Market Insight | Tencent Music Entertainment Group's SW shares once fell by over 22%, Q2 revenue slightly decreased year-on-year, uncertainty remains in music subscription revenue growth

Tencent Music-SW once fell more than 22%, as of the time of publication, it dropped by 18.5% to HKD 43.6, with a turnover of HKD 40.433 million. In terms of news, Tencent Music released its second-quarter performance, with revenue of RMB 7.16 billion, a year-on-year decrease of 1.73%, mainly due to the decline in social entertainment services and other service revenues, partially offset by the strong annual growth in online music service revenues; the company's attributable net profit was RMB 1.682 billion, an increase of 29.58% year-on-year. The monthly active users of online music services reached 571 million, a year-on-year decrease of 3.9%; while the monthly active users of social entertainment services on the mobile end decreased by 31.6% year-on-year to 93 million. Daiwa published a report stating that it downgraded Tencent Music's investment rating from "Buy" to "Hold", and reduced the target price from HKD 66 to HKD 46. The bank pointed out that Tencent Music's quarterly results generally met expectations, with non-IFRS net profit exceeding expectations by 9%, but the company's guidance on music subscription revenue growth for the second half of this year and next year fell short of expectations, indicating uncertainty about the growth prospects