Tencent Music Entertainment Group

Tencent Music Entertainment Group has priced its public offering of US$1,000 million aggregate principal amount of senior unsecured notes, comprising US$500 million of 5.050% notes due 2031 and US$500 million of 5.650% notes due 2036. The company expects net proceeds of approximately US$991.9 million, which it plans to use for general corporate purposes, including refinancing offshore indebtedness and share repurchases. The notes are registered under the U.S. Securities Act and are expected to be listed on the Stock Exchange of Hong Kong. Joint bookrunners include J.P. Morgan Securities LLC, Goldman Sachs (Asia) L.L.C., and The Hongkong and Shanghai Banking Corporation Limited, with UBS AG Hong Kong Branch, Bank of China Limited, and MUFG Securities Asia Limited serving as joint lead managers.

Tencent Music Entertainment Group reported second-quarter 2026 total revenue of RMB 8.9 billion, up 6% year over year, with the newly consolidated audio platform Ximalaya contributing roughly RMB 0.4 billion. Music-related services revenue climbed 11%, membership revenue rose 8% to RMB 4.8 billion, and adjusted EBITDA increased 5% to RMB 3.3 billion. Management highlighted live entertainment and artist merchandise as the fastest-growing segment, with strong double-digit growth, while gross margin slipped slightly to 44.2% from 44.4% a year earlier. The company repurchased 43.5 million shares for $400 million during the quarter and held RMB 44.2 billion in cash, deposits and short-term investments.

Tencent Music Entertainment reported second-quarter 2026 non-GAAP EPADS of $0.25, beating analyst estimates by $0.01, while revenue of $1.32 billion exceeded expectations by $20 million and grew 11.9% year-over-year. Music-related services revenue reached RMB7.61 billion, or US$1.12 billion, an 11.0% increase from a year ago, and membership services revenue rose 8.1% to RMB4.79 billion, or US$706 million. The company held total cash, cash equivalents, term deposits, and short-term investments of RMB44.22 billion, equivalent to US$6.52 billion, as of June 30, 2026.

The SPDR S&P China ETF, trading under the symbol GXC, has an implied analyst target price of $125.80 per unit based on the weighted average of analyst targets for its underlying holdings. With GXC recently trading near $85.90, this implies a potential upside of 46.44%. Three holdings with notable upside include EHang Holdings Ltd, which has an average analyst target of $19.20 per share, 213.18% above its recent price of $6.13; MINISO Group Holding Ltd, with a target of $22.23, 94.87% above its recent price of $11.41; and Tencent Music Entertainment Group, with a target of $15.17, 80.82% above its recent price of $8.39.

Tencent Music Entertainment Group reported a 7.3% year-over-year increase in total revenues to RMB7.90 billion for the first quarter of 2026. Music-related services revenue grew 12.2%, driven by a 6.6% rise in membership revenue and a 28.0% surge in non-membership music service revenue. Adjusted EBITDA reached RMB2.83 billion, up 10.5%, while non-IFRS net profit came in at RMB2.27 billion. The company ended the quarter with RMB41.00 billion in total cash, cash equivalents, and short-term investments, supporting continued investment in intellectual property and AI-driven content tools.