According to a report issued by Deutsche Bank, Tencent Music's overall second-quarter results were in line with expectations. Revenue increased 6% year over year, and adjusted net profit increased 4% year over year. Music-related revenue increased 11% year over year, showing a gradual steady trend, driven by Himalaya consolidation, super VIP growth, and steady momentum in IP-related services. However, gross margin declined both quarterly and year-over-year, mainly because the revenue structure was skewed towards IP-related businesses with lower profit margins. The bank raised Tencent Music's revenue forecast for the 2026/2027 fiscal year by 2%/2%, but lowered the adjusted net profit forecast by 2%/3%. The target price was reduced from HK$66 to HK$57 in response to worsening profit margins. The target price was reduced from HK$66 to HK$57. It reiterated its “buy” rating, and still maintained a positive view of the company's leading position in the online music and audio streaming media sector.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.