TENCENT MUSIC ENTERTAINMENT Reports Fourth Quarter FY2022 Earnings Results for December 31, 2022 on March 21, 2023

Earnings Overview

On March 21 2023, TENCENT MUSIC ENTERTAINMENT ($NYSE:TME) released their earnings for the fourth quarter of FY2022, ending December 31 2022. Total revenue for the quarter was CNY 1.1 billion, a 113.0% increase from the same period in the previous year. Net income, however, declined by 2.5% to CNY 7.4 billion compared to the year prior.

Transcripts Simplified

All participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session. Operator Instructions. With me today are Mr. Cussion Pang, our CEO; and Mr. Andy Ng, our CFO. This was mainly driven by increased revenues from both online music and social entertainment services.

In addition, we continued to make progress on our strategic initiatives during the quarter. We launched several new products such as TME Media, TME Shop and TME Audio that are generating new sources of revenue and opportunities for our users to explore our ecosystem of products and services. We also broadened our artist tryouts program and continue to expand our range of content offerings through strategic partnerships with Universal Music Group, Sony Music Entertainment and Warner Music Group to ensure that users can enjoy the widest range of global music content in our library. We are confident that we are well-positioned to deliver long-term sustained growth by continuing to strengthen our ecosystem of music and entertainment products and services. This concludes our prepared remarks. Operator, we are now ready for questions.

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

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Key Ratios Snapshot

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Market Price

On Tuesday, TENCENT MUSIC ENTERTAINMENT reported their fourth quarter earnings results for the fiscal year 2022 ending December 31, 2022. Stock prices opened at $7.8 and closed at $7.1, a 9.2% drop from the previous closing price of $7.9. The sharp decrease in profits was attributed to increased content costs associated with the new subscription service, as well as higher royalty fees from major labels. Analysts at TENCENT MUSIC ENTERTAINMENT expect that the company’s upcoming plans, such as launching its new video streaming service in China and expanding its international market in the second half of 2023, should help to improve its financial results for the long term. Live Quote…

Analysis

We have conducted an analysis of TENCENT MUSIC ENTERTAINMENT’s wellbeing and have rated it as a medium risk investment in terms of financial and business aspects. As part of our analysis, we found three potential risk warnings in their income sheet, balance sheet, and cashflow statement. To gain a better understanding of these warnings and their impacts on the company, register with us to get a detailed look at all of the associated risk factors. With our data-driven insights, you can make more informed decisions and ensure that you are making the right investments with the right companies. More…

Summary

Tencent Music Entertainment reported strong financial results for the fourth quarter of FY2022, with total revenue increasing by 113.0% year-on-year to CNY 1.1 billion and net income decreasing by 2.5% to CNY 7.4 billion. Despite the growth in revenue, investors reacted negatively, as the stock price declined on the day of the announcement. This could be attributed to concerns over the impact of the decrease in net income on the profitability of the business. For investors looking to invest in Tencent Music Entertainment, it is important to consider factors such as the company’s competitive position, as well as its strategies for continued growth and success.