China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[Tencent Music (TME US) Target Price Change]: Cut TP as Offline Music Activities Begin to Thrive

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China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>TME reported 4Q22 results with topline beat our est. by 3.6% and bottom line beat our est. by 2.4%. </li>
<li>While the growth of online music gradually stabilizes without large catalyst in near future, its social entertainment segment continues to decline due to competition pressure.</li>
<li>Maintain SELL and cut TP to US$ 6.2 to reflect limited top line growth and possible cost rebound. Our TP implies 13.6X PE in 2023.</li>
</ul>


TME reported 4Q22 results with topline beat our est. by 3.6% and bottom line beat our est. by 2.4%. 
While the growth of online music gradually stabilizes without large catalyst in near future, its social entertainment segment continues to decline due to competition pressure.
Maintain SELL and cut TP to US$ 6.2 to reflect limited top line growth and possible cost rebound. Our TP implies 13.6X PE in 2023.


[Tencent Music (TME US) Target Price Change]: Cut TP for Competition Pressure and Cost Rebound