Tencent Music Entertainment

TME

Internet Content & Information · Communication Services

Price

$8.80

-0.05 (-0.56%)

Market Cap

$13.53B

Exchange

New York Stock Exchange

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Good

Growth

Mixed

Cash Flow

Exceptional

Stability

Exceptional

Valuation

Strong

Dividends

Mixed

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Share count falling — buybacks

−7.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 1.68B (2021) → 1.55B (2025)

Winston Score History

The full picture

Tencent Music Entertainment Group is China's largest online music platform. It runs several apps — QQ Music, Kugou, and Kuwo — where hundreds of millions of people in China stream songs, listen to live performances, and watch music videos. The company is majority-owned by Tencent, one of China's biggest tech companies, which gives it deep ties to popular apps like WeChat.

Tencent Music makes money mainly through paid subscriptions for ad-free music streaming and through users spending money on virtual gifts during live music shows. It operates almost entirely in China and generates strong profits, with operating margins above 30%. Its large music library and exclusive licensing deals with major record labels give it a competitive edge, but the live entertainment segment has been shrinking as user habits shift. The key growth driver going forward is converting more of its massive free user base into paying subscribers, though tighter government regulation of China's internet industry remains an ongoing risk.

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.8% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+0.0% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

¥2.3B/ year

7.0% of revenue

Below sector average (12%)

Research and development spending

Insider Activity

27.2%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

¥67.1B cash & investments

Quarterly Free Cash Flow

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Tencent Music Entertainment is growing revenue at 6% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale

Gross Margin

44.2%

Healthy — 44.2% gross margin

Profit after running costs

Operating Margin

34.0%

Excellent — 34.0% operating margin

Return on the money invested

ROCE

11.3%

Below par — 11.3% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth

Sales YoY

+9.0%

Steady sales growth (+9.0% YoY)

Profit growth

EPS YoY

-16.3%

Earnings shrinking (-16.3% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is

EPS Consistency

5/8 quarters

Mixed — about half the quarters showed growth

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Cash Flow

Profit that turns into cash

Cash Conversion

130%

Turns 130% of profit into real cash

Spare cash per sale

FCF Margin

26.9%

Converts sales into free cash efficiently (26.9%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns

Debt / Equity

0.21

Conservative — low debt load (0.21)

Covers its interest

Interest Cover

76.76x

Comfortably covers interest (76.8x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit

P/E Ratio (TTM)

10.3x

Attractive valuation — P/E 10.3

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year

P/E vs Forward

+1.8

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Dividend

Dividend Yield

2.86%

Moderate income — 2.86% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record

Dividend Growth

N/A

Data not available

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