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TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis

NYSE:TME - New York Stock Exchange, Inc. - US88034P1093 - ADR - Currency: USD

13.37  -0.05 (-0.37%)

After market: 13.37 0 (0%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to TME. TME was compared to 72 industry peers in the Entertainment industry. TME has an excellent profitability rating, but there are some minor concerns on its financial health. TME has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

TME had positive earnings in the past year.
In the past 5 years TME has always been profitable.
Of the past 5 years TME 4 years had a positive operating cash flow.
TME Yearly Net Income VS EBIT VS OCF VS FCFTME Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

1.2 Ratios

The Return On Assets of TME (8.06%) is better than 91.67% of its industry peers.
TME has a better Return On Equity (10.85%) than 84.72% of its industry peers.
The Return On Invested Capital of TME (8.91%) is better than 81.94% of its industry peers.
Industry RankSector Rank
ROA 8.06%
ROE 10.85%
ROIC 8.91%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
TME Yearly ROA, ROE, ROICTME Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8

1.3 Margins

The Profit Margin of TME (23.39%) is better than 95.83% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
TME has a better Operating Margin (25.88%) than 94.44% of its industry peers.
In the last couple of years the Operating Margin of TME has grown nicely.
With a Gross Margin value of 42.34%, TME perfoms like the industry average, outperforming 45.83% of the companies in the same industry.
TME's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 25.88%
PM (TTM) 23.39%
GM 42.34%
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
TME Yearly Profit, Operating, Gross MarginsTME Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

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6

2. Health

2.1 Basic Checks

TME has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
TME has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
TME Yearly Shares OutstandingTME Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B
TME Yearly Total Debt VS Total AssetsTME Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 20B 40B 60B

2.2 Solvency

TME has an Altman-Z score of 6.10. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
TME has a better Altman-Z score (6.10) than 90.28% of its industry peers.
A Debt/Equity ratio of 0.10 indicates that TME is not too dependend on debt financing.
TME has a better Debt to Equity ratio (0.10) than 70.83% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.1
Debt/FCF N/A
Altman-Z 6.1
ROIC/WACC1.2
WACC7.43%
TME Yearly LT Debt VS Equity VS FCFTME Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B 40B 50B

2.3 Liquidity

A Current Ratio of 2.34 indicates that TME has no problem at all paying its short term obligations.
TME's Current ratio of 2.34 is amongst the best of the industry. TME outperforms 80.56% of its industry peers.
A Quick Ratio of 2.34 indicates that TME has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.34, TME belongs to the top of the industry, outperforming 80.56% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.34
Quick Ratio 2.34
TME Yearly Current Assets VS Current LiabilitesTME Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

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6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 30.93% over the past year.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
TME shows a small growth in Revenue. In the last year, the Revenue has grown by 2.34%.
TME shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.23% yearly.
EPS 1Y (TTM)30.93%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%47%
Revenue 1Y (TTM)2.34%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%8.2%

3.2 Future

The Earnings Per Share is expected to grow by 13.28% on average over the next years. This is quite good.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 10.39% on average per year.
EPS Next Y16.9%
EPS Next 2Y16.02%
EPS Next 3Y16.07%
EPS Next 5Y13.28%
Revenue Next Year9.65%
Revenue Next 2Y10.08%
Revenue Next 3Y10.06%
Revenue Next 5Y10.39%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
TME Yearly Revenue VS EstimatesTME Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 10B 20B 30B 40B 50B
TME Yearly EPS VS EstimatesTME Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 4 6 8

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4

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 19.66 indicates a rather expensive valuation of TME.
83.33% of the companies in the same industry are more expensive than TME, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TME to the average of the S&P500 Index (27.85), we can say TME is valued slightly cheaper.
With a Price/Forward Earnings ratio of 16.92, TME is valued correctly.
Based on the Price/Forward Earnings ratio, TME is valued cheaper than 87.50% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.77. TME is around the same levels.
Industry RankSector Rank
PE 19.66
Fwd PE 16.92
TME Price Earnings VS Forward Price EarningsTME Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA N/A
TME Per share dataTME EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4

