Tencent Music beats revenue estimates

China’s Tencent Music Entertainment Group beat first-quarter revenue estimates on Monday, helped by steady growth in paid subscriptions and advertising services on its Spotify-like music streaming platform.

The price of US listed shares of Tencent Music Entertainment rose 1.8% in premarket trade.

The audio entertainment platform reported revenue of 6.77-billion yuan ($935.9m) for the quarter ended March 31.

This performance exceeded analysts’expectations of 6.63billion yuan, according to LSEG data. Revenue, however, dropped 3.4% from a year earlier. The company has bolstered its growth by capitalising on its position as the largest Chinese music-streaming platform with an attractive licensed music library while continuing to focus on advertising services and artist merchandise.

Paying users at its online music streaming service — which is a key metric for the company — rose 20.2% to 113.5million from a year earlier.

The audio entertainment platform — which operates music apps such as QQ music, Kugou music, Kuwo music and WeSing — reported a 39.2% jump in revenue from its music subscriptions to 3.62-billion yuan. The company’s revenue from online music services rose 43%, driven by solid growth in music subscription revenue.

However, revenue from the company’s social entertainment services registered a decrease of 49.7%, which was a result of the continued effects of the government’s crackdown on online gambling in 2023 as well as increased competition from rival NetEase’s Cloud Music and Bytedance-owned short video sharing platform Douyin.

Naspers, which owns about 25% of Tencent through its internet arm Prosus, saw its share price on the JSE rise 2.12% on the day to R3,851.

Prosus’ share price was up 1.52% at R684.