Haitong International: Lowering Tencent Music's target price to $17, maintaining an "outperform" rating.

Huatai International has released a research report stating that Tencent Music's total revenue in the fourth quarter of last year exceeded expectations by 3%, with a year-on-year increase of 16% to 8.6 billion yuan; among them, music subscription revenue was lower than expected by 2%, with a year-on-year increase of 13% to 4.6 billion yuan, and advertising and other revenue exceeded expectations by 11%, with a year-on-year increase of 41% to 2.5 billion yuan. Net profit after quarterly adjustments met expectations, with a year-on-year increase of 9% to 2.5 billion yuan, and a net profit margin of 28.8%, slightly lower than expected by 0.6 percentage points. The bank predicts that the average revenue per user in the first quarter will be 11.8 yuan, and the first quarter and full-year music subscription revenue will be 4.5 billion yuan and 18.7 billion yuan respectively, with year-on-year increases of 6% each. Given Tencent Music's long-term copyright cooperation with top singers and music brands, the company enjoys a competitive advantage in these new non-subscription business areas. The bank has lowered its target price from $24 to $17 and maintains an "outperform" rating.