Tencent Music shares fall on weak earnings outlook

Tencent Music Entertainment Group’s shares slid on Friday after the company issued weaker-than-anticipated revenue guidance for the current quarter.

The Chinese audio streaming giant reported a revenue outlook that fell short of analyst expectations, citing softer-than-projected advertising demand and competitive pressures in the domestic market. The guidance suggested a sequential decline in revenue for the period, reversing expectations of modest growth.

Tencent Music, which operates platforms including QQ Music and KuGou, has faced increasing competition from short-form video services and other entertainment platforms in China. The company’s user engagement metrics have also shown signs of moderating in recent quarters, contributing to investor concerns over its growth trajectory.

Analysts at Citi maintained a neutral rating on the stock, citing the challenging macroeconomic environment and shifting consumer behavior as key headwinds. The bank noted that while Tencent Music remains a dominant player in China’s audio streaming sector, its ability to monetize its large user base has been constrained by regulatory scrutiny and market saturation.

The stock’s decline reflects broader investor caution toward Chinese tech and media companies amid regulatory uncertainty and economic slowdown. Tencent Music’s shares, listed on the New York Stock Exchange under the ticker TME, were down 6.2% at midday, extending losses from the previous session.

The company is scheduled to release its full third-quarter earnings report next month, which will provide further clarity on its operational performance and strategic initiatives to counter competitive pressures.