【招银国际】4Q24 earnings beat; driving quality growth in FY25-250319（6页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 19 Mar 2025 CMB International Global Markets|Equity Research|Company Update TME(TME US)4Q24 earnings beat;driving quality growth in FY25 TME announced 4Q24 financial

2、results:total revenue grew by 8%YoY to RMB7.5bn,largely in line with Bloomberg consensus estimate;non-IFRS net income was up by 45%YoY to RMB2.28bn,15%ahead of consensus estimate,mainly thanks to better-than-expected GPM expansion and opex control.FY24 non-IFRS net income increased by 30%YoY to RMB7

3、.67bn,driven by solid online music revenue growth and GPM expansion.For FY25E,management expects total revenue growth to accelerate and margin to further expand.We forecast FY25 total revenue/non-IFRS net income to grow by 9/16%YoY,with margin expanding at a slower pace given the high base.We slight

4、ly raise our FY25E earnings forecast in view of the better-than-expected GPM expansion trend,and lift our DCF-derived TP by 3%to US$16.50.Maintain BUY.Online music business maintained solid growth.Online music revenue grew by 16%YoY to RMB5.8bn in 4Q24,with subscription/non-subscription revenue up b

5、y 18/12%YoY respectively.TME recorded a QoQ net addition of 2.0mn subscribers to 121mn in 4Q24(+13%YoY),and monthly ARPPU was up by 4%YoY to RMB11.1 in 4Q24.SVIP membership continued to record solid sequential growth in the number of subscribers,ARPPU and engagement.Advertising revenue delivered a s

6、olid YoY growth in 4Q24,mainly driven by the ad-supported mode.Social entertainment and others revenue declined by 13%YoY but grew by 6%QoQ to RMB1.6bn in 4Q24,as the decline in live streaming revenue was partially offset by the solid performance of WeSing.Focus on quality growth in FY25E.Looking ah