Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Tencent Music Entertainment Group (Tencent Music) delivered a solid performance for the third quarter of 2024.</li><li>The company demonstrated a balanced strategy that resulted in revenue growth and increased subscriber numbers, emphasizing its broad content ecosystem's growing influence and user value proposition.</li><li>Tencent Music reported significant growth in its online music services, with a 20% year-over-year increase in revenue, contributing to a 29% enhancement in adjusted net profit.</li></ul>

Tencent Music Entertainment Group (Tencent Music) delivered a solid performance for the third quarter of 2024.The company demonstrated a balanced strategy that resulted in revenue growth and increased subscriber numbers, emphasizing its broad content ecosystem's growing influence and user value proposition.Tencent Music reported significant growth in its online music services, with a 20% year-over-year increase in revenue, contributing to a 29% enhancement in adjusted net profit.

Tencent Music Entertainment Group: Technological Innovations & Product Upgrades Driving Our Bullishness! - Major Drivers

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.</li>
<li>We believe the market ignores TME because of its flat revenue.</li>
<li>However, we expect TME will significantly benefit from its dominant position in the Chinese music market.</li>
</ul>


Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.
We believe the market ignores TME because of its flat revenue.
However, we expect TME will significantly benefit from its dominant position in the Chinese music market.


2025 High Conviction: Tencent Music Entertainment (TME) – Music as Promising Future

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>TME reported 3Q24 results on 12 Nov: total revenue increased by 7% YoY to RMB7.02bn, in line with our/Bloomberg consensus estimate; non-IFRS net income grew by 29% YoY to RMB1.81bn, also in line with our/consensus estimate of RMB1.76/1.79bn.</li><li>The number of SVIP subscribers achieved the 10mn milestone in Sept 2024, and we expect it to become a key driver of the music ARPPU and revenue growth going forward.</li><li>Looking ahead, we expect total revenue/non-IFRS net income to grow by 6/26% YoY to RMB7.31/1.98bn in 4Q24E. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

TME reported 3Q24 results on 12 Nov: total revenue increased by 7% YoY to RMB7.02bn, in line with our/Bloomberg consensus estimate; non-IFRS net income grew by 29% YoY to RMB1.81bn, also in line with our/consensus estimate of RMB1.76/1.79bn.The number of SVIP subscribers achieved the 10mn milestone in Sept 2024, and we expect it to become a key driver of the music ARPPU and revenue growth going forward.Looking ahead, we expect total revenue/non-IFRS net income to grow by 6/26% YoY to RMB7.31/1.98bn in 4Q24E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) - Inline 3Q24 Results; SVIP Evolves as the New Growth Driver

<ul>
<li>The quarterly gross margin hit historical high again in 3Q24.</li>
<li>As expected, the growth rate exceeded 5% YoY for the first time in three years, as the weak business became insignificant in total revenue.</li>
<li>The P/E band suggests an upside of 124% and a price target of US$26 for the end of 2025. Buy.</li>
</ul>


The quarterly gross margin hit historical high again in 3Q24.
As expected, the growth rate exceeded 5% YoY for the first time in three years, as the weak business became insignificant in total revenue.
The P/E band suggests an upside of 124% and a price target of US$26 for the end of 2025. Buy.


Tencent Music (TME): 3Q24, Began to Grow with Record Gross Margin

<ul>
<li>The weak business, social entertainment, become insignificant in recent quarters.</li>
<li>All operating data in music is promising, including paying user base, ARPPU, and sublicensing revenue.</li>
<li>We set an upside of 20% and a price target of US$14.80 for the end of 2025.</li>
</ul>


The weak business, social entertainment, become insignificant in recent quarters.
All operating data in music is promising, including paying user base, ARPPU, and sublicensing revenue.
We set an upside of 20% and a price target of US$14.80 for the end of 2025.


Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)

Tencent Music Entertainment Group: Technological Innovations & Product Upgrades Driving Our Bullishness! - Major Drivers

Tencent Music Entertainment Group (Tencent Music) delivered a solid performance for the third quarter of 2024. The company demonstrated a balanced...

Baptista Research

2025 High Conviction: Tencent Music Entertainment (TME) – Music as Promising Future

Our 2024 High Conviction, Meituan, has risen by 87% in one year. We believe the market ignores TME because of its flat revenue, but TME will...

Ming Lu

TME (TME US) - Inline 3Q24 Results; SVIP Evolves as the New Growth Driver

TME reported 3Q24 results on 12 Nov: total revenue increased by 7% YoY to RMB7.02bn, in line with our/Bloomberg consensus estimate

CMB International

Tencent Music (TME): 3Q24, Began to Grow with Record Gross Margin

The quarterly gross margin hit historical high again in 3Q24. The growth rate exceeded 5% YoY for the first time in three years, as the weak...

Ming Lu

Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years

The weak business, social entertainment, become insignificant in recent quarters. All operating data in music is promising, including paying user...

Ming Lu

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