This year's quarterly report,The performance of each listed company has attracted the attention of the market,Among them, Tencent Music is undoubtedly the leader in the market,Recently, Tencent Music earned 18 billion yuan in Q1 this year,More attention than profit news is actually the first dividend,How to analyze Tencent Music's financial report? What does the first dividend payout mean?
1. Tencent Music earned 1.8 billion in Q1 this year
According to a report by the Financial Associated Press, Tencent Music released its financial report for the first quarter of 2024. According to the data, Tencent Music's Q1 revenue was 6.77 billion yuan, a year-on-year decrease of 3.4%. Adjusted net profit increased by 23.9% year-on-year to RMB1.81 billion.
It is worth noting that in this financial report, Tencent Music also announced that it will pay annual dividends, totaling more than 1.5 billion yuan, which is the first dividend payment since Tencent Music went public.
According to the financial report, for the 2023 fiscal year, the board of directors of Tencent Music Entertainment Group approved a dividend of US$0.0685 per ordinary share, or US$0.1370 per ADS, and the total cash dividend expected to be paid is about US$210 million, or about 1.516 billion yuan. This dividend is about 30% of net profit in 2023, with a dividend yield of 1%.
Since the first quarter of this year, Tencent Music has carried out themed activities during festivals such as the Spring Festival, and at the same time established a partnership with Xiaomi SU7, Tencent Music has launched multi-channel targeted promotions to attract paying users. This brought good paid subscriber growth and subscription revenue to Tencent Music in the first quarter.
According to the financial report data, in Q1 2024, the number of paid users of Tencent Music increased by 20.2% year-on-year to 113.5 million, and the number of paid users increased by 6.8 million quarter-on-quarter, which is the largest quarterly net increase so far. Music subscription revenue was 3.62 billion yuan, a year-on-year increase of 39.2%.
This also drove the revenue of online music services (music subscription + advertising services), one of Tencent Music's main businesses, to increase by 43% year-on-year to 5.01 billion yuan.
2. What should Tencent Music's financial report look like?
Tencent Music achieved a net profit of 1.8 billion yuan in the first quarter of this year and announced its first cash dividend, a series of financial actions and strategic measures that have attracted widespread attention from the market.
First of all, Tencent Music's financial performance in the first quarter is undoubtedly a shot in the arm for the market. Against the backdrop of the continued and rapid growth of the digital entertainment industry, Tencent Music achieved a net profit of RMB1.8 billion with its deep efforts in music content creation, distribution and user services, which not only exceeded market expectations, but also demonstrated its solid profitability in a complex economic environment. The increase in revenue was mainly due to the strong momentum of the social entertainment business and the effective management of cost control, which showed the improvement of the company's operational efficiency and continuous optimization of the cost structure.
Secondly, the decision to pay the first dividend marks an important step in the capital operation of Tencent Music, which is not only a direct reflection of the company's financial health, but also a significant improvement in the management's emphasis on shareholder returns. In the capital market, a consistent and prudent dividend policy is often seen as a signal of financial soundness and confidence in future growth. For investors, dividends can not only directly increase investment returns, but more importantly, it conveys the company's positive attitude of being willing to share the results of its operations with shareholders, and enhances the market's confidence in the value of its long-term investment. In addition, the launch of the dividend strategy may also attract a group of long-term investors who prefer fixed income, which will contribute to the stability and liquidity of the company's shares.
Third, Tencent Music's outstanding performance is inseparable from its in-depth layout and continuous exploration in the field of AI. In recent years, Tencent Music has relied on technical research teams such as Tianqin Lab to continuously promote the innovation and application of AI-generated music. For example, the introduction of music models has significantly improved the efficiency of music creation and production, reduced the high cost of traditional models, and allowed musicians to focus more on creative ideas rather than technical details. The application of AI technology in the music industry chain, from intelligent assisted creation to personalized recommendations, to copyright protection and data analysis, has reshaped the music industry ecology in an all-round way, showing its strong potential as an engine of the future. This technology-driven innovation model not only strengthens Tencent Music's core competitiveness, but also provides a model for the digital transformation of the entire music industry.
Fourth, in the long run, Tencent Music's advantages in the field of AI are gradually being transformed into its differentiated competitive advantages in the market. With the increasingly fierce competition in the music market, how to stand out from the massive content has become a problem that every platform must face. By building a full-link service system of "creation + publicity + service", combined with its powerful AI technology, Tencent Music not only meets the personalized and high-quality music needs of users, but also provides music creators with unprecedented convenient tools and a broad stage. This differentiation strategy enables Tencent Music to attract more new users while maintaining its existing user base, and effectively improve user stickiness, laying a solid foundation for the company's continued growth.