Tencent Music Entertainment: Still A Buy With Spotlight Beyond Subscriber Growth

2025-12-29 04:23:21 ET

Update: Wild Swings

Tencent Music Entertainment ( TME ) has reacted positively following the release of 2Q25 results, where proactive advertisement of its SVIP membership program drove YoY total revenue growth by 18%. Average revenue per paying user (ARPPU) increased by 21% to CNY11.7 per month, while the pace of expansion for the paying user base continues to dim. In 3Q25, the results have shown a modest increase of ARPPU to CNY11.9 while advertising costs surged a little. Following the announcement, its stock price has fallen significantly. Aside from the slowing momentum of users converting towards SVIP subscriptions, prolonged MAU decrease and perceived threats from rival and substitute products exacerbated the decline....

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