Citi: Tencent Music's integration with Ximalaya poses pressure for short-term growth, target price lowered to $11.40.

Citigroup released a research report indicating that Tencent Music's performance in the second quarter slightly exceeded expectations; however, its core music-related membership service revenue continues to be under pressure, and the growth of advertising revenue has slowed. The outlook for the third quarter and the full year is considered weak. The report states that the integration of Himalaya will have a positive impact on gross margin, but the increase in short-term operating expenses prior to the full realization of cost optimization and integration synergies will lead to operational deleveraging, causing a slowdown in profit growth. It is believed that the integration process will exert pressure on the groups short-term growth. The firm lowered Tencent Music's target price on the U.S. stock market from $13 to $11.4 and maintained a "Buy" rating.