On November 11, Tencent Music Entertainment Group (hereinafter referred to as Tencent Music) (NYSE: TME) released its unaudited financial report for the third quarter up to September 30, 2020.

In the third quarter of 2020, the total revenue of Tencent music was 7.58 billion yuan (US $1.12 billion), compared with 6.51 billion yuan in the same period of 2019, with a year-on-year increase of 16.4%; the net profit attributable to shareholders of the company increased to RMB 1.13 billion yuan (US $167 million) and RMB 1.03 billion yuan in the same period of 2019; the net profit attributable to shareholders of the company under non IFRSs was RMB 13.3 billion 500 million yuan (US $198 million), compared with RMB 1.25 billion yuan in the same period of 2019; the total revenue, net profit and adjusted net profit in a single quarter have reached a record high!

In terms of music streaming, Tencent achieved the largest monthly performance of 200 million users. It is worth mentioning that the number of paid users of Tencent music online music increased to 51.7 million in this quarter, not only setting a record high, but also breaking through the key node of 50 million, with a year-on-year increase of 46%, and a net increase of 4.6 million compared with the previous quarter. At the same time, the online music payment rate of Tencent music in this quarter has also reached a record high of 8%, which is very significant compared with 5.4% in Q3 in 2019 and 7.2% in the previous quarter.

We can also see from Q3 financial report that based on the social trend of mass user base and content payment, Tencent music has important measures in terms of product, content and business model, leading the new wave of music industry development.

On the product, Tencent Music continues to upgrade its products to enhance visual, interactive and social attributes: the plop community introduced in QQ Music 10.0 is popular with users, retention rate and user penetration rate increase, and become a new channel for digital albums, variety shows and movies; enrich video to meet users' needs for visual music experience, improve user time and video viewing times per user; continuously improve the interactive function and social attributes of national K songs, deepen user participation and further enhance user penetration.

Content, Tencent music independent musicians and upload platform music works continue to maintain three-digit year-on-year growth, but also with leading domestic and foreign music record companies to establish more strategic partnerships, Add content of various genres and formats and develop and promote original music to continue to expand leading content services.

On the innovation business, Tencent music made significant progress in long audio and TME live in the third quarter: long audio IP authorization growth, content index level addition, rapid growth in the number of users, penetration increased from 4.7% in the same period last year to 11.7%; TME live continued outstanding influence, attracting domestic and foreign head musicians such as Liu Dehua, Chen Yixun, Jessie J and Zhou Shen to join, and commercialize through paying to pull brand sponsorship, showing great scalability commercial potential.

Overall, in the third quarter of 2020, Tencent's music core data grew rapidly and steadily, and its performance was developing steadily. While the overall market is stable, the vigorous vitality of innovative business and the efficient transformation of paying users also prove that Tencent music has excellent vitality and strong stamina, and is facing a new blue ocean of growth.

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