Tencent Music Entertainment Group - ADR

Strong Financial Performance: Tencent Music Entertainment (TME) reported a 47% year-over-year increase in net profit in Q4 2024, reaching RMB 2.1 billion, and marked the highest quarterly profit in its history. Total revenues were RMB 7.5 billion, up 8% year-over-year, driven mainly by a 16% increase in online music revenues.

Subscriber Growth and ARPU Trends: The company added 2 million new paying music users in Q4 2024, bringing the total to 121 million, a 13% year-over-year increase. Monthly Average Revenue Per User (ARPU) grew to RMB 11.1 from RMB 10.7 during the same period last year. TME aims to maintain this growth trajectory into 2025, although executive caution noted price sensitivity among subscribers.

Investment in AI and Content Innovations: TME is focused on leveraging AI technologies to enhance user experience and engagement. New features include AI-powered audio effects and music creation tools, expected to boost user retention and engagement, thereby supporting revenue growth.