1Q26 Inline Transition Towards Diversified Music Ecosystem

TME delivered inline 1Q26 results but faces pressure on its subscription growth due to competition from Soda Music. Goldman Sachs maintains a Buy rating, citing the company's transition to a diversified ecosystem and strong shareholder returns.

Key Takeaways

• 1.TME reported 1Q26 results that were in line with expectations, though market concerns exist regarding subscription business slowdown due to competition and AI disruption.
• 2.Non-subscription business is showing solid momentum, growing 28% year-over-year in 1Q26, driven by offline performance and advertising.
• 3.The conditional approval for the acquisition of Ximalaya is expected to provide cost efficiencies and business synergies across TME's membership ecosystem.

Table of Contents

• Positives (+)
• Negatives (-)
• What's changed
• Key highlights
• Financials and valuation
• Disclosure Appendix

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