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<Research>CLSA Expects Short-Term Competitive Pressure to Affect TME-SW's Earnings Trajectory
Recommend 5 Positive 6 Negative 8 |
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TME-SW (01698.HK) delivered solid results for 4Q25, with total revenue and core operating profit growing by 15.8% and 26% YoY, supported by a 13% growth in music subscriptions, over 20% growth in advertising, and live performances, according to a report by CLSA. Looking ahead to 2026, management mentioned that short-term subscription revenue growth will slow down due to intense competition, and net profit margin is expected to remain flat or inch down YoY. Sales and marketing expenses are also anticipated to grow faster than revenue, as the company continues to promote its own content and intellectual property to increase user engagement. CLSA believes competitive pressure may persist in the short term, given that Soda Music continues to expand its user base and enrich its content library through AI song remixes, which will significantly impact TME-SW's earnings trajectory. The broker has given TME-SW a target price of HKD92.1 and a rating of Outperform. AAStocks Financial News |
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