Leidi Net Lotte reported on August 17
Online music and audio entertainment platform Tencent Music Entertainment Group (“Tencent Music”) (NYSE code: TME) announced its financial report today. The financial report shows that Tencent Music’s revenue for the second quarter of 2021 was 8.01 billion yuan ($1.24 billion), an increase of 15.5% over the same period last year.
Tencent Music’s online music service revenue in the second quarter of 2021 increased by 32.8% year-on-year. Online music subscription revenue was 1.79 billion yuan (277 million US dollars), a year-on-year increase of 36.3%.
Tencent Music’s online music paying users reached 66.2 million in the second quarter of 2021, a year-on-year increase of 40.6%. Among them, the month-on-month net growth was 5.3 million, which was the largest net growth in a single quarter since 2016. The payment rate reached 10.6%, higher than the 7.2% in the same period last year and the 9.9% in the first quarter of 2021.
Tencent Music’s net profit for the second quarter of 2021 was 871 million yuan ($135 million), and the net profit attributable to the company’s shareholders was 827 million yuan ($128 million).
Tencent Music’s non-IFRS net profit for the second quarter of 2021 was 1.16 billion yuan (180 million US dollars), and the non-IFRS net profit attributable to shareholders was 1.12 billion Yuan (US$173 million).
After the earnings report was released, Tencent Music’s aftermarket share price rose by more than 4%. From the data point of view, Tencent Music has consolidated its position in online music and audio entertainment, and its revenue has maintained sustained growth.
Long-term growth opportunities in the online music and audio fields are imminent, and Tencent Music is currently in a very favorable leading position. Although the industry is about to adjust the exclusive music copyright authorization model, it will still take a long time for opponents to catch up with Tencent Music. The reason is that the right to choose whether the music copyright is authorized to the platform is still in the hands of record companies and music labels.
Peng Jiaxin, Executive Chairman of Tencent Music Entertainment Group, said: “In July this year, the State Administration for Market Regulation issued an enforcement decision concerning the adjustment of the exclusive music copyright model. TME fully and sincerely accepts this decision and will strictly follow the regulatory requirements. Complete rectification without deduction on time. In the future, we will continue to adhere to the innovation and development of the industry, better fulfill our social responsibilities, provide users with better services, and promote the long-term healthy development of the digital music industry.”
“Our overall performance achieved steady growth in the second quarter. We are also committed to continuing to build a leading online music and audio entertainment ecosystem, and have achieved impressive results with long audio MAU increasing by more than 90% year-on-year. We will continue to focus on content and The platform’s “one body and two wings” develop together. Through a number of important measures, we will continue to expand and improve our ecological construction, while empowering singers and musicians, while providing users with one-stop online music and audio entertainment services. In terms of content, We will continue to deepen and expand our strategic partnerships with partners, and work with singers, musicians and content partners to create more high-quality and differentiated content, and at the same time further strengthen our content creation capabilities. We are also interested in TME live The business model has undergone a strategic upgrade, further integrating online concerts with offline events, and providing more differentiated services and solutions for different groups such as well-known singers and budding independent musicians.”
Liang Zhu, CEO of Tencent Music Entertainment Group, said: “In terms of platform, we further enhance the competitiveness and attractiveness of our platform, and provide users with better services in an increasingly video-oriented and socialized interactive environment. Especially in social entertainment. In terms of services, we are continuing to polish product functions, and actively explore various scenarios centered on socialization and communityization that Tencent Gene is good at. This will help further enhance user activity and retention. In addition, we continue to deepen our relationship with Tencent’s ecosystem More extensive cooperation. For example, we cooperate with WeChat video account to launch richer video content and further enhance the ability of content dissemination. At the same time, it also creates more platforms and platforms for singers, musicians and users to release their imagination and creativity. space.”
Tencent Music expands and improves ecological construction, and deepens cooperation with Tencent
1. Continue to expand the self-made, co-created and introduced music content:
In terms of content introduction, we will continue to deepen the in-depth strategic cooperation with music labels, and at the same time, we will deepen the vertical music field, and introduce diversified music content including new hot, national style, rap, etc., as well as from games, movies, TV shows and variety shows, etc. High-quality music content.
The company continues to work closely with musicians and core partners in the music industry:
a) The Tencent Musician Platform continues to provide development support and publicity support for independent musicians. The number of independent musicians settled in has achieved a three-digit year-on-year growth, and the playback volume of Tencent Musician songs has continued to increase year-on-year;
b) In-depth cooperation with the Tencent system, through IP cooperation projects in the game, film industry, literature and animation categories to create more than 20 songs on the chart;
c) Relying on the understanding of music content and the integration of singer resources, the company co-produced the theme song with the movie “Above the Cliff” directed by a famous Chinese director.
2. The company continues to upgrade TME live, through the multi-dimensional integration of online concerts, chamber music festivals and parties and other offline activities to meet the diverse needs of different groups such as well-known singers and independent musicians. In recent events, the company has introduced new interactive commercialization functions, such as online ticketing, VIP rights and paid peripherals, to promote the continuous release of the value and market potential of the online performance field.
The company further deepens the extensive linkage with Tencent’s ecology, and strengthens the ability to co-create and publicize content with music as the core:
Continue to deepen the cooperation with WeChat video account to help musicians maximize their exposure. Through extensive linkage with WeChat’s social network, the company has increased more cooperation with music as the core to promote user activity.
Recently, QQ Music and WeChat have launched a new function. Users can share the songs they are listening to on their WeChat status, and share music in a more dynamic and interesting way; users can also customize their music with selected songs in the massive music library. WeChat ringtones. In addition, the cutting-edge AI technology based on WeChat translation provides high-quality lyrics translation for English songs on the platform.
Promote share repurchase according to the established plan
Since March 2021, China’s concept stocks have substantially recovered, and Tencent Music has also been affected.
In March 2021, Tencent Music announced that the board of directors has approved a stock repurchase plan, and the company can repurchase up to US$1 billion in American Depository Shares (ADS) in the form of Class A within 12 months from March 29, 2021. Ordinary shares.
CITIC Securities released a research report on Tencent Music’s financial report, saying, “We are optimistic about the company’s long-term increase in online music payment rates and its leading position in the long-term audio field.” And further pointed out, “We believe that the company’s online music payments are on a long-term rise. The commercialization potential of channel, long audio business and advertising business is expected to be gradually released. We believe that the growth momentum of the company’s performance is still strong, and we are optimistic about the company’s industry position and competitive advantage.”
According to data from the financial analysis website Marketbeat.com, since August there have been Commonwealth Equity Services LLC, Great West Life Assurance Co. Can, Bank of New York Mellon Corp, Tobam, Panagora Asset Management Inc, Harvest Fund Management Co. Ltd, etc. More than 40 international investment institutions have increased their positions in Tencent Music.
According to people familiar with the matter, Tencent Music is promoting stock repurchase according to the established plan.
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