--- title: "Acquisition of Ximalaya Finalized, Growth Pressure Persists for Tencent Music" type: "News" locale: "en" url: "https://longbridge.com/en/news/286108747.md" description: "Monthly active users not disclosed" datetime: "2026-05-12T13:23:17.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286108747.md) - [en](https://longbridge.com/en/news/286108747.md) - [zh-HK](https://longbridge.com/zh-HK/news/286108747.md) --- # Acquisition of Ximalaya Finalized, Growth Pressure Persists for Tencent Music Author | Huang Yu After nearly a year, the equity acquisition of Ximalaya by Tencent Music was finally approved by the State Administration for Market Regulation on May 12. Influenced by this news, Tencent Music's pre-market trading in the U.S. once surged by over 10%. As a giant in China's online music industry, Tencent Music is actively strengthening its all-scenario audio moat. This move also represents a breakthrough strategy amid peaking user growth and increasingly fierce competition in the existing market. On May 12, Tencent Music released its first-quarter 2026 report, showing that the company's total revenue in the first quarter reached RMB 7.9 billion, a year-on-year increase of 7.3%. The revenue growth rate declined compared to the fourth quarter of 2025. According to International Financial Reporting Standards (IFRS), the net profit attributable to shareholders of Tencent Music decreased by 51.3% year-on-year to RMB 2.09 billion. This decline was mainly due to a one-time gain of RMB 2.37 billion from the deemed disposal of an associate company in the same period of 2025. Excluding these effects, the non-IFRS net profit attributable to shareholders, which better reflects the performance of core operations, increased by 7% year-on-year to RMB 2.27 billion. Compared to the quarterly profit figures themselves, the market is now more concerned with: Amid peaking traffic and short-video platforms continuously diverting user time, what is the future growth space for Tencent Music? A pain point currently facing Tencent Music is the contraction in monthly active users (MAU) for its online music services. In the fourth quarter of 2025, the MAU for Tencent Music's online music services was 528 million, a 5% decrease from 556 million in the same period of 2024. Perhaps to downplay the narrative of "user scale," Tencent Music did not disclose the latest monthly active user data in its first-quarter 2026 financial report, hoping investors would focus more on membership revenue, which the company has emphasized in recent years. The financial report showed that in the first quarter, Tencent Music's music-related membership revenue increased by 6.6% year-on-year to RMB 4.57 billion, with the growth rate slowing significantly. In recent years, short-video platforms such as Douyin, Kuaishou, and Qishui Music have continued to encroach on user time. Music content is increasingly embedded in short videos, live streams, and social content feeds, rather than being consumed through standalone music apps. Li Chengru, an analyst at Guoyuan International, believes that competition faced by Tencent Music in the online music market has intensified. In addition to competition for user time and bottlenecks in user growth, competitors' free music-listening strategies have affected price-sensitive users, delaying the company's paid conversion process. Against this backdrop, it is difficult for Tencent Music to return to the previous stage of rapid expansion driven by user scale. Tencent Music needs to explore more diversified business models, which is also reflected in the financial report. Data shows that in the first quarter, its music-related non-membership service revenue increased by 28% year-on-year, reaching RMB 1.94 billion. This means that what Tencent Music truly aims to strengthen now is not just "music listening subscriptions," but richer consumption scenarios formed around music IP. From the perspective of the capital market, Tencent Music is currently undergoing a shift in valuation logic. It is no longer an internet platform relying on rapid user scale growth, but increasingly resembles an online entertainment consumption company with stable cash flows. The question remains: After China's online music industry enters the era of stock competition, can Tencent Music continue to create new consumption scenarios? This will determine whether it ultimately becomes a high-dividend value stock or retains the valuation imagination of a growth company. ### Related Stocks - [01698.HK](https://longbridge.com/en/quote/01698.HK.md) - [00700.HK](https://longbridge.com/en/quote/00700.HK.md) - [21213.HK](https://longbridge.com/en/quote/21213.HK.md) - [TME.US](https://longbridge.com/en/quote/TME.US.md) - [000728.CN](https://longbridge.com/en/quote/000728.CN.md) ## Related News & Research - [Tencent Music Sets Record Date for 2026 AGM Voting Eligibility](https://longbridge.com/en/news/285344240.md) - [Research Alert: CFRA Maintains Hold Opinion On Shares Of Tencent Music Entertainment Group](https://longbridge.com/en/news/286133320.md) - [Tencent wins conditional antitrust approval for US$2.4b Ximalaya acquisition](https://longbridge.com/en/news/286127028.md) - [Barclays Sticks to Their Buy Rating for Tencent Music Entertainment Group (TME)](https://longbridge.com/en/news/286226022.md) - [DeepSeek could be valued at up to $50 billion in first fundraising, sources say](https://longbridge.com/en/news/285373932.md)