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Tencent Music surpasses quarterly sales projections

The logo of China's Tencent Music Entertainment Group is shown next to an earbud in this illustration photo taken March 22, 2021

HONG KONG, March 19 (mod1s) - China's Tencent Music Entertainment Group exceeded fourth-quarter revenue projections on Tuesday, boosted by increase in paid membership on its Spotify-like music streaming platform. 

The audio entertainment platform recorded sales of 6.89 billion yuan ($957.06 million) for the quarter, showing a 7.2% reduction as compared to the same time previous year. Analysts on average had projected sales of 6.71 billion yuan, according to LSEG statistics.

The number of paying customers grew to 106.7 million, showing a 21% growth for the quarter as compared to the same time last year. 

In an earnings call on Wednesday, Cussion Pang, the company’s executive chairman, credited the gain in subscribers to "the efficient execution of Tencent Music’s content and platform dual engine strategy and the counter-cyclical feature of the music industry." 

But the online music service nonetheless experienced a year-on-year income decrease, which is a partially consequence of China's legislative crackdown on music platforms' chance-based features last year.

Charlie Chai, a Shanghai-based analyst at 86Research, said, "The social entertainment market is still experiencing the effects from the recent regulatory crackdown. The gambling-related income grabbed a considerably higher-than-expected share of Tencent Music's revenue, and this component is now evaporating." 

U.S.- listed shares of Tencent Music climbed 2% in early trade in New York. 

The company's online music service income grew 41.1% to 5.02 billion yuan year-on-year, mainly to consistent growth in paid memberships and advertising services.

Tencent Music's profits per American depository share (ADS)stood at 0.83 yuan, compared to 0.72 yuan in the same quarter a year earlier. 

($1 = 7.1991 Chinese yuan renminbi)


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