That said, in the early hours of this morning, Tencent Music released its financial report for the fourth quarter and full year of 2021. Eight sisters looked at it, overall, the basic disk of Tencent Music in 2021 is still quite stable, and the online music paying users and payment rates continue to grow, reaching a new high. At the same time, Tencent Music's buyback program is continuing, and it has disclosed the news that it will be listed for the second time in Hong Kong. Well, that's all positive.
Well, no nonsense, let's talk in detail about the highlights of Tencent Music's financial report this time.
1, Tencent Music online music paid users reached 76.2 million.
According to the financial report, in the fourth quarter, the number of paid users of Tencent Music's online music service reached 76.2 million in the fourth quarter, an increase of 36.1% compared with the same period last year. Sequentially, the number of paying users increased by 5 million in one quarter.
At the same time, while the user growth, Tencent Music's marketing expenses have declined, which indicates that its operational efficiency is improving. According to the financial report, Tencent Music's sales and marketing expenses in the fourth quarter were RMB750 million, down 3.0% year-on-year. Tencent Music explained that this decline is mainly due to the company's use of internal organic user traffic to attract more users, which effectively reduces user acquisition costs and thus improves operational efficiency.
2, Tencent Music online music user payment rate has increased.
It is worth noting that the payment rate of Tencent Music online music users has further increased, and in the fourth quarter of 2021, the payment rate has reached 12.4%, compared with 11.2% in the third quarter and 9.0% in the fourth quarter of last year.
Obviously, the payment rate is still growing quite fast. It has to be said that it is not easy for Tencent Music's online music payment rate to achieve such an increase. After all, in 2017, the online music payment rate was only 2%, in 18 years it has reached 4.2%, and now it has reached 12.4%. Although it looks like a single-digit growth, in a user environment like China, it is still quite difficult to cultivate users' music payment habits. It is after years of sustained investment and cultivation that Tencent Music has maintained sustained growth in the payment rate.
Of course, compared with Spotify's payment rate of about 44%, Tencent Music's payment rate is still far from the same, which also shows that Tencent Music still has a large room for growth in this regard.
3, Tencent Music's revenue declined in the fourth quarter, but the steady growth of revenue for the whole year met expectations.
According to the financial report, Tencent Music's total revenue in the fourth quarter was RMB7.61 billion, down 8.7% year-on-year. The decline was mainly due to a decline in revenue from social entertainment services and other businesses. Tencent Music explained that this is due to the intensification of competition from other pan-entertainment platforms and changes in the macro environment. However, it also said that Tencent Music will continue to innovate products and strengthen the continuous construction of more social entertainment verticals such as audio live broadcasting, business overseas and virtual interactive content to enhance its competitiveness.
At the same time, Tencent Music's online music revenue increased by 4.3% in the fourth quarter, and this slowdown in revenue growth was also affected by changes in the industry environment, according to the financial report, its revenue from re-licensing, digital album sales and advertising business declined.
In addition, the decline in social entertainment service revenue, the low gross profit of online music and the increase in R&D investment also caused Tencent Music's net profit in the fourth quarter to decline.
However, for the whole year of 2021, Tencent Music's revenue still maintains growth and profitability. In fiscal 2021, Tencent Music's total revenue in fiscal 2021 was RMB31.24 billion, an increase of 7.2% year-on-year, and net profit attributable to shareholders of the Company in fiscal 2021 was RMB3.03 billion.
4, "one body, two wings" strategy has achieved good results, and long audio has grown rapidly.
It is worth noting that the long audio has also become a highlight of Tencent Music's financial report. According to the financial report, in the fourth quarter of 2021, Tencent Music's long audio MAU exceeded 150 million, an increase of 65% year-on-year.
This is also an important achievement of Tencent Music's "one body and two wings". In June 2021, Tencent Music carried out the strategic upgrade of "one body and two wings" (that is, platform and content). At the content level, Tencent Music has established a content business line, which is responsible for the overall planning, strategy formulation and overall management of the content sector business, and concentrates resources to introduce, co-create and promote high-quality music content. At the platform level, a new long audio business line was established, integrated into the newly acquired lazy listening business, and a management team was set up to integrate and coordinate the cross-platform long audio business, and the integration of resources was deeply laid out in the long audio track; a new product department was established under the QQ music business line, and the QQ music live broadcast and the national K song live broadcast team were integrated.
In addition to long audio, the four pillars of musical entertainment: listening, watching, singing, and playing have also been improved. For example, in the fourth quarter, QQ Music, Kugou Music and Kuwo Music recently released version upgrades, and the video content on the QQ Music platform achieved a sustained year-on-year increase of more than 100% in the number of unique visitors (UV) and the number of video plays (VV).
5, Tencent Music's $1 billion share repurchase program continues.
In order to show confidence in the company's development, Tencent Music also stressed that it will continue to buy back this time.
In the earnings report, Peng Jiaxin, executive chairman of Tencent Music Entertainment Group, said: "Based on our confidence in the future development of the content and platform 'one body, two wings' strategy, the US$1 billion share repurchase plan announced last year has been implemented by more than 50%, and the remaining part of the plan will also be completed in 2022." ”
Well, the eighth sister feels that the recent sharp shock in Chinese stocks is estimated to have made many investors almost have heart disease, and at this juncture, the company that dares to buy back really has long-term confidence in the company.
6, Tencent Music will be listed on the Hong Kong Stock Exchange for the second time in the form of introduction
Tencent Music also announced the big news of the second listing this time. According to the financial report, in order to provide shareholders with greater liquidity and more protection in the changing regulatory environment, Tencent Music plans to re-list on the main board of the Stock Exchange of Hong Kong Limited in the form of an introduction with regulatory approval.
Well, it is true that by introducing the listing of Hong Kong stocks, it can not only provide more trading location options and more flexible trading hours for corporate investors, but also does not dilute the interests of existing shareholders, which is conducive to introducing more investors and is more conducive to the long-term development of the company.
All in all, in the case of a poor environment, Tencent Music's user base disk is still quite stable, and it seems that its "one body, two wings" strategy has begun to show results. At the same time, Tencent Music has also shown long-term confidence to the market through the repurchase of shares and the capital operation of the secondary listing in Hong Kong, as well as improving the company's liquidity and reducing risks, which is good news. Next, in 2022, whether Tencent Music will continue to maintain rapid growth and make breakthroughs in new business, we will walk and see.