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Research Alert: Tencent Music Entertainment Group Reports Solid Results In Q1 2026

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

TME reported Q1 2026 normalized EPS of CNY1.46 vs. CNY1.37 prior year, with total revenues growing 7.3% to CNY7.90B supported by strong music services performance. Music-related services surged 12.2% to CNY6.51B while social entertainment declined 11.0%, reflecting successful execution of the dual engine strategy. TME achieved margin expansion to 44.9% from 44.1% through favorable revenue mix shifts toward higher-margin subscriptions and advertising, with operating leverage driving 10.5% adjusted EBITDA growth to CNY2.83B. Strategic initiatives around premium content partnerships with key labels and AI-enhanced offerings are gaining traction, with SVIP membership showing solid adoption. We believe TME's diversification beyond core subscriptions into live performances, advertising, and IP monetization positions the company well for sustained growth. The company is expanding its collaboration with the Tencent ecosystem, particularly Weixin Video Account, to broaden user reach and drive incremental traffic.

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