A Business at a Glance
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Tencent Music Entertainment Group
TME
$8.0B
Mkt Cap
$8.86
+1.14%
Tencent Music Entertainment Group (TME) has a current P/E ratio of 6.3, compared to its historical median P/E of 9.5. The stock is currently considered Fair based on its historical valuation range.
Tencent Music Entertainment Group (TME) has a 5-year average return on invested capital (ROIC) of 11.2%. This indicates solid capital allocation.
Yes, Tencent Music Entertainment Group (TME) pays a dividend with a trailing twelve-month yield of 3.34%.
Based on historical P/E analysis, Tencent Music Entertainment Group (TME) appears fair. The current P/E of 6.3 is 33% below its historical median of 9.5. The estimated fair value CAGR (P/E method) is 27.3%.
Tencent Music Entertainment Group (TME) operates in the Radio Broadcasting Stations industry, within the Communication Services sector.
Tencent Music Entertainment Group (TME) reported annual revenue of $28.4 billion in its most recent fiscal year, based on SEC EDGAR filings.
ITEM 4. INFORMATION ON THE COMPANY 4.A. History and Development of the Company Launch of QQ Music, Kugou, Kuwo, WeSing and Lazy Audio • QQ Music: In 2003, QQ, the social network operated by Tencent, launched its online music services. In 2005, QQ Music commenced operations. • Kugou: In 2004, Kugou Music was launched. In February 2006, Guangzhou Kugou Computer Technology Co., Ltd., or Guangzhou Kugou, was incorporated in China and commenced the operations of Kugou Music. In September 2012, Guangzhou Kugou commenced offering its live streaming services through Fanxing Live, which was rebranded to Kugou Live in December 2016. • Kuwo: In December 2005, Beijing Kuwo Technology Co., Ltd., or Beijing Kuwo, was incorporated in China and commenced its operations of Kuwo Music. Beijing Kuwo and its then shareholders subsequently entered into a series of contractual arrangements with Yeelion Online Network Technology (Beijing) Co., Ltd.
| Metric | TTM | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 |
|---|---|---|---|---|---|---|
| Revenue | 28.4B | 28.4B | 27.8B | 4.2B | 31.2B | 4.2B |
| Net Income | 7.1B | 7.1B | 5.2B | 569M | 3.2B | 606M |
| EPS | $0.00 | - | - | $0.80 | - | $0.42 |
| Free Cash Flow | 10.0B | 10.0B | 7.2B | 1.1B | 5.1B | 693M |
| ROIC | 12.6% | 14.2% | 12.6% | 9.3% | 7.8% | 12.2% |
| Gross Margin | 42.3% | 42.3% | 35.3% | 31.0% | 30.1% | 31.9% |
| Debt/Equity | 0.00 | 0.30 | 0.32 | 0.36 | 0.32 | 0.29 |
| Dividends/Share | $0.00 | $0.30 | - | $0.00 | $0.00 | - |
| Operating Income | 8.7B | 8.7B | 6.1B | 659M | 3.8B | 683M |
| Operating Margin | 30.7% | 30.7% | 21.8% | 15.7% | 12.2% | 16.2% |
| ROE | 10.2% | 11.2% | 9.8% | 7.7% | 6.2% | 8.7% |
| Shares Outstanding | 0M | - | - | 715M | - | 1,450M |
| Metric | 2016 | 2017 | TTM | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | ||||||||||
