Hong Kong listed company Tencent Music Entertainment Group issued its second quarterly figures with net profit increasing by 29. 6% year-on-year to 1. 687 million yuan ($221 million) and 34.3 billion yuan ($113 million) in delivery-associated costs. This is despite the company experiencing a slight decline in its revenue but clearly demonstrates the effectiveness of cost control measures coupled by a drive to get the most out of ever growing user base.
Despite a 1. Overall revenue of $7. 16 billion yuan, Tencent Music achieved the increase in its bottom line mostly through cost control. The company realized a relatively large domestic market rise of 13 percent. 3% decline in the cost of its revenues and a 10. Sustaining a 2% reduction in its general and administrative expenses. These cost efficiencies have helped Tencent Music to counter the problems that come with revenue decline in specific sectors.
The decline in revenue was thereby mainly fleeted by a steep 42. Loss of 8% of income from its social entertainment services. This sector, that was, some time ago, one of the main growth engines of the company, has recently been declining. Nonetheless, Tencent Music’s online music services have recorded growth – they have offset the decline of the social entertainment segment.
Growing Revenue Sources
Other new and growing source of music industry revenues include; Revenues from on line music services, which shot up by 27%. New music services offer represent 75% to 85% of total revenues of the company and more than 90 per cent of gross profit. This shows the robustness of the primary business of Tencent Music.
It also published new financial statistics showing that the business experienced a 17.7% increase in its paid subscribers for the online music streaming to reach 117 million in the last quarter. Moreover, the average per paying user in this sector was up by 10.3% to 10.7 yuan. With these figures, it becomes clear how Tencent Music has been able to monetize its free users into its key revenue stream.
The company was established in 2016 after the acquisition of China Music Corp and the digital music department of Tencent, is now China’s most popular online music provider. The firm was listed in New York in the year 2018 and in Hong Kong in the year 2022.
Yet, not all the news was a positive one. Tencent Music’s shares in Hong Kong were down 17% on Wednesday after the news came out. 1% at HK$44. 35 by midday. Currently it is floating in the middle of the 52-Week range which can be attributed to the confusion within the stock market over growth rates.
+ There are no comments
Add yours