interest Expense TTM 146.2m) |
| A: 0.18 (Total Current Assets 34.5b - Total Current Liabilities 16.6b) / Total Assets 99.5b |
| B: 0.29 (Retained Earnings 28.5b / Total Assets 99.5b) |
| C: 0.11 (EBIT TTM 10.6b / Avg Total Assets 98.8b) |
| D: 3.27 (Book Value of Equity 74.1b / Total Liabilities 22.6b) |
| Altman-Z'' = 6.28 = AAA |
| DSRI: 1.06 (Receivables 3.81b/3.20b, Revenue 32.5b/29.0b) |
| GMI: 0.76 (GM 43.11% / 57.00%) |
| AQI: 1.00 (AQ_t 0.64 / AQ_t-1 0.64) |
| SGI: 1.12 (Revenue 32.5b / 29.0b) |
| TATA: -0.01 (NI 8.54b - CFO 10.00b) / TA 99.5b) |
| Beneish M = -3.11 (Cap -4..+1) = AA |
As of June 04, 2026, the stock is trading at USD 9.14 with a total of 10,397,645 shares traded.
Over the past week, the price has changed by -0.76%,
over one month by +0.00%,
over three months by -33.95% and
over the past year by -46.00%.
Tencent Music Entertainment has received a consensus analysts rating of 4.56. Therefore, it is recommended to buy TME.
- StrongBuy: 20
- Buy: 10
- Hold: 2
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 16 | 74.5% |
Market Cap CNY = 102b (15.1b USD * 6.7695 USD.CNY)
P/E Trailing = 10.9762
P/E Forward = 12.8535
P/S = 0.4514
P/B = 1.3766
P/EG = 1.5384
Revenue TTM = 32.5b CNY
EBIT TTM = 10.6b CNY
EBITDA TTM = 12.0b CNY
Long Term Debt = 4.54b CNY (from longTermDebt, last quarter)
Short Term Debt = 110.6m CNY (from shortTermDebt, last quarter)
Debt = 5.12b CNY (from shortLongTermDebtTotal, last quarter) + Leases 299.0m
Net Debt = -21.5b CNY (calculated: Debt 5.12b - CCE 26.7b)
Enterprise Value = 80.7b CNY (102b + Debt 5.12b - CCE 26.7b)
Interest Coverage Ratio = 72.68 (Ebit TTM 10.6b / Interest Expense TTM 146.2m)
EV/FCF = 9.11x (Enterprise Value 80.7b / FCF TTM 8.86b)
FCF Yield = 10.98% (FCF TTM 8.86b / Enterprise Value 80.7b)
FCF Margin = 27.25% (FCF TTM 8.86b / Revenue TTM 32.5b)
Net Margin = 26.29% (Net Income TTM 8.54b / Revenue TTM 32.5b)
Gross Margin = 57.00% ((Revenue TTM 32.5b - Cost of Revenue TTM 14.0b) / Revenue TTM)
Gross Margin QoQ = 44.91% (prev none%)
Tobins Q-Ratio = 0.81 (Enterprise Value 80.7b / Total Assets 99.5b)
Interest Expense / Debt = 2.85% (Interest Expense 146.2m / Debt 5.12b)
Taxrate = 17.63% (1.88b / 10.7b)
NOPAT = 8.75b (EBIT 10.6b * (1 - 17.63%))
Current Ratio = 2.09 (Total Current Assets 34.5b / Total Current Liabilities 16.6b)
Debt / Equity = 0.07 (Debt 5.12b / totalStockholderEquity, last quarter 74.1b)
Debt / EBITDA = -1.79 (Net Debt -21.5b / EBITDA 12.0b)
Debt / FCF = -2.43 (Net Debt -21.5b / FCF TTM 8.86b)
Total Stockholder Equity = 80.3b (last 4 quarters mean from totalStockholderEquity)
RoA = 8.65% (Net Income 8.54b / Total Assets 99.5b)
RoE = 10.64% (Net Income TTM 8.54b / Total Stockholder Equity 80.3b)
RoCE = 12.53% (EBIT 10.6b / Capital Employed (Equity 80.3b + L.T.Debt 4.54b))
RoIC = 10.75% (NOPAT 8.75b / Invested Capital 81.4b)
WACC = 9.50% (E(102b)/V(107b) * Re(9.86%) + D(5.12b)/V(107b) * Rd(2.85%) * (1-Tc(0.18)))
Discount Rate = 9.86% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -51.11 | Cagr: -0.48%
[DCF] Terminal Value 69.42% ; FCFF base≈9.36b ; Y1≈8.42b ; Y5≈7.15b
[DCF] Fair Price = 145.8 (EV 95.8b - Net Debt -21.5b = Equity 117b / Shares 804.8m; r=9.50% [WACC]; 5y FCF grow -12.39% → 2.50% )
EPS Correlation: 98.45 | EPS CAGR: 24.65% | SUE: 0.54 | # QB: 0
Revenue Correlation: 80.03 | Revenue CAGR: 5.66% | SUE: -0.02 | # QB: 0
EPS current Quarter (2026-06-30): EPS=1.64 | Chg30d=-5.22% | Revisions=-60% | Analysts=7
EPS next Quarter (2026-09-30): EPS=1.64 | Chg30d=-2.17% | Revisions=-40% | Analysts=6
EPS current Year (2026-12-31): EPS=6.49 | Chg30d=-2.28% | Revisions=-26% | GrowthEPS=+5.1% | GrowthRev=+8.2%
EPS next Year (2027-12-31): EPS=7.18 | Chg30d=-1.70% | Revisions=-40% | GrowthEPS=+10.7% | GrowthRev=+10.0%
[Analyst] Revisions Ratio: -60%