4.3 Compensation for Growth

TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of TME may justify a higher PE ratio.
A more expensive valuation may be justified as TME's earnings are expected to grow with 16.07% in the coming years.
PEG (NY)1.16
PEG (5Y)1.81
EPS Next 2Y16.02%
EPS Next 3Y16.07%

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3

5. Dividend

5.1 Amount

TME has a Yearly Dividend Yield of 2.31%.
Compared to an average industry Dividend Yield of 7.28, TME pays a better dividend. On top of this TME pays more dividend than 88.89% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, TME has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.31%

5.2 History

TME does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
TME Yearly Dividends per shareTME Yearly Dividends per shareYearly Dividends per share 2024 2025 0.05 0.1 0.15

5.3 Sustainability

DPN/A
EPS Next 2Y16.02%
EPS Next 3Y16.07%
TME Yearly Income VS Free CF VS DividendTME Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

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TENCENT MUSIC ENTERTAINM-ADR

NYSE:TME (5/1/2025, 9:33:24 PM)

After market: 13.37 0 (0%)

13.37

-0.05 (-0.37%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)03-18 2025-03-18/bmo
Earnings (Next)05-13 2025-05-13/bmo
Inst Owners57.71%
Inst Owner Change1.59%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap22.59B
Analysts82.58
Price Target16.5 (23.41%)
Short Float %5.09%
Short Ratio2.39
Dividend
Industry RankSector Rank
Dividend Yield 2.31%
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-Date04-03 2025-04-03 (0.18)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.87%
Min EPS beat(2)-4.78%
Max EPS beat(2)12.53%
EPS beat(4)3
Avg EPS beat(4)3.52%
Min EPS beat(4)-4.78%
Max EPS beat(4)12.53%
EPS beat(8)6
Avg EPS beat(8)3.05%
EPS beat(12)10
Avg EPS beat(12)4.95%
EPS beat(16)13
Avg EPS beat(16)6.94%
Revenue beat(2)1
Avg Revenue beat(2)-0.08%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)1.21%
Revenue beat(4)2
Avg Revenue beat(4)0.05%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)1.21%
Revenue beat(8)5
Avg Revenue beat(8)0.65%
Revenue beat(12)8
Avg Revenue beat(12)0.9%
Revenue beat(16)9
Avg Revenue beat(16)0.38%
PT rev (1m)11.43%
PT rev (3m)14.88%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)4.93%
EPS NY rev (1m)3.72%
EPS NY rev (3m)3.51%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)0.81%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.09%
Valuation
Industry RankSector Rank
PE 19.66
Fwd PE 16.92
P/S 5.78
P/FCF N/A
P/OCF N/A
P/B 2.68
P/tB 4.15
EV/EBITDA N/A
EPS(TTM)0.68
EY5.09%
EPS(NY)0.79
Fwd EY5.91%
FCF(TTM)N/A
FCFYN/A
OCF(TTM)N/A
OCFYN/A
SpS2.31
BVpS4.99
TBVpS3.22
PEG (NY)1.16
PEG (5Y)1.81
Profitability
Industry RankSector Rank
ROA 8.06%
ROE 10.85%
ROCE 10.62%
ROIC 8.91%
ROICexc 13.81%
ROICexgc 26.83%
OM 25.88%
PM (TTM) 23.39%
GM 42.34%
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
F-ScoreN/A
Asset Turnover0.34
Health
Industry RankSector Rank
Debt/Equity 0.1
Debt/FCF N/A
Debt/EBITDA N/A
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 2.34
Quick Ratio 2.34
Altman-Z 6.1
F-ScoreN/A
WACC7.43%
ROIC/WACC1.2
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)30.93%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%47%
EPS Next Y16.9%
EPS Next 2Y16.02%
EPS Next 3Y16.07%
EPS Next 5Y13.28%
Revenue 1Y (TTM)2.34%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%8.2%
Revenue Next Year9.65%
Revenue Next 2Y10.08%
Revenue Next 3Y10.06%
Revenue Next 5Y10.39%
EBIT growth 1Y53.84%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year35.22%
EBIT Next 3Y20.48%
EBIT Next 5Y16.77%
FCF growth 1YN/A
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1YN/A
OCF growth 3YN/A
OCF growth 5YN/A