Tencent US-Listed Stock Dives as Karaoke Unit Revenue Plummets
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Key TakeawaysTencent Music Entertainment Group posted a big decline in second-quarter revenue for its social entertainment services, which includes its karaoke app WeSing.The Chinese company also posted a drop in monthly average users.Tencent has been hurt by tough restrictions from Beijing on streaming services.
American depositary receipts (ADRs) of Tencent Music Entertainment Group (TME) sank Tuesday after the Chinese music streaming service posted worse-than-expected social entertainment services revenue as it dealt with government restrictions on the industry.The company reported second-quarter revenue fell 1.7% year-over-year to 7.16 billion Chinese yuan ($985 million), a tick above consensus forecasts of analysts polled by Visible Alpha. Earnings per ADS of 1.07 yuan ($0.15) also narrowly beat estimates.Social Entertainment Services Revenue Sinks 45.8%However, for its social entertainment services segment, which includes its karaoke app WeSing, average revenue per paying user (ARPPU) slumped 45.8% year-over-year, and mobile monthly average users (MAU) dropped 31.6%. The company explained that was "mainly the result of adjustments to certain live-streaming interactive functions and more stringent compliance procedures we started to implement in the second quarter of 2023, as well as increased competition from other platforms."Executive Chair Cussion Pang said Tencent remains optimistic about the music industry’s long-term potential, and is "committed to sustainably achieving our mid- to long-term goals, at a healthy pace and with the right balance."Tencent Music Entertainment Group ADRs sank 16% to $10.99 as of 10:45 a.m. ET Tuesday but are 22% higher for the year. Read the original article on Investopedia.
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