Company Reports

September industry data showed broadly stable paying ratios and rising premium-tier penetration at Tencent Music and Cloud Music. Meanwhile, our recent checks on ByteDance's Soda Music found fewer AI covers and more tracks available only to paying users.

Tencent Music's second-quarter organic revenue grew about 1%, with net profit up 4%. Despite the in-line results, shares fell 12% after the company lowered second-half margin guidance due to lower profitability at recently acquired Ximalaya, which had not been disclosed at the time of acquisition.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the clear market leader. While it is often compared with Spotify, we believe Tencent Music enjoys a more favorable competitive position due to its deep integration within the broader Tencent ecosystem, the absence of YouTube as a free streaming alternative, a wider range of service offerings including livestreaming and karaoke, and a stronger focus on in-house content development.

Tencent Music's first-quarter revenue growth decelerated, with membership revenue rising just 7%, down from 13% in the previous quarter, while margins remained stable. On the same day, China's State Administration for Market Regulation approved the firm's acquisition of podcast provider Ximalaya.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the clear market leader. While it is often compared with Spotify, we believe Tencent Music enjoys a more favorable competitive position due to its deep integration within the broader Tencent ecosystem, the absence of YouTube as a free streaming alternative, a wider range of service offerings including livestreaming and karaoke, and a stronger focus on in-house content development.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the clear market leader. While it is often compared with Spotify, we believe Tencent Music enjoys a more favorable competitive position due to its deep integration within the broader Tencent ecosystem, the absence of YouTube as a free streaming alternative, a wider range of service offerings including livestreaming and karaoke, and a stronger focus on in-house content development.

Despite delivering strong earnings, Tencent Music's guidance points to a deceleration in growth amid competitive headwinds from ByteDance's Soda Music. Management's decision to stop disclosing user metrics on a quarterly basis adds to fears that the worst is yet to come.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

Recent weakness in Chinese music streaming stocks, Tencent Music and NetEase Cloud Music, has been driven by investor anxiety over a new competitive threat, Soda Music, a streaming platform backed by ByteDance's very popular short-form video app Douyin.

Tencent Music reported another strong quarter, with revenue growth accelerating to 21% year over year in the third quarter, with by a 33% rise in recurring net profit. Management’s early 2026 commentary suggests subscription growth may moderate due to a tougher comparison base.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

Tencent Music reported accelerated revenue growth of 18% year over year in the second quarter of 2025, alongside a 37% rise in recurring net profit.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

Music is playing an increasingly important role in the daily lives of Chinese consumers. Leading music streaming platforms, Tencent Music and NetEase Cloud Music, continue to demonstrate strong pricing power, high user stickiness, and growing operating leverage.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

Tencent Music has announced plans to acquire Ximalaya, China's largest online audio and podcast platform, which holds a 25% market share. The transaction, to be funded through cash and equity, values Ximalaya at around USD 2.7 billion, or 3.1 times 2023 revenue.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.

Tencent Music reported accelerating revenue growth of 9% year over year in the first quarter of 2025, alongside a robust adjusted net profit growth of 25%. Management reaffirmed its guidance for continued revenue acceleration and expanding operating margins for the full year.

The music streaming industry in China is still in its early stages of development, and Tencent Music has established itself as the largest player in the market, with around 600 million monthly active users. While it is often compared with Spotify, Tencent Music enjoys a more favorable competitive position in China due to its unique integration within the broader Tencent ecosystem, the absence of YouTube as a competitor, a wider range of service offerings, and a stronger focus on in-house content development.