More ads, paying users help China’s Tencent Music beat third quarter estimates
- Total revenue was nearly 6 per cent lower year on year, amid an economy where growth has slowed this year due to China’s ‘zero-Covid’ policy
- Net profit attributable to equity holders was 1.06 billion yuan, up from 740 million yuan in the same period last year
Tencent Music Entertainment Corp beat analyst estimates for third-quarter revenue and profit, boosted by a recovery in advertising sales and an increase in the number of paying users on the Chinese music streaming company’s platform.
Excluding items, the company earned 86 yuan (US$12) per American depository share (ADS), above expectations for a profit of 71 yuan per ADS, it said in its quarterly earnings announcement.
Total revenue, however, was nearly 6 per cent lower year on year, amid an economy where growth has slowed this year due to China’s “zero-Covid” policy that has locked down swathes of the population under some of world’s strictest Covid-19 restrictions.
“Even though for the full year, we saw revenue decline on a year over year basis, we are looking forward … to achieving positive revenue growth next year, and as a result, positive growth for profitability as well,” Cheuk Tung Yip, Tencent Music’s chief strategy officer, said in a call after the results were released.
Tencent has been ramping up its original content slate to help put more users behind a paywall. Paying users at its online music streaming service rose to 85.3 million in the quarter from 82.7 million in the second quarter, the earnings statement showed.
Total revenue fell 5.6 per cent to 7.37 billion yuan in the quarter ended September 30, but beat analysts’ average estimate of 7.07 billion yuan, according to Refinitiv data.
Net profit attributable to equity holders was 1.06 billion yuan, up from 740 million yuan in the same period last year.