| Revenue | 4.4B | 11.0B | 19.0B | 3.7B | 4.2B | 31.2B | 4.2B | 27.8B | 28.4B | 28.4B |
| Gross Margin | 28.3% | 34.7% | 38.3% | 34.1% | 31.9% | 30.1% | 31.0% | 35.3% | 42.3% | 42.3% |
| R&D | 449M | 797M | 937M | 168M | 242M | 2.3B | 383M | 2.5B | 2.3B | 2.3B |
| SG&A | 783M | 1.5B | 2.3B | 392M | 450M | 4.0B | 655M | 4.1B | 3.8B | 3.8B |
| EBIT | 103M | 1.6B | 2.0B | 670M | 683M | 3.8B | 659M | 6.1B | 8.7B | 8.7B |
| Op. Margin | 2.4% | 14.5% | 10.7% | 18.2% | 16.2% | 12.2% | 15.7% | 21.8% | 30.7% | 30.7% |
| Net Income | 85M | 1.3B | 1.8B | 576M | 606M | 3.2B | 569M | 5.2B | 7.1B | 7.1B |
| Net Margin | 1.9% | 12.0% | 9.6% | 15.6% | 14.3% | 10.3% | 13.5% | 18.8% | 25.0% | 25.0% |
| Non-Recurring | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Returns on Capital | ||||||||||
| ROIC | N/A | 6.8% | 9.0% | 19.0% | 12.2% | 7.8% | 9.3% | 12.6% | 14.2% | 12.6% |
| ROE | N/A | 5.6% | 5.7% | 9.8% | 8.7% | 6.2% | 7.7% | 9.8% | 11.2% | 10.2% |
| ROA | N/A | 8.7% | 4.9% | 8.2% | 6.9% | 4.7% | 5.7% | 7.3% | 8.6% | 7.9% |
| Cash Flow | ||||||||||
| Op. Cash Flow | 873M | 2.5B | 5.6B | 899M | 708M | 5.2B | 1.1B | 7.3B | 10.3B | 10.3B |
| Free Cash Flow | 832M | 2.4B | 5.5B | 899M | 693M | 5.1B | 1.1B | 7.2B | 10.0B | 10.0B |
| Owner Earnings | 637M | 2.1B | 5.3B | 899M | 708M | 4.2B | 1.1B | 6.3B | 9.3B | 9.3B |
| CapEx | 41M | 75M | 132M | 0 | 16M | 159M | 13M | 165M | 319M | 319M |
| Maint. CapEx | 236M | 379M | 369M | 0 | 0 | 1.0B | 0 | 1.0B | 978M | 978M |
| Growth CapEx | 0 | 0 | 0 | N/A | N/A | 0 | N/A | 0 | 0 | 0 |
| D&A | 236M | 379M | 369M | 0 | 0 | 1.0B | 0 | 1.0B | 978M | 978M |
| CapEx/OCF | N/A | N/A | 2.3% | N/A | 2.2% | 3.0% | 1.1% | 2.2% | 3.1% | 3.1% |
| Capital Allocation | ||||||||||
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.5B | 1.5B |
| Dividend Yield | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Share Buybacks | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Buyback Yield | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | 0.0% |
| Stock-Based Comp | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Debt Repayment | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance Sheet | ||||||||||
| Net Debt | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | -13.2B |
| Cash & Equiv. | 3.1B | 5.2B | 17.4B | 2.2B | 1.6B | 6.6B | 1.4B | 13.6B | 13.2B | 13.2B |
| Long-Term Debt | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Debt/Equity | N/A | 0.15 | 0.18 | 0.21 | 0.29 | 0.32 | 0.36 | 0.32 | 0.30 | 0.00 |
| Interest Coverage | N/A | N/A | 58.3 | 72.2 | 48.6 | 31.7 | 41.1 | 48.9 | 70.2 | 70.2 |
| Equity | N/A | 26.1B | 37.8B | 6.3B | 7.6B | 51.1B | 7.3B | 57.2B | 69.7B | 69.7B |
| Total Assets | N/A | 30.0B | 44.6B | 7.6B | 9.9B | 67.3B | 9.9B | 75.5B | 90.4B | 90.4B |
| Total Liabilities | 174M | 3.9B | 6.8B | 1.3B | 2.3B | 16.2B | 2.7B | 18.3B | 20.7B | 20.7B |
| Intangibles | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Retained Earnings | N/A | 1.2B | 3.0B | 1.0B | 1.6B | 14.2B | 1.8B | 17.0B | 20.1B | 20.1B |
