Largest-ever one-day drop for Chinese music giant
- Tencent Music Entertainment shares experience largest-ever one-day drop
- Lower quarterly sales and weaker-than-expected subscriber growth
- Shares fell 18% to 44.10 Hong Kong dollars ($5.66)
- Revenue from social-entertainment services declined due to changes in live-streaming functions and increased competition
- Online music service revenue rose during the quarter
- Expected new subscriber numbers to fall sequentially in second half of the year
- Music subscription revenue growth expected to soften
- Daiwa downgraded Tencent Music rating to a hold from buy
- Tencent Music has 117 million paid subscribers worldwide, making it the second-largest music streaming company behind Spotify
Tencent Music Entertainment shares fell by 18% to 44.10 Hong Kong dollars ($5.66) after posting lower quarterly sales and weaker-than-expected subscriber growth, mainly due to changes in live-streaming functions and increased competition from other platforms. The company expects new subscriber numbers to decline in the second half of the year and music subscription revenue growth to soften. Daiwa downgraded its rating on Tencent Music to a hold from buy. With around 117 million paid subscribers, it is the second-largest music streaming company behind Spotify.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Tencent Music Entertainment’s financial performance, including lower sales and subscriber growth, attributing reasons for the decline, and mentioning its position in the market compared to Spotify. It also includes a relevant analysis from Daiwa analysts.
Noise Level: 3
Noise Justification: The article provides relevant information about Tencent Music Entertainment’s financial performance and market reaction but lacks in-depth analysis or exploration of long-term trends or consequences of decisions. It also does not offer actionable insights or new knowledge for readers.
Public Companies: Tencent Music Entertainment (TME), Spotify (SPOT)
Key People: Jiahui Huang (Author)
Financial Relevance: Yes
Financial Markets Impacted: Tencent Music Entertainment shares in Hong Kong and its American depositary receipts on other markets
Financial Rating Justification: The article discusses Tencent Music Entertainment’s lower quarterly sales, weaker-than-expected subscriber growth, and the impact on its stock prices in financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
Deal Size: The deal size mentioned in this article is $1 billion.
Move Size: The market move size mentioned in this article is a 15% drop in shares of Tencent Music Entertainment and an 18% fall in Hong Kong dollars ($5.66) early Wednesday.
Sector: Technology
Direction: Down
Magnitude: Large
Affected Instruments: Stocks
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