New York-listed Tencent Music Entertainment (TME) share prices have dropped following the Monday release of the company’s unaudited second-quarter financial report — despite a 31% year-on-year growth in revenue.
China’s TME is owned by the broader, Hong Kong-listed Chinese conglomerate Tencent Holdings. The music company is currently in negotiations with French media giant Vivendi for a 10% stake in Universal Media Group, for a potential $3.36 billion.
According to the unaudited Q2 report, TME’s total revenue grew to RMB5.9 billion ($835 million), but it still missed estimates of RMB5.95 billion ($842 million), Reuters cited IBES data from Refinitiv as saying. Net profits only rose 2.5% to RMB9.27 million ($1.3 million).
One cause for investor concern is that the monthly average revenue per user of its social entertainment services — a closely tracked measure of growth — saw its slowest increase since the firm went public last December, rising just 16.5% to RMB130.2 ($18.45), according to Reuters.