Tencent Music Entertainment Group (TME) PT Raised to $17 at Jefferies

Jefferies analyst Thomas Chong raised the price target on Tencent Music Entertainment Group (NYSE: TME) to $17.00 (from $15.20) while maintaining a Buy rating.

The analyst comments "TEM reported 1Q results with revenue and non-IFRS earnings largely inline with expectations (link). During conference call, management reaffirmed revenue acceleration and margin expansion in 2025. In 2Q, we revise up slightly our revenue estimates due to other revenue and social entertainment while our subscription revenue remains unchanged. We adjust our net adds assumptions and revise our ARPPU on SVIP contributions. Maintain Buy.

Key takeaways from conference call. These include (1) For full year 2025, revenue YoY growth is expected to accelerate vs last year with margin improvement. For subscription business, TME will continue to deliver high quality growth driven by both subscriber gains and ARPPU expansion. For non-subscription business, ad revenue can be driven by improving ad performance and product innovation, while revenue from merchandise and concerts can be enhanced by deepening partnerships with music labels and artists. (2) SVIP penetration and ARPPU both demonstrate strong growth momentum. Number of SVIP members and ARPPU both increased sequentially in 1Q25."

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