腾讯-2019年Q1腾讯音乐财报英文-20195-6页_234kb

Tencent Music Entertainment Group Q1 2019 Financial Summary

Core Financial Performance

Tencent Music Entertainment Group ("Tencent Music") reported strong financial results for the first quarter of 2019, showing consistent growth across multiple metrics:

• Total Revenues: RMB5.74 billion (US$855 million), up 39.4% year-over-year from RMB4.12 billion in Q1 2018.
• Operating Profit: RMB1.15 billion (US$171 million), an increase of 22.9% compared to RMB933 million in Q1 2018.
• Net Profit Attributable to Equity Holders: RMB987 million (US$147 million), up 17.4% year-over-year from RMB841 million in Q1 2018.
• Non-IFRS Net Profit: RMB1.20 billion (US$179 million), up 14.9% year-over-year from RMB1.05 billion in Q1 2018.

Key Business Metrics

Tencent Music's key operating metrics showed positive growth across both online music and social entertainment services:

• Mobile MAU - Online Music: 654 million, up 4.6% from 625 million in Q1 2018.
• Mobile MAU - Social Entertainment: 225 million, up 0.4% from 224 million in Q1 2018.
• Paying Users - Online Music: 28.4 million, up 27.4% from 22.3 million in Q1 2018.
• Paying Users - Social Entertainment: 10.8 million, up 12.5% from 9.6 million in Q1 2018.
• Monthly ARPPU - Online Music: RMB8.3, a slight decrease of 1.2% from RMB8.4 in Q1 2018.
• Monthly ARPPU - Social Entertainment: RMB127.5, up 28.1% from RMB99.5 in Q1 2018.

Revenue Breakdown

• Online Music Services Revenue: RMB1.61 billion (US$239 million), up 28.0% year-over-year, driven by user subscriptions, content licensing, and digital music album sales.
• Social Entertainment Services and Others Revenue: RMB4.13 billion (US$616 million), up 44.3% year-over-year, primarily due to growth in online karaoke and live streaming services.

Cost of Revenues

• Cost of Revenues: RMB3.70 billion (US$552 million), up 52.2% year-over-year, mainly due to increased content fees and revenue sharing expenses.

Gross Profit

• Gross Profit: RMB2.03 billion (US$303 million), up 20.8% year-over-year, with a gross margin of 35.4%.

Operating Expenses

• Total Operating Expenses: RMB1.04 billion (US$155 million), up 28.3% year-over-year, with the ratio of operating expenses over revenue improving to 18.1%.
  • Selling and Marketing Expenses: RMB437 million (US$65 million), up 20.1% year-over-year.
  • General and Administrative Expenses: RMB602 million (US$90 million), up 35.0% year-over-year, mainly due to higher employee benefits.

Earnings per Share

• Basic Earnings per ADS: RMB0.61 (US$0.09)
• Diluted Earnings per ADS: RMB0.59 (US$0.09)
• Non-IFRS Basic Earnings per ADS: RMB0.74 (US$0.11)
• Non-IFRS Diluted Earnings per ADS: RMB0.72 (US$0.11)

Cash Flow and Liquidity

• Net Cash Provided by Operating Activities: RMB926 million (US$138 million), significantly higher than RMB74 million in Q1 2018.
• Net Cash Used in Investing Activities: RMB3.41 billion (US$508 million), primarily due to term deposits.
• Cash and Cash Equivalents: RMB14.7 billion (US$2.19 billion) as of March 31, 2019, compared to RMB17.36 billion as of December 31, 2018.
• Total Cash and Cash Equivalents and Term Deposits: RMB18.1 billion (US$2.70 billion) as of March 31, 2019.

Strategic Highlights

• Content Expansion: Tencent Music expanded its music library to over 35 million tracks, including partnerships with leading music labels such as SM Entertainment Group.
• Original Soundtrack Music: Collaborated with music labels to promote original soundtrack music for popular movies and TV shows.
• Product Innovation: Launched features such as "Grab the Mic" on WeSing, improved user experience through data analytics, and introduced audio settings that mimic virtual surroundings.
• User Engagement: Continued to expand online music subscriber base and increase retention rates, with a focus on transitioning to a pay-for-streaming model.

Non-IFRS Financial Measures

• Non-IFRS Net Profit: RMB1.20 billion (US$179 million), up 14.9% year-over-year, excluding amortization of intangible assets, share-based compensation expenses, net gains or losses from investments, and fair value changes on puttable shares.

Conference Call Details

• Date: Monday, May 13, 2019, at 8:00 P.M. Eastern Time or 8:00 A.M. Beijing Time on Tuesday, May 14, 2019.
• Dial-in Numbers:
  • United States Toll Free: +1-888-317-6003
  • International: +1-412-317-6061
  • China Toll Free: 400-120-6115
  • Hong Kong Toll Free: 800-963-976
  • Access Code: 1950032
• Replay Available Until: May 20, 2019
• Webcast: Available at https://ir.tencentmusic.com/

About Tencent Music

Tencent Music is the leading online music entertainment platform in China, operating popular apps such as QQ Music, Kugou Music, Kuwo Music, and WeSing. The company aims to use technology to enhance the role of music in people's lives through content creation, consumption, sharing, and interaction.

Disclaimer

This press release contains forward-looking statements and is subject to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Actual results may differ due to various risks and uncertainties. Investors are encouraged to review the full financial statements and non-IFRS reconciliation for detailed information.