In "The Big Banks," Citigroup: Tencent Music provides an entry opportunity after the pullback, maintaining a target price of 92.1 yuan

The report from Citi Research indicates that Tencent Music (01698.HK) has underperformed the market year-to-date, possibly due to ongoing market concerns about intensified competition, a reassessment of expectations regarding the resumption of K-pop concerts in mainland China, and increased antitrust activities that may impact its acquisition of Himalaya.

The stock is currently trading at a 16.8 times adjusted forecast price-to-earnings ratio for 2026, which is at a discount compared to its mainland peers at 18.5 times. Considering its sustainable subscription model and the competitive products built around fan and artist connections, the firm believes the market has overreacted. The stock has corrected 38% from its high on September 17 of last year, providing a good opportunity at the currently attractive risk-reward level. The firm reiterates its "outperform" rating, maintaining target prices of $23.7 for Tencent Music (TME.US) in the U.S. and HKD 92.1 for Tencent Music's Hong Kong stock