TME Intrinsic Value Calculator – Tencent Music and Universal Music Renew Licensing Agreement
January 4, 2024
☀️Trending News
Tencent Music Entertainment ($NYSE:TME) Group, more commonly known as Tencent Music, is a leading online music entertainment platform in China. Tencent Music recently announced it had renewed its licensing agreement with Universal Music Group (UMG), the largest record label in the world. The new agreement marks a major milestone for the companies, and will lead to the continued collaboration between Tencent Music and UMG. The renewed deal will allow Tencent Music to continue to offer UMG’s catalog of music to its users.
The new agreement also includes a more comprehensive licensing agreement, allowing Tencent Music to stream UMG’s music on its own platforms, as well as on social media sites and short video platforms such as WeChat. Other aspects of the agreement include improved royalty rates and revenue sharing, and the inclusion of UMG’s repertoire in Tencent Music’s karaoke product. The renewal of this agreement shows Tencent Music’s commitment to developing and strengthening relationships with international music labels.
Share Price
On Wednesday, an important announcement was made that TENCENT MUSIC ENTERTAINMENT and Universal Music had renewed their long-term licensing agreement. This news drove the stock of TENCENT MUSIC ENTERTAINMENT up by 1.7%, with it opening at $8.8 and closing at $8.9, from the prior closing price of 8.7. This agreement is expected to benefit both parties, with TENCENT MUSIC ENTERTAINMENT having access to Universal Music’s vast catalog, including music from its iconic labels, and Universal Music being able to leverage further the tremendous user base that TENCENT MUSIC ENTERTAINMENT has built up. Both parties have expressed excitement over this agreement and look forward to further developing their partnership in the future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for TME. More…
| Total Revenues | Net Income | Net Margin |
| 28.28k | 4.76k | 16.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for TME. More…
| Operations | Investing | Financing |
| 7.85k | -2.78k | -1.34k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for TME. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 72.96k | 17.79k | 31.43 |
Key Ratios Snapshot
Some of the financial key ratios for TME are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 0.2% | 7.1% | 20.7% |
| FCF Margin | ROE | ROA |
| 24.0% | 6.8% | 5.0% |
Analysis – TME Intrinsic Value Calculator
At GoodWhale, we have been analyzing the fundamentals of TENCENT MUSIC ENTERTAINMENT. Based on our proprietary Valuation Line, we have estimated that the fair value of TENCENT MUSIC ENTERTAINMENT share is around $7.1. However, currently TENCENT MUSIC ENTERTAINMENT stock is being traded at $8.9, which is overvalued by 25.5%. More…
Summary
Tencent Music Entertainment (TME) has recently renewed its licensing agreement with Universal Music Group (UMG). The agreement will continue for five years and gives TME access to UMG’s music catalogue, including the ability to license and distribute UMG’s music for use in streaming, karaoke and other services. This renewal is positive news for TME as it allows the company to continue to expand its streaming services. The agreement also expands the scope of existing deals by allowing UMG to gain access to Tencent’s vast social media and gaming platforms.
This is likely to increase revenue for both companies, as well as increase the value of Tencent Music as an investment. The renewed agreement is a positive indicator that Tencent Music is committed to continually expanding its services, increasing user engagement, and expanding its reach globally.
