Tencent Music Entertainment Group

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Tencent Music Entertainment Group (NYSE: TME) operates as a holding company primarily focused on providing and managing online music entertainment platforms. Its core business activities include offering online music services, social entertainment features, and a range of related value-added services.

Kalkine’s American Tech Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• The stock witnessed a strong uptrend from late 2024 to September 2025, rising from around USD 10 to nearly USD 26. Since September, it has entered a correction phase, showing lower highs and lower lows.
• The price is currently below both the 20-day and 50-day moving averages, indicating short-term bearish momentum. The stock recently rebounded from around USD 21, but faces resistance near USD 23.5, which coincides with the 50-day MA.
• The RSI (14) at 35.1 suggests the stock is approaching oversold territory, signaling possible short-term support.
• Volume levels have declined since the September peak, implying reduced investor participation during the correction.

1.2 The Key Positives, Negatives, and Investment summary   

1.3 Top 10 shareholders:

The top 10 shareholders together form ~25.62% of the total shareholding, signifying dispersed shareholding. Schroder Investment Management North America Inc. and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~5.57% and ~2.94%, respectively.

1.4 Key Metrics:

Between Q2 FY24 and Q2 FY25, Tencent Music Entertainment (TME) exhibited consistent and healthy financial progression, marked by steady revenue growth and expanding profitability. Net revenue increased from RMB7.16 billion in Q2 FY24 to RMB8.44 billion in Q2 FY25, reflecting the company’s strategic pivot toward high-quality, subscription-led income streams. This performance was underpinned by robust growth in online music services, where rising paid subscriptions, higher ARPPU, and the success of SVIP memberships contributed meaningfully. Concurrently, TME’s efforts to diversify monetization through advertising, artist merchandise, and offline performances further supported topline expansion. Cost discipline and a reduced reliance on low-margin social entertainment services enabled gross profit to rise from RMB3.01 billion to RMB3.75 billion, lifting gross margin from 42.0% to 44.4%. This sequential margin expansion—observed consistently through FY24 and FY25—stemmed from an improved business mix, lower revenue-sharing ratios, and a stronger emphasis on self-produced and licensed content. Collectively, these trends highlight TME’s successful operational transformation toward a scalable, premium-driven model with sustainable earnings momentum and improving profitability visibility.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q2FY25:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• The stock witnessed a strong uptrend from late 2024 to September 2025, rising from around USD 10 to nearly USD 26. Since September, it has entered a correction phase, showing lower highs and lower lows.
• The price is currently below both the 20-day and 50-day moving averages, indicating short-term bearish momentum. The stock recently rebounded from around USD 21, but faces resistance near USD 23.5, which coincides with the 50-day MA.
• The RSI (14) at 35.1 suggests the stock is approaching oversold territory, signaling possible short-term support.
• Volume levels have declined since the September peak, implying reduced investor participation during the correction.  

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation   

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 10, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.