(Yicai) Nov. 13 -- Shares of Tencent Music Entertainment Group tumbled after the online music arm of Chinese internet giant Tencent Holdings said the number of monthly active users fell for the 16th consecutive quarter, leading to mounting concerns about increasing competitive pressure, and despite the firm reporting a 36 percent jump in third-quarter net profit.

Tencent Music [HKG: 1698] closed 10.7 percent lower at HKD75.60 (USD9.73) a share in Hong Kong today. Its US-listed stock [NYSE: TME] plunged 8.4 percent to USD19.01 yesterday.

The average number of MAUs of Tencent Music's online music services fell 4 percent to 551 million in the three months ended Sep. 30, according to the Shenzhen-based firm's earnings report released yesterday. However, paying user numbers rose 6 percent to 125.7 million, with the average monthly revenue per such user jumping 10 percent to CNY11.90 (USD1.68).

Tencent Music's third-quarter profit was CNY2.2 billion (USD302 million), while its revenue rose 21 percent to CNY8.5 billion (USD1.2 billion), the report showed. Income from online music services surged 27 percent to CNY7 billion.

"In the third quarter, we delivered another set of solid results, underpinned by the well-rounded performance of our online music business," said Cussion Pang, executive chairman of Tencent Music. "Our ongoing innovations in content enrichment, services expansion to include more live experiences, continued to fuel consistent subscription revenue growth while boosting momentum in non-subscription services, especially in concerts and artist merchandise."

Tencent Music's performance roughly met expectations last quarter, but concerns among investors regarding competition from TikTok's Chinese owner ByteDance have intensified recently, which may pose pressure on short-term market sentiment, BofA Securities reported today, noting that Tencent Music did not disclose the number of premium Super VIP subscribers, which stood at 15 million in the second quarter.

Qishui Music, a music app spun off from TikTok's sister app Douyin, is rapidly expanding its market share in China's online music industry, with its MAUs surging 91 percent to 120 million in September from a year earlier, ranking fourth among mobile music apps in the country, behind Tencent's Kugou, QQ Music, and NetEase's Cloud Music, according to statistics from QuestMobile.

In comparison, Kugou's MAUs fell 8 percent to 210 million in the period, while those of QQ Music dropped 3 percent to 190 million. Cloud Music saw the figure climb 1.5 percent to 147 million.

To counter competitive pressure, Tencent Music is actively working to expand its content ecosystem, acquiring China's leading online audio platform Ximalaya for USD2.9 billion in June. However, it did not disclose any operational data related to Ximalaya.

Editor: Martin Kadiev