【1698】Tencent Music Plunged 23% to 52-Week Low, Revenue Beats Expectations and Increases Dividend Payout. Analysts: Monthly Active Users Declined, Funds Focus on This Metric

Tencent Music (1698)
After announcing earnings on Tuesday’s close, the stock opened sharply lower by 15% today (Wednesday) and continued to decline, once dropping over 23% to a low of 43.6 HKD. Trading volume surged significantly, with over an hour after market open, trading volume already three times that of the previous day. The company’s revenue exceeded expectations and dividends increased, but analysis pointed out that a decline in monthly active users is unfavorable for the company’s outlook. Investors are advised not to buy at current levels to “catch the falling knife.”

The company’s online music monthly active users last quarter were 528 million, down 5% year-over-year. An analyst stated, “This is the data that funds care most about.”

Regarding the stock price trend, he noted that it is still on a downward trajectory. “My first advice is, don’t buy. For friends who don’t hold any stock, don’t plan to bottom fish.” The stock hit a 52-week low, so he strongly advises against buying now. “It’s back to nearly the lows of February last year. Anyone who bought in the past year is ‘caught in a crab trap.’ Such heavy crab positions really shouldn’t be bought.” He also mentioned, “U.S. stocks have been falling from morning to night, and even a technical rebound seems unlikely.”

According to non-IFRS figures, Tencent Music’s net profit per share in Q4 was 1.41 RMB, up 8% year-over-year, but below market expectations. The dividend per share was $0.12, up 33% year-over-year. Revenue increased 15.9% year-over-year to 8.64 billion RMB. Gross profit margin also rose by 1.1 percentage points to 44.7%.

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