TME
Tencent Music
China
★ Quality 25/100Price today
$8.81
what the market pays
Worth
$7.44
calculated cycle value
Price is 18% above its value
charlieapp.co
How many times the cash flow
China · vs 6 peers
You pay 8.8x times this business's cash flow; its sector median is 11.7x.
18% above what Charlie thinks it's worth (7.2x) — you're overpaying, sector or no sector.
Why Overvalued?
The model estimates an intrinsic value of $7.44 per share. Today's price of $8.81 is 16% above the calculated value — the market is paying a premium over what the model sees as fair.
The price is 18% above the calculated value. You're paying more than it's worth.
Buying here lowers your expected return and wipes out the safety margin.
The next reasonable entry zone starts at $7.07.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$5.95
-20% off Value
🟡 Discounted
≤$7.07
-5% off Value
🔴 Today
$8.81
-16% Valor
Overvalued
The market prices it too high versus what the business makes. Patience pays off here.
“Time is the friend of the wonderful company, the enemy of the mediocre.”
— Warren Buffett
Model updated · July 2026
The business
A karaoke machine that prints cash, but Beijing holds the key.
Tencent Music dominates streaming (music by subscription) in China with QQ Music, Kugou and Kuwo. It makes money two ways: monthly subscriber fees and commissions on virtual gifts in its live singing rooms (WeSing).
It has the largest music catalog in China, exclusive licenses, and is plugged into the Tencent and WeChat ecosystem. But music gets licensed to anyone who pays: the moat is wide, not deep.
Revenue history
From $4.2B to $3.9B in 4 years. Sales are shrinking — the engine is losing steam.
Where each $100 of sales goes
Revenue $3.9B · FY2024
Of every $100 in sales, $75 goes to costs and operations; $25 is left as net profit (25% margin).
Catalysts and risks
Paying subscribers topped 100 million and ARPU (revenue per user) keeps climbing.
GM jumped from ~30% to 42% by shifting from virtual gifts toward subscriptions.
Cash with no debt funds buybacks that shrink the share count.
VIE structure: you don't own real shares, just a contract that Beijing could void.
The social entertainment segment is falling due to live-streaming regulation.
Revenue contracting: the Chinese music market is already mature.
Charlie's note
“At ~9x cash flow, no debt and a 42% margin, you pay little for a business that barely grows. The question isn't the price: it's whether you trust Beijing to honor the contract.”
Analysis · June 2026
So when would be a good price for Tencent Music?
By our calculation, not yet. We will email you the day it drops to $7.07 — so you do not have to keep checking.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.