Tencent Music Enjoys Stronger Revenue, Profit in Second Quarter
The music arm of China's tech giant Tencent said the number of paying users of its streaming services has achieved record growth.
The stock in Tencent Music Entertainment Group (NYSE: TME) was down 7 percent in premarket Tuesday, at $13.49 per share, despite beating profit expectations for the second quarter.
The music arm of China's tech conglomerate Tencent Holdings Ltd. (HKEX: 0700) reported after markets closed Monday that its revenue in the three months through June reached $859 million, up 31 percent year-over-year. Net profit was $135 million, or 8 cents per share, at an increase of 2.5 percent, according to the report.
"We are pleased with second quarter results driven by the strength of both our online music and social entertainment businesses," TME's chief executive officer, Cussion Pang, said in the statement.
He added, "The growth in our online music paying users accelerated during the quarter, with 2.6 million paying users added sequentially. We continued to expand our music content leadership by partnering with more music labels, as well as adding more content including music-centric variety shows, short-form videos and long-form audio such as audio books and podcasts."
The company said it is arranging Internet of Things partnerships with leading manufacturers of cars, smart speakers and smartwatches, which it hopes will provide further channels for user acquisition.TME is also looking to expand its social entertainment services outside of China, it said.
Tencent Music was formed in 2016 when its parent purchased China Music Corp., the owner of Kugou and Kuwo, for $2.7 billion. China Music subsequently merged with QQ Music, a music platform Tencent launched in 2003. WeSing, Tencent's online social karaoke platform, began operating in 2014. WeSing expanded into overseas markets by launching in Southeast Asian countries.