Understanding the Market | Tencent Music-SW rose over 3% during the session, institutions suggest that the company's acquisition of Ximalaya may enhance the attractiveness of its SVIP program

Tencent Music-SW rose over 3% during the session, and as of the time of writing, it is up 2.27%, priced at HKD 74.25, with a transaction volume of HKD 61.1852 million. Nomura released a research report stating that Tencent Music-SW has reached a merger agreement with Ximalaya, aligning with Tencent Music's investment strategy to strengthen its content ecosystem and potentially enhance its content supply capabilities in the long audio field. The firm believes that Ximalaya is a leader in China's long audio market, providing diversified content including audiobooks, podcasts, and radio programs. According to QuestMobile data, Ximalaya's average monthly active users (MAU) reached 74 million in the first quarter of this year, with an average daily usage time of 29 minutes. Furthermore, the firm expects that the Ximalaya and Tencent Music Super VIP (SVIP) membership program may generate synergies, as free access to long audio content has proven effective in enhancing SVIP user retention rates, and the expanded long audio content from Ximalaya should increase the attractiveness of the SVIP program. It is anticipated that the growth of SVIP members will drive an increase in Tencent Music's average revenue per paying user (ARPPU) for online music, enhancing the visibility of the growth prospects for online music subscription revenue