On November 12, 2019, Tencent Music Entertainment Group released its unaudited financial report for the third quarter ended September 30, 2019.

• The total revenue of Tencent Music Entertainment in the third quarter was 6.51 billion yuan, an increase of 31.0% over the same period last year.

• Tencent Music Entertainment reached 35.4 million online music paying users in the third quarter, an increase of 42.2% over the same period last year.

• The operating profit of Tencent Music Entertainment in the third quarter was 1.19 billion yuan, an increase of 11.9% over the same period last year.

• Tencent Music Entertainment made a net profit of 1.03 billion yuan belonging to the company's shareholders in the third quarter, up 6.4% from the same period last year.

Highlights of financial and operational performance

Three months ending September 30, 2019:

The number of paying users for online music reached 35.4 million, an increase of 42.2% over the same period last year. On a month-on-month basis, the net growth of paid users was 4.4 million, up from 2.6 million in the second quarter and 1.4 million in the first quarter of the same year, the largest net growth since 2016, continuing the recent trend of accelerated growth.

Total revenue rose 31.0% year-on-year to 6.51 billion yuan ($910 million).

Operating profit rose 11.9% year-on-year to 1.19 billion yuan ($166 million).

Net profit attributable to the company's shareholders rose 6.4% year-on-year to 1.03 billion yuan ($144 million).

Net profit attributable to shareholders under non-international financial reporting standards (Non-IFRS) rose 8.0% year-on-year to 1.24 billion yuan ($173 million).

Company and business highlights

The key operating indicators of Tencent Music's online music service and social entertainment service continue to grow.

In the third quarter of 2019, Tencent Music continued to expand his industry-leading content through the following measures:

• (I) expand strategic partnerships with mainstream records and independent brands with long-tail genre music

• (ii) add richer music content, including long audio such as music variety, short videos, podcasts and audiobooks, as well as quality original music produced for games and movies and TV shows.

As China's leading original digital music platform, Tencent musicians under TME provide a full range of services for training and incubating cutting-edge independent musicians. Statistics show that the total number of songs uploaded by cutting-edge musicians on the platform more than doubled in the first nine months of this year compared with the same period last year. Compared with the same period last year, the average daily playback of original songs on the three major digital music platforms, QQ Music, KuGou and Kuwi Music, increased by nearly 200%.

Through diversified interactive activities, Tencent Music has also helped well-known musicians and rookie artists achieve a wider range of music promotion online and offline, including:

• (I) helped Jay Chou's new single "promise not to cry" achieve eye-catching sales, promoted its viral spread on social platforms, and set off an online singing craze among national singing users. Ten days after its release, it accumulated more than 12 million karaoke songs, further expanding its popularity.

• (ii) helps international musicians to promote and effectively reach domestic music fans. For example, after the release of the new Taylor Swift album "Lover" title song of the same name on the company's platform, sales reached nearly 6 million within 24 hours.

• (iii) expand the concert boundaries to provide live broadcast for the TFBOYS sixth anniversary concert, so that fans can express their admiration for their idols through online virtual gift giving.

In addition, in order to meet the needs of users and enhance user participation, Tencent Music continues to invest in product enhancement and innovation, including:

• (I) introduce a large number of high-quality PGC and UGC short video content into the music playback platform

• (ii) add new forms of content (such as micro variety shows) and new features (such as universal chorus) to the national singing platform to encourage user interaction and further enhance the social and youthful attributes of the platform.

• (iii) develop a new music recognition tool to help users identify the background music used in short videos in seconds.

Mr. Peng Jiaxin, CEO of Tencent Music Entertainment Group, said:

Thanks to the continued and healthy development of our online music and social entertainment business, we performed steadily in the third quarter of 2019. Among them, we are very happy to seeThe number of online music paying users accelerated by 42.2% compared with the same period last year, and the number of paying households increased by 4.4 million in the third quarter, both reaching quarterly highs.

More importantly, online music ARPPU rose 3.5% month-on-month, further proving the sustainability of this development. These achievements reflect that we have been highly recognized by the outside world in releasing the core values of music and providing users with more high-quality music value-added services.

Thanks to a large user base and a deep understanding of content trends and user insights, our platform continues to evolve into an excellent platform for musicians to connect fans and give full play to the value of music. On this basis, we will continue to increase investment in all kinds of high-quality content, technology and services, and continue to create a more perfect one-stop music entertainment platform.