2Q26 Results: Ximalaya Profit Contribution In-line; Core Business Under Pressure

研报英文原文证据摘录

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M

Update

August 11, 2026 10:47 AM GMT

Tencent Music Entertainment Group | Asia Pacific

Morgan Stanley Asia Limited+

Yang Liu

Equity Analyst

2Q26 Results: Ximalaya Profit

Contribution In-line; Core

Business Under Pressure

Tom Tang

Equity Analyst

Gary Yu

Equity Analyst

AlphaSignals Earnings Reaction

Unchanged

Modest upside

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

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

Greater China Media | China

sequential decline.

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 10, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Avg daily trading value (mn)

Share repurchase accelerated meaningfully after closing the Ximalaya acquisition.

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

EPS (Rmb)**

Prior EPS (Rmb)**

EPS (Rmb)§

ModelWare EPS (Rmb)

Revenue, net (Rmb mn)

EBITDA (Rmb mn)

ModelWare net inc

(Rmb mn)

P/E

P/BV

EV/EBITDA

Div yld (%)

FCF yld ratio (%)**

RNOA (%)

ROE (%)

Net debt/EBITDA

6.17

6.44

6.95

7.35

6.03

6.54

7.16

7.80

6.19

6.44

6.95

7.35

32,902 36,966 40,347 41,975

9,495 12,557 13,243 13,681

9,627 10,410 11,162 11,729

Key Takeaways

Ximalaya's contribution is smaller than MSE on topline but in line on operating

profit, due to solid opex control.

TME's core membership service revenue remains under pressure with a

TME started consolidating Ximalaya's financials on 18 May 2026, which contributed

to the YoY growth and led to a bigger variance vs. consensus forecasts (which has

yet to factor in the acquisition).

2Q26 total revenue was Rmb8.93bn (+5.8% YoY, 3.6% lower than MSE). Ximalaya

contributed Rmb407mn, vs. MSE of Rmb625mn.

• Revenue from music related services grew 11% to Rmb7.6bn.

• Revenue from membership services grew 8.1% YoY. Excluding the

Ximalaya contribution, we estimate membership revenue to keep

declining QoQ, suggesting sustained competitive pressure. SVIP is doing

well, while competition stays in the low-end market.

…