TME(TME)2023-08-14 16:00Financial Performance - Total revenues for Q2 2023 were RMB7.29 billion (US179 million), reflecting a 51.6% year-over-year growth[2]. - TME's operating profit for Q2 2023 was RMB 1,539 million, up from RMB 1,045 million in Q2 2022, representing a 47% year-over-year increase[43]. - The company reported a non-IFRS net profit of RMB 1,348 million for Q2 2023, compared to RMB 892 million in Q2 2022, marking a 51% increase[43]. - Basic earnings per share for Class A and Class B ordinary shares increased to 0.42 in Q2 2023 from 0.27 in Q2 2022, representing a 56% rise[43]. - Non-IFRS net profit for Q2 2023 reached RMB 3,042 million, a 52% increase from RMB 2,004 million in Q2 2022[47]. - The company reported a profit for the period of RMB 2,548 million for the six months ended June 30, 2023, compared to RMB 1,541 million for the same period in 2022[47]. Revenue Breakdown - Revenues from online music services increased by 47.6% year-over-year to RMB4.25 billion (US419 million) due to service enhancement measures[8]. - TME's social entertainment services generated revenues of RMB 3,037 million in Q2 2023, a decline from RMB 4,027 million in Q2 2022, reflecting a 25% decrease[43]. User Engagement - The number of paying users for online music reached 99.4 million, a 20.2% increase year-over-year, with a monthly ARPPU of RMB9.7, marking a 14.1% increase[1][14]. - The company launched a premium package for couples in June 2023, enhancing user experience and engagement[16]. - QQ Music's in-car version 2.0 was launched in June 2023, enhancing user experience and expanding partnerships with car manufacturers[30]. - The company introduced new features across its platforms, including enhanced sound quality in QQ Music and a more intuitive interface in Kugou Music, aimed at increasing user engagement[29]. Cash and Assets - Total cash, cash equivalents, and term deposits as of June 30, 2023, were RMB30.5 billion (US$4.21 billion), up from RMB28.5 billion as of March 31, 2023[13]. - Cash and cash equivalents at the end of Q2 2023 were RMB 12,950 million, compared to RMB 10,044 million at the end of Q2 2022[55]. - Total assets as of June 30, 2023, amounted to RMB 72,466 million, up from RMB 67,009 million at the end of 2022[53]. - Total equity increased to RMB 54,712 million as of June 30, 2023, from RMB 49,127 million at the end of 2022[52]. - The company’s investments accounted for using the equity method rose to RMB 4,483 million as of June 30, 2023, from RMB 4,330 million at the end of 2022[50]. - The company’s term deposits increased to RMB 7,570 million as of June 30, 2023, from RMB 6,530 million at the end of 2022[50]. Future Outlook - The company expects total revenues to decline by a low-to-mid teens percent year-over-year for Q3 2023 and a low-to-mid single-digit percent decrease for the full year 2023[20]. Social Responsibility - The company hosted two charity concerts in Q2 2023, showcasing its commitment to social responsibility and music-based welfare activities[32]. Market Engagement - Tencent Music Entertainment hosted the TMEA 2023 with nearly 40,000 attendees, generating over 10 billion social media views[23]. - The total value of music transactions on the Venus platform exceeded RMB 10 million as of Q2 2023, reflecting significant engagement from indie musicians[25]. Profitability Metrics - Gross margin improved by 4.4 percentage points to 34.3% from 29.9% in the same period of 2022[10]. - TME's gross profit for the first half of 2023 was RMB 4,812 million, compared to RMB 3,923 million in the same period of 2022, indicating a 23% growth[43]. - Net cash provided by operating activities for Q2 2023 was RMB 2,067 million, compared to RMB 1,241 million in Q2 2022[55]. - The company reported a decrease in share-based compensation expenses to RMB 368 million for the six months ended June 30, 2023, down from RMB 430 million for the same period in 2022[47].