Shares of Tencent Music Entertainment Group (NYSE: TME) were down in pre-market trading on Tuesday after the online music and audio entertainment platform in China reported diluted earnings of $0.13 per ADS which surpassed analysts’ consensus estimate of $0.11 per ADS.
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TME generated revenues of $1.08 billion in Q4, beating analysts’ expectations of $1.07 billion. More worryingly, TME’s mobile monthly active users (MAU) for the online music business declined by 7.8% year-over-year to 567 million while mobile MAUs on the social entertainment platform also fell.
However, paying users for online music rose 16.1% year-over-year to 88.5 million. While monthly average revenue per user (ARPU) was up 4.7% year-over-year to RMB8.9 for online music in the fourth quarter, it declined by 3.1% year-over-year to RMB169.6 for TME’s social entertainment business.
Overall, Wall Street analysts are cautiously optimistic about TME stock with a Moderate Buy consensus rating based on two Buys and four Holds.
