【招银国际】3Q25 review: investing to expand music product offerings-251113（6页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 13 Nov 2025 CMB International Global Markets|Equity Research|Company Update TME(TME US)TME(TME US)-3Q25 review:investing to expand music product offerings 3Q25 review

2、:investing to expand music product offerings TME announced 3Q25 results:total revenue increased by 21%YoY to RMB8.46bn,and non-IFRS net income was up by 33%YoY to RMB2.41bn,3%and 4%ahead of Bloomberg consensus respectively,mainly thanks to the better-than-expected revenue growth of non-subscription

3、music businesses(+51%YoY)like ads and offline performances.We expect total revenue growth will decelerate to+12%YoY in 4Q25E,largely in line with consensus,mainly due to the normalisation of revenue from offline performances.For FY26E,the company will further step up investment in content and new mo

4、netization opportunities such as offline performance and artist-related merchandise,which may drive sustainable revenue growth but impact short-term margins,in our view.We lower our FY26-27E earnings forecast by 3-5%in light of the increased investment.We lower our DCF-derived TP to US$28.0(previous

5、:US$29.50 based on DCF).Maintain BUY.Strong online music business supported by multiple drivers.Online music revenue grew by 27%YoY to RMB6.97bn in 3Q25:1)music subscription revenue was up by 17%YoY to RMB4.50bn(53%of total revenue),with the number of subscribers up by 6%YoY to 125.7mn and monthly A

6、RPPU up by 11%YoY to RMB11.9.The solid ARPPU growth was mainly driven by the expansion of SVIP program.2)Non-subscription music revenue grew by 51%YoY to RMB2.47bn(29%of total revenue),primarily due to the robust YoY growth of revenue from offline performances,ads and artist-related merchandise.Reve