China’s Tencent Music Entertainment Group beat first-quarter revenue estimates on Monday, helped by steady growth in paid subscriptions and advertising services on its Spotify-like music streaming platform.
US listed shares of Tencent Music Entertainment rose 1.8% in premarket trade.
The audio entertainment platform reported revenue of 6.77-billion yuan ($935.9m) for the quarter ended March 31, beating analysts’ expectations of 6.63-billion yuan, according to LSEG data.
Revenue, however, declined 3.4% from a year earlier.
The company has bolstered its growth by capitalising on its position as the largest Chinese music-streaming platform with an attractive licensed music library while continuing to focus on advertising services and artist merchandise.
Paying users at its online music streaming service — a key metric for the company — rose 20.2% to 113.5-million from a year earlier.
The audio entertainment platform, which operates music apps such as QQ music, Kugou music, Kuwo music and WeSing, reported a 39.2% jump in revenue from its music subscriptions to 3.62-billion yuan.
The company’s revenue from online music services rose 43%, driven by solid growth in music subscription revenue.
However, revenue from its social entertainment services dropped 49.7% due to the continued effect of the government’s crackdown on online gambling in 2023 and increased competition from rival NetEase’s Cloud Music and Bytedance-owned short video sharing platform Douyin.
Naspers, which owns about 25% of Tencent through its internet arm Prosus, saw its share price on the JSE rise 2.12% on the day to R3,851. Prosus’ share price was up 1.52% to R684.
Reuters
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