TENCENT MUSIC ENTERTAINM-ADR (TME)
US88034P1093 - ADR
We assign a fundamental rating of 7 out of 10 to TME. TME was compared to 77 industry peers in the Entertainment industry. TME gets an excellent profitability rating and is at the same time showing great financial health properties. TME has a decent growth rate and is not valued too expensively. With these ratings, TME could be worth investigating further for quality investing!.
1. Profitability
1.1 Basic Checks
In the past year TME was profitable.
TME had a positive operating cash flow in the past year.
Each year in the past 5 years TME has been profitable.
TME had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.51%, TME belongs to the top of the industry, outperforming 89.61% of the companies in the same industry.
TME has a Return On Equity of 8.80%. This is amongst the best in the industry. TME outperforms 83.12% of its industry peers.
The Return On Invested Capital of TME (6.55%) is better than 81.82% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is significantly below the industry average of 37.70%.
The last Return On Invested Capital (6.55%) for TME is above the 3 year average (5.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.51% | ||
| ROE | 8.8% | ||
| ROIC | 6.55% |
ROA(3y)5.5%
ROA(5y)6.03%
ROE(3y)7.49%
ROE(5y)7.91%
ROIC(3y)5.26%
ROIC(5y)5.81%
1.3 Margins
The Profit Margin of TME (17.73%) is better than 90.91% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
TME has a better Operating Margin (17.21%) than 87.01% of its industry peers.
In the last couple of years the Operating Margin of TME has remained more or less at the same level.
TME has a Gross Margin (35.29%) which is comparable to the rest of the industry.
TME's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.21% | ||
| PM (TTM) | 17.73% | ||
| GM | 35.29% |
OM growth 3Y10.43%
OM growth 5Y-0.23%
PM growth 3Y7.55%
PM growth 5Y12.92%
GM growth 3Y3.42%
GM growth 5Y-1.64%
2. Health
2.1 Basic Checks
TME has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
TME has about the same amout of shares outstanding than it did 1 year ago.
TME has more shares outstanding than it did 5 years ago.
TME has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.25 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a Altman-Z score of 6.25. This is amongst the best in the industry. TME outperforms 90.91% of its industry peers.
The Debt to FCF ratio of TME is 0.98, which is an excellent value as it means it would take TME, only 0.98 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of TME (0.98) is better than 93.51% of its industry peers.
TME has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
TME's Debt to Equity ratio of 0.11 is fine compared to the rest of the industry. TME outperforms 64.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.98 | ||
| Altman-Z | 6.25 |
ROIC/WACC0.88
WACC7.43%
2.3 Liquidity
TME has a Current Ratio of 2.49. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
TME has a Current ratio of 2.49. This is in the better half of the industry: TME outperforms 75.32% of its industry peers.
A Quick Ratio of 2.49 indicates that TME has no problem at all paying its short term obligations.
TME has a better Quick ratio (2.49) than 75.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 27.55% over the past year.
Measured over the past years, TME shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.63% on average per year.
Looking at the last year, TME shows a decrease in Revenue. The Revenue has decreased by -2.07% in the last year.
Measured over the past years, TME shows a small growth in Revenue. The Revenue has been growing by 7.89% on average per year.
EPS 1Y (TTM)27.55%
EPS 3Y8.33%
EPS 5Y22.63%
EPS growth Q2Q9.89%
Revenue 1Y (TTM)-2.07%
Revenue growth 3Y-1.63%
Revenue growth 5Y7.89%
Revenue growth Q2Q-7.16%
3.2 Future
The Earnings Per Share is expected to grow by 16.07% on average over the next years. This is quite good.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.64% yearly.
EPS Next Y19.7%
EPS Next 2Y19.43%
EPS Next 3Y20.65%
EPS Next 5Y16.07%
Revenue Next Year4.06%
Revenue Next 2Y7.95%
Revenue Next 3Y8.71%
Revenue Next 5Y8.64%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.77, the valuation of TME can be described as rather expensive.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than 79.22% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 24.92. TME is around the same levels.
The Price/Forward Earnings ratio is 20.79, which indicates a rather expensive current valuation of TME.
Based on the Price/Forward Earnings ratio, TME is valued cheaper than 83.12% of the companies in the same industry.
TME is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 20.79 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TME is valued cheaper than 80.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.95 | ||
| EV/EBITDA | 25.3 |
4.3 Compensation for Growth
TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
TME's earnings are expected to grow with 20.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.26
PEG (5Y)1.09
EPS Next 2Y19.43%
EPS Next 3Y20.65%
5. Dividend
5.1 Amount
No dividends for TME!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TENCENT MUSIC ENTERTAINM-ADR
NYSE:TME (4/26/2024, 7:19:57 PM)
After market: 12.87 -0.01 (-0.08%)12.88
+0.2 (+1.58%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap22.10B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
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Surprises & Revisions
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.77 | ||
| Fwd PE | 20.79 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1.26
PEG (5Y)1.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.51% | ||
| ROE | 8.8% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.21% | ||
| PM (TTM) | 17.73% | ||
| GM | 35.29% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)27.55%
EPS 3Y8.33%
EPS 5Y
EPS growth Q2Q
EPS Next Y19.7%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.07%
Revenue growth 3Y-1.63%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
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EBIT growth 3Y
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