BofA analyst Lei Zhang lowered the firm’s price target on Tencent Music to $8.80 from $10.00 and keeps a Buy rating on the shares. The profitability of Tencent Music’s music business and weakness of the live streaming business all came as surprises to the market, the analyst tells investors in a research note. As music profitability is much better than expected with continuous improvement of group GPM along with cost control, the firm sees the large decline of live streaming revenue will have limited impact to Tencent Music’s group profit in 2023-2025.
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