NEW YORK, March 19, 2026, 12:09 (EDT)
Tencent Music Entertainment Group’s U.S. shares edged up 0.8% to $10.38 late Thursday morning in New York, clawing back just a fraction after this week’s tumble. Even with that move, the stock remained well under Tuesday’s bruising $11.37 close, when it plunged 24.65%.
Investor worries keep mounting, but the focus has shifted: the question isn’t if TME will grow, but how much of that growth will actually show up, especially after the company’s softer 2026 outlook. According to Nomura analysts, management flagged first-quarter revenue of 7.9 billion yuan—a 7% gain year-over-year, but still trailing consensus by roughly 5%. Music subscription sales are only expected to climb 6%, while the market had hoped for a 13% jump. The full-year revenue forecast landed about 2% short of consensus, and the adjusted profit outlook fell flat as well.
The numbers Tuesday pointed to ongoing momentum: revenue for the fourth quarter was up 15.9% to 8.64 billion yuan. Sales from online music services surged 21.7%, and music subscriptions gained 13.2%. Paying users ticked up 5.3% to 127.4 million, though monthly active users slipped 5% to 528 million. The board set an annual cash dividend of $0.24 per ADS.
Investors zeroed in on what Tencent Music plans to cut: after this quarter, the company will stop reporting monthly active users, paying users, and ARPPU — that’s average revenue per paying user. Executive Chairman Cussion Pang described TME as having acted “with discipline.” CEO Ross Liang emphasized the company’s “agile” approach as AI and consumer preferences keep shifting. Liang also noted SVIP, the firm’s top-tier subscription, surpassed 20 million users by year-end. Tencent Music
Broker calls took a more cautious tone on Wednesday. Fawne Jiang at Benchmark lowered her rating to Hold from Buy, citing rising uncertainty for fiscal 2026. Over at JPMorgan, Alex Yao dropped TME to Neutral from Overweight, setting a $12 target and describing the business as a “lower-visibility” monetization play. Mizuho’s Wei Fang maintained his Outperform stance but shaved his price target to $23, characterizing the situation as a “dilemma between near-term operating metrics vs strategic execution.” TipRanks
Barclays was the latest to make a move Thursday, with analyst Jiong Shao trimming his price target down to $20 from $28 while sticking to an Overweight call. Shao flagged stepped-up AI content pushes from competitors, suggesting TME might be on the defensive heading into fiscal 2026.
It’s not just music feeling the squeeze. Parent company Tencent announced this week plans to ramp up AI investment in 2026, aiming to catch up with Alibaba and ByteDance. Chip export restrictions have already squeezed its capital spending for 2025, highlighting the rapid shifts reshaping the economics for Chinese internet firms.
The risks aren’t hard to spot. As revenue from advertising, live events, merchandise, and other IP-related streams picks up, investors could find the business tougher to gauge—especially with quarterly user data going away. Benchmark flagged the 2026 forecast as “increasingly uncertain,” while Barclays suggested TME is likely in “defense” mode this year. That’s leaving buyers on edge for now. Tencent Music
