Tencent Music Entertainment Group: 1Q26 In Line; Ximalaya Deal Regulatory Approval Is a Major Positive

研报英文原文证据摘录

Tencent Music Entertainment Group: 1Q26 In Line; Ximalaya Deal Regulatory Approval Is a Major Positive

Update

May 12, 2026 10:48 AM GMT

Morgan Stanley Asia Limited+MTencent Music Entertainment Group | Asia Pacific Yang Liu

Equity Analyst

1Q26 In Line; Ximalaya Deal Yang.Liu@morganstanley.comTom Tang +852 2239-1911

Tom.Tang@morganstanley.com +852 3963-1860

Regulatory Approval Is a Major Gary Yu

Gary.Yu@morganstanley.com +852 2848-6918

Positive

Tencent Music Entertainment Group (TME.N, TME UN)

Greater China Media | China

Reaction to earnings

Stock Rating Equal-weight

Unchanged In-line Meaningful revision higher Industry View In-Line

Impact to our thesis Financial results versus consensus Direction of next 12-month Price target US$12.30

consensus EPS Up/downside to price target (%) 34

Shr price, close (May 11, 2026) US$9.19

Source: Company data, Morgan Stanley Research 52-Week Range US$26.70-8.79

Sh out, dil, curr (mn) 1,558

Mkt cap, curr (mn) US$14,316

Key Takeaways EV, curr (mn) US$5,487

Avg daily trading value (mn) US$31

Together with TME's 1Q results, SAMR granted approval for TME to acquire

Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

Ximalaya, a long-awaited major positive.

EPS (Rmb)** 6.18 6.72 7.22 7.80

We see sizable cost synergy playing out (we project a range of Rmb1.5-2bn). Prior EPS (Rmb)** - - - -

EPS (Rmb)§ 6.03 6.62 7.27 8.02

However, the regulators are imposing a few conditions on the deal, including not ModelWare EPS (Rmb) 6.19 6.72 7.22 7.80

Revenue, net (Rmb mn) 32,902 36,007 39,001 42,016

raising audio book platform prices and abandoning exclusive partnerships. EBITDA (Rmb mn) 8,977 12,296 13,027 13,871

ModelWare net inc 9,627 10,383 11,082 11,890

(Rmb mn)

TME's 1Q26 total revenue was Rmb7.9bn (+7% YoY, in line with our estimate).