Investment Rating - The report maintains a "Buy" rating for Tencent Music [4] Core Views - In Q3 2024, Tencent Music reported revenue of 7.02 billion RMB, a year-on-year increase of 6.8% and a quarter-on-quarter decrease of 2.0%. The gross margin improved to 42.6%, up 7.0 percentage points year-on-year and 0.6 percentage points quarter-on-quarter, driven by strong growth in music subscription and advertising service revenues, as well as an increase in original content [1][2] - The online music service revenue reached 5.48 billion RMB in Q3 2024, reflecting a year-on-year growth of 20.4% and a quarter-on-quarter increase of 1.0%. The growth was attributed to high-quality content, attractive membership benefits, optimized user operations, and effective promotional measures. The report anticipates continued revenue growth in Q4, projecting it to reach 5.7 billion RMB [2] - The social entertainment service revenue was 1.54 billion RMB in Q3 2024, showing a decline of 23.9% year-on-year and 11.6% quarter-on-quarter, primarily due to adjustments in live interaction features and increased competition from other platforms [2] Financial Summary - The report forecasts the net profit attributable to the parent company for 2024, 2025, and 2026 to be 6.4 billion RMB, 7.9 billion RMB, and 9.5 billion RMB respectively. The previous estimates were 6.7 billion RMB, 8.2 billion RMB, and 10.2 billion RMB, adjusted due to lower gross margin and interest income [3] - The report sets a target price of 56.37 HKD (52.17 RMB) for Tencent Music, based on a P/E ratio of 28 times for 2024 [3]
腾讯音乐-SW：24Q3点评：SVIP驱动会员ARPPU增长，毛利率持续提升