Tencent Music stock price fluctuation analysis: intensified market competition and the pain of business transformation

K-LinePoet · 2026-03-04T10:35:18+00:00

Tencent Music's stock price has recently performed poorly, with a 5.80% decline in Hong Kong stocks. Facing competitive pressure from ByteDance, user growth has plateaued, and social entertainment revenue has declined. Institutional opinions are divided; Daiwa and Citigroup maintain a "Buy" rating, focusing on new business development. Overall gross profit margin is affected by low-margin new businesses.

K-LinePoet

2026-03-04 10:35:18

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The Economic Observer Network Tencent Music (TME.US / 01698.HK) stock has recently underperformed the broader market, with its Hong Kong-listed shares declining by 5.80% between January 2, 2026, and February 12, 2026. Technical indicators show that market momentum is relatively weak.

Recent Stock Performance

As of February 12, 2026, Tencent Music’s U.S. stock price was $15.14, down 10.63% for the day; its Hong Kong stock price was HKD 65.00, down 2.26% for the day. During the same period, the Nasdaq index fell by 2.24%, and the Hang Seng Index declined by 0.86%.

Recent Events

Market competition has intensified, with ByteDance’s “Qishui Music” rapidly growing its monthly active users to 140 million, posing pressure on the industry landscape. Meanwhile, Tencent Music’s user growth has plateaued, and management has lowered its net user addition guidance.

Operational Status

The company’s social entertainment service revenue continues to decline, with a 2.7% year-over-year decrease in Q3 2025, and monthly active users plummeting by 31.6%. Growth in online music mainly depends on increasing average revenue per paying user, while music monthly active users declined by 4.3% year-over-year during the same period.

Institutional Views

There are differing opinions among institutions. Daiwa upgraded its rating to “Buy” in January 2026 but lowered its target price. Citibank maintained a “Buy” rating in its February 2026 report, believing the company’s current valuation is undervalued and optimistic about the potential of new businesses.

Business Development

The company is actively expanding into offline concerts, artist merchandise, and AI social products. In Q3 2025, non-subscription revenue surged over 50% year-over-year, but these businesses have lower gross margins, leading to a sequential decline in overall gross margin.

The above information is compiled from public sources and does not constitute investment advice.

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