TENCENT MUSIC ENTERTAINMENT(1698HK):1Q24 ASTONISHING MUSIC;SUSTAINABLE MUSIC MOMENTUM AND NEW RECURRING ANNUAL DIVIDEND POLICY
TENCENT MUSIC ENTERTAINMENT(1698HK):1Q24 ASTONISHING MUSIC;SUSTAINABLE MUSIC MOMENTUM AND NEW RECURRING ANNUAL DIVIDEND POLICY
1Q24 total revenue was RMB6.8bn, beating consensus and BOCIe by 3% on outstanding music. Music revenue grew at 43% YoY to RMB5.0bn mainly contributed by music subs and music ad. Efficient operations and successful multi-channel promotions during CNY drove historically high of 6.8m quarterly paying net adds to 113.5m while ARPPU was relatively stable QoQ at RMB10.6. 40.9% GPM and efficient opex led to 25.2% adj. NPM, beating consensus. We deem Co. will reap sustainable financial rewards due to their strengthened and diversified music monetisations driven by strong operational executions, committed investments and enhanced efficiency on flourishing music ecosystems. Coupled with capital return package consisting of consistent buyback execution and recurring annual dividend policy, maintain BUY and raise our TP to US$16.0/HK$63.0.
24年第一季度的總收入爲68億元人民幣，在出色的音樂方面比市場預期和BoCie高出3％。音樂收入同比增長43％，達到50億元人民幣，主要來自音樂訂閱和音樂廣告。人民幣期間的高效運營和成功的多渠道促銷推動了680萬個季度淨收入的歷史新高，達到1.135億元，而ARPPU季度相對穩定，爲人民幣10.6元。40.9％的GPM和高效的運營支出使經調整後達到25.2％。NPM，超越共識。我們認爲，Co. 將獲得可持續的財務回報，這要歸功於其強勁的運營執行力、承諾的投資以及蓬勃發展的音樂生態系統效率的提高，他們的音樂貨幣化得到了加強和多元化。再加上包括持續回購執行和定期年度股息政策在內的資本回報計劃，維持買入並將目標值提高至16.0美元/63.0港元。
Key Factors for Rating
評級的關鍵因素
Enhanced and diversified music monetisations drive sustainable growth. We deem Co. to sustainably reap rewards on their strong operational executions and committed investments on music-related content formats (both licensed and original offerings), diversified privileges, innovative features empowered by AIGC capitalisation, improved listening experience on technological upgrade and deepened integrations with Tencent ecosystem. Diversified monetisation models, especially ads and merchandise sales on organically growing music consumptions, will further drive music non-subs. We maintain our 2024-26E music revenue forecasts unchanged by uplifting paying subs estimations by 1% while trimming ARPPU forecasts by 2% to reflect Co.'s operations for L-T sustainable growth. We lift our 2024/25/26 GPM forecasts by 176bps/ 128bps/ 42bps respectively to mainly reflect strong music Op leverage and optimised streaming sharing ratio. Coupled with efficient ROI- oriented opex, we lift our 2024-26 adj. EPADS forecasts by 11-12%.
增強和多元化的音樂貨幣化推動可持續增長。我們認爲，Co. 憑藉其強勁的運營執行力、對音樂相關內容格式（包括許可和原創產品）的投入、多元化的特權、由AIGC資本化賦予的創新功能、通過技術升級改善的聆聽體驗以及與騰訊生態系統的深化整合，將持續獲得回報。多元化的盈利模式，尤其是針對有機增長的音樂消費的廣告和商品銷售，將進一步推動非訂閱音樂的增長。我們維持2024-26年音樂收入預測不變，將付費訂閱者的預期提高了1％，同時將ARPPU的預測下調了2％，以反映Co.s 爲實現L-T可持續增長而開展的業務。我們將2024/25/26年的GPM預測分別上調了176個點子/128個點子/42個點子，這主要反映了強勁的音樂運營槓桿率和優化的直播分享率。再加上以投資回報率爲導向的高效運營支出，我們提高了2024-26年的調整數。EPADS的預測爲11-12％。
1Q24: outstanding quarter on astonishing music; US$210m FY2023 cash dividend. Total revenue was RMB6.8bn (down -3% YoY), 3% higher than consensus and BOCIe. Music revenue accelerated 43% YoY to RMB5.0bn, with music subs and music non-subs logging 40% YoY and 53% YoY respectively. Efficient operations and multi-channel promotions during CNY contributed to historically high of 6.8m quarterly music paying net adds to 113.5m. While monthly ARPPU was relatively stable QoQ at RMB10.6, solid ad on diversified products especially free ads mode on eC advertisers drove music non-subs momentum. Social revenue dropped by -50% YoY to RMB1.8bn. GPM continued to expand by 7.9ppts YoY/ 2.6ppts QoQ to 40.9% due to music Op leverage, revenue mix, original content contribution and improved cost efficiency. Coupled with efficient opex, adj. NPM was 25.2%, beating consensus of 24.1%. Co. repurchased US$61m shares in 1Q24 with remaining 53%/US$264.5m buyback quota till Mar 2025 as of Mar 2024. In addition, Co. has announced a recurring annual dividend plan and decided to pay US$210m for FY2023.
24 年第一季度：本季度表現出色，表現出色；FY2023 現金分紅爲 2.1 億美元。總收入爲68億元人民幣（同比下降3％），比市場預期和中銀國際高出3％。音樂收入同比增長43％，達到50億元人民幣，音樂訂閱量和音樂非訂閱量分別同比增長40％和53％。新年期間的高效運營和多渠道促銷使季度音樂付費淨收入達到1.135億元，創歷史新高，達到680萬張。儘管每月ARPPU環比相對穩定，爲人民幣10.6元，但多元化產品的穩健廣告，尤其是電子廣告商的免費廣告模式，推動了音樂非訂閱勢頭。社會收入同比下降了50％，至18億元人民幣。GPM繼續同比增長7.9個百分點/環比增長2.6個百分點至40.9％，這要歸因於音樂運營槓桿率、收入組合、原創內容貢獻和成本效率的提高。再加上高效的運營支出，adj。NPM 爲 25.2%，超過市場普遍預期的 24.1%。公司在24年第一季度回購了6,100萬美元的股票，截至2024年3月，截至2025年3月，其餘回購額度爲53％/2.645億美元。此外，公司還宣佈了年度定期分紅計劃，並決定爲 FY2023 支付2.1億美元。
Key Risks for Rating
評級的主要風險
Downside risks: 1) key label collaboration; 2) fierce competition; 3) regulation;
下行風險：1）關鍵標籤合作；2）激烈競爭；3）監管；
4) weak macro; 5) ineffective monetisation; 6) ADR delisting.
4）宏觀疲軟；5）貨幣化無效；6）ADR退市。
Valuation
估價
Maintain BUY and raise our P/E based TP to US$16.0/ HK$63.0, derived from 23.0x blended 2024E adj. PER by assuming 70% profit contribution from music (30.0x adj. PER) and 30% from social (5.0x adj. PER) and US$0.68 2024E adj. EPADS (vs. previously US$0.63) on latest Forex and share number assumptions.
維持買入並將基於市盈率的目標價上調至16.0美元/63.0港元，這源於2024財年經調整後的23.0倍混合利潤。PER 假設音樂的利潤貢獻率爲 70%（調整後30.0倍）PER）和 30% 來自社交（調整後5.0倍）PER）和經調整後的2024億美元0.68美元。根據最新的外匯和股票數量假設，EPADS（之前爲0.63美元）。
譯文內容由第三人軟體翻譯。