CITIC Securities International: Downgrade Tencent Music's target price to HK$94, maintain "buy" rating.

The report published by CICC International indicates that Tencent Music's total revenue in the third quarter increased by 21% year-on-year, while adjusted net profit increased by 33% year-on-year, surpassing market expectations by 3% and 4% respectively. This is due to the quarterly net increase of 1.3 million paid members and a 2% quarterly growth in average monthly ARPPU to 19 yuan. Music membership revenue increased by 17% year-on-year, in line with market expectations. Non-membership music revenue, which increased by 51% year-on-year, continued to exceed market expectations significantly, mainly due to continued growth in advertising, strong offline concerts, and contributions from artist peripherals. The bank believes that even though Tencent Music will increase investment in the short term in 2026, the company will continue to generate positive commercial momentum through its solid core content, user assets, operational capabilities, competitive industry partners, and rich commercialization methods and capabilities. The bank maintains its "buy" rating with a target price for US stocks reduced from $27 to $24 and a target price for Hong Kong stocks lowered from HK$106 to HK$94.