Music Entertainment Group

Citigroup Inc. decreased its holdings in Tencent Music Entertainment Group by 37.8% in the first quarter of 2023. Despite falling short of earnings estimates, Tencent Music saw a 5.5% YoY growth in revenue. The company offers various online music entertainment services in China. Institutional investors like Schroder Investment Management and Federated Hermes have significantly increased their stakes in the company.
Sep. 05, 2023 08:05
Music Entertainment Group

In the first quarter of 2023, Citigroup Inc. reduced its holdings in Tencent Music Entertainment Group (NYSE:TME) by 37.8%, according to the company's disclosure with the Securities & Exchange Commission. Citigroup Inc. sold 596,871 shares, leaving them with a total of 983,190 shares in the company's stock. These shares were valued at $8,141,000 and accounted for 0.06% ownership of Tencent Music Entertainment Group.

Tencent Music Entertainment Group released its earnings results for the quarter on August 15th. The company reported earnings per share (EPS) of $0.82, which fell short of analysts' consensus estimates by ($0.06). The company generated $7.29 billion in revenue during this period, slightly below analysts' expectations of $7.30 billion. Despite this, Tencent Music Entertainment Group experienced a year-on-year growth in revenue of 5.5%. Its return on equity stood at 9.87% and net margin at 16%.

As an online music entertainment platform operating in China, Tencent Music Entertainment Group offers various services such as music streaming, online karaoke, and live streaming through platforms like QQ Music, Kugou Music, Kuwo Music, and WeSing. These platforms enable users to discover personalized music experiences and participate in karaoke performances that can be shared with friends.

Looking ahead to the rest of the year, research analysts anticipate that Tencent Music Entertainment Group will post an EPS of 0.46 for the current year.

Overall, while Citigroup Inc.'s holdings in Tencent Music Entertainment Group have seen a significant decrease recently, it is important to note that the company continues to operate robust online music entertainment platforms that cater to users' musical preferences in personalized ways within China's market.

In recent months, there have been significant changes to the positions held by institutional investors in Tencent Music Entertainment Group (TME). One notable example is Schroder Investment Management Group, which saw a staggering increase of 48,039.5% in its holdings during the fourth quarter. This resulted in them owning a total of 15,062,851 shares valued at $124,720,000.

Similarly, Federated Hermes Inc. boosted its stake in TME by 436.7% during the first quarter, acquiring an additional 5,480,718 shares and bringing their total ownership to 6,735,840 shares valued at $32,804,000. E Fund Management Co. Ltd. also increased its stake by 125.5% during the same period. They now own 9,056,308 shares valued at $74,986,000 after purchasing an additional 5,039,621 shares.

Additionally, Invesco Ltd. saw a growth of 75.0% in its holdings during the first quarter as they acquired an extra 4,818,187 shares and currently hold a total of 11,245,066 shares valued at $54,762,000. This increase in ownership is likely indicative of Invesco's confidence in Tencent Music Entertainment Group.

The article also mentions that Norges Bank recently bought a new stake estimated around $38,940. This indicates their confidence in the investment potential of Tencent Music Entertainment Group.

Examining TME stock further, it opened at $6.82 on Friday, with a 12-month low of $3.14 and a high of $9.29. These values demonstrate the overall fluctuation in the company's stock price.

Several equity analysts have provided insights on TME stock. Macquarie upgraded their rating from "underperform" to "neutral," raising their price objective from $5.10 to $7.40 in a research report published on May 17th. China Renaissance also upgraded the company's rating from "hold" to "buy," setting a target price of $10.60.

Citigroup and Bank of America both mentioned a neutral rating for TME, with Citigroup reducing its initial price target from $7.50 to $7.00 during an update on August 16th, while Bank of America lowered its target price from $10.00 to $8.80.

Overall, there seems to be mixed opinions among analysts regarding TME stock, with five giving it a hold rating and six assigning it a buy rating as per Bloomberg.com data. The consensus remains that the stock has a moderate buy rating, with an average price target estimated at $8.72.

As we move forward, it will be interesting to see how the investments made by institutional investors influence the performance and future growth trajectory of Tencent Music Entertainment Group.