Daiwa downgraded Tencent Music's target price to 91 yuan, reiterating "Outperform the Market."
Daiwa's research report indicates that Tencent Music (01698.HK) had a solid performance in the third quarter, with revenue and earnings per share exceeding market expectations by 3%. The revenue surprise mainly came from a strong 51% year-on-year growth in non-subscription music revenue. However, its ADR price fell, reflecting market concerns about the competitive landscape and a gross margin guidance for 2026 that was below expectations.
The firm reiterated its "Outperform" rating but lowered its earnings per share forecast for 2025 to 2027 by 9% to 14% due to a decrease in subscription revenue, and reduced the target price from HKD 106 to HKD 91
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