(Yicai Global) March 22 -- Shares of Tencent Music Entertainment Group tumbled after China's biggest online music group reported a 9.3 percent decline in revenue last year as subscribers numbers continued to fall.
Tencent Music [HKG: 1698] was trading 7.3 percent lower at HKD27.90 (USD3.56) a share as of 3.49 p.m. in Hong Kong today. Its New York-listed stock [NYSE: TME] tumbled 9.2 percent to USD7.17 yesterday.
Revenue was CNY28.3 billion (USD4.1 billion) in the 12 months ended Dec. 31, the Shenzhen-based firm said in an earnings report released yesterday. Net profit jumped 21 percent to CNY3.7 billion (USD533 million).
The number of paying users of Tencent Music's social entertainment service dropped 24 percent, mainly because of the evolving macro environment, greater competition from other platforms, and the Covid-19 pandemic, the firm said.
Income from online music services rose 8.9 percent to CNY12.5 billion, while that from social media entertainment and other services dropped almost 20 percent to CNY15.9 billion.
“We expect our quarterly revenue from the online music service to exceed those from the social entertainment service at some point within this year,” said Executive Chairman Cussion Pang. “We are confident of achieving year-on-year growth in total revenue and profitability as well as improvement in user quality in 2023.”
In August 2021, Tencent Music, which owns QQ Music, Kuwo Music, Kugou Music, and WeSing, said that it gave up all of its exclusive music copyrights after pressures from anti-monopoly watchdogs in China. Its subscriber count has continuously fallen since then.
Average monthly active users of Tencent Music's online music service fell 7.8 percent to 567 million in the last three months of 2022, according to the earnings report. The figure for social entertainment service MAUs declined 16.6 percent to 146 million.
Tencent Music has been deploying and developing artificial intelligence-generated-content technologies to further empower music content creation and enhance production efficiency, noted Chief Executive Ross Liang.
The company will continue to explore the application of large language models in image, text, video and other content formats, as well as music recommendations and search capabilities, to meet the huge demand for music-related content, he added.
Editors: Dou Shicong, Martin Kadiev