| Working Capital | N/A | 3.9B | 14.5B | 2.7B | 3.2B | 16.3B | 2.2B | 17.9B | 18.0B | 18.0B |
| Current Assets | N/A | 7.5B | 20.8B | 3.9B | 4.6B | 26.8B | 3.9B | 29.9B | 34.5B | 34.5B |
| Current Liabilities | N/A | 3.5B | 6.2B | 1.2B | 1.4B | 10.4B | 1.7B | 12.0B | 16.6B | 16.6B |
| Per Share Data | ||||||||||
| EPS | N/A | N/A | 0.56 | 0.40 | 0.42 | N/A | 0.80 | N/A | N/A | 0.00 |
| Owner EPS | N/A | N/A | 1.61 | 0.62 | 0.49 | N/A | 1.55 | N/A | N/A | N/A |
| Book Value | N/A | N/A | 11.57 | 4.37 | 5.27 | N/A | 10.20 | N/A | N/A | 0.00 |
| Cash Flow/Share | N/A | N/A | 1.72 | 0.62 | 0.49 | N/A | 1.55 | N/A | N/A | 0.00 |
| Dividends/Share | N/A | N/A | N/A | N/A | N/A | 0.00 | 0.00 | N/A | 0.30 | 0.00 |
| Shares Out. | N/A | N/A | 3.3B | 1.5B | 1.5B | N/A | 714.6M | N/A | N/A | 0.0M |
| Valuation | ||||||||||
| P/E Ratio | N/A | N/A | 66.0 | 28.6 | 42.3 | 9.1 | 9.5 | 8.0 | 8.1 | N/A |
| P/FCF | N/A | N/A | 7.6 | 18.4 | 37.0 | N/A | 4.9 | N/A | N/A | N/A |
| EV/EBIT | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | -1.5 |
| Price/Book | N/A | N/A | 3.2 | 2.6 | 3.4 | 0.6 | 0.7 | 0.7 | 0.8 | N/A |
| Price/Sales | N/A | N/A | 6.1 | 5.5 | 4.6 | 2.2 | 0.8 | 1.3 | 2.0 | N/A |
| FCF Yield | N/A | N/A | 30.1% | 5.4% | 2.7% | 111.9% | 20.3% | 121.5% | 124.7% | N/A |
| Market Cap | N/A | N/A | 18.3B | 16.5B | 25.6B | 4.5B | 5.4B | 5.9B | 8.0B | 0 |
| Avg. Price | N/A | N/A | 12.13 | 13.98 | 13.29 | 14.11 | 4.81 | 7.18 | 11.35 | 8.86 |
| Year-End Price | N/A | N/A | 12.77 | 11.38 | 17.67 | 6.01 | 7.58 | 8.32 | 11.27 | 8.86 |
Tencent Music Entertainment Group passes 3 of 9 quality checks, indicating weak fundamentals.
Tencent Music Entertainment Group trades at 6.3x trailing earnings, compared to its 15-year median P/E of 9.5x, suggesting it is currently Fair relative to its historical range. On a free-cash-flow basis, the stock trades at 4.5x vs a median of 13.0x. The company's 5-year average ROIC is 11.2% with a gross margin of 34.1%. Total shareholder yield (dividends) is 3.3%. At current prices, the estimated annualized return to fair value is +24.4%.
Tencent Music Entertainment Group (TME) has a net profit margin of 25.0%. This is a strong margin indicating high profitability.
Tencent Music Entertainment Group (TME) generated $10.0 billion in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
Tencent Music Entertainment Group (TME) has a debt-to-equity ratio of 0.30. This indicates a conservatively financed balance sheet.
Tencent Music Entertainment Group (TME) has a return on equity (ROE) of 11.2%. This indicates moderate shareholder returns.
Tencent Music Entertainment Group (TME) has a 5-year average gross margin of 34.1%. This indicates decent pricing power.
The Ledger Terminal provides 9 years of financial data for Tencent Music Entertainment Group (TME), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.