Latest Search
Quote
| Back Zoom + Zoom - | ||||
|
<Research> BOCI Downgrades TME-SW (01698.HK) to Hold, TP Cut to HKD39
Recommend 4 Positive 1 Negative 2 |
||||
|
||||
|
BOCI issued a report stating that TME-SW (01698.HK) delivered 1Q26 results broadly in line with expectations. Despite approval of its acquisition, rising competition and accelerating AI development have increased pressure, prompting the broker to downgrade the rating from Buy to Hold. The report noted that TME-SW's total revenue and adjusted net profit in 1Q26 both grew 7% YoY, largely meeting market expectations. Music revenue rose 12% YoY, of which music subscription revenue increased 6% YoY and music non-subscription revenue surged 28% YoY. The broker believes competition from Soda Music will intensify given its well-established closed-loop ecosystem. Together with the accelerating penetration of AI and the trend toward decentralized music consumption, this is expected to structurally pressure the growth of TME-SW's core music subscription and advertising businesses. BOCI added that although the merger with Ximalaya and the committed USD1 billion share buyback program to be completed between 2H26 and Mar 2027 are expected to provide valuation support, it cut the company's TP from HKD60.8 to HKD39 based on its 2026 forecast adjusted price-to-earnings ratio of 10x. (ha/j) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
AASTOCKS Financial News |
||||
Copied to Clipboard
 |
||||
