uploads/2019/01/finger-1264881_1280.jpg

Why Tencent Music Has Risen over 8% Today

By

Updated

Tencent Music

Chinese streaming service provider Tencent Music Entertainment (TME) had a mixed stock performance in December, and as of January 14, it had fallen 7.7% year-to-date. However, the stock has been bullish for the last ten days. Let’s look at what could be driving this optimism.

Key updates

At 10:28 AM Eastern Time, Tencent Music reached $16.21, up ~8.4% from its previous session’s closing price. Although there has been no significant news from Tencent Music, HSBC and JPMorgan Chase analysts have recommended “buy” for the stock, which may have boosted optimism.

On January 2, Tencent Music’s home market competitor, NetEase Cloud Music, owned by NetEase (NTES), announced a partnership with South Korean company CUBE Entertainment. According to a press release, “NetEase Cloud Music has been granted access to CUBE Entertainment’s complete music catalog, including sought-after albums and tracks from popular performers such as BTOB, CLC, PENTAGON, Yoo Seon-Ho and (G)I-DLE.” After the partnership news, TME stock fell 4.3% on January 3, possibly due to investors’ concerns about its rising competition.

Of the nine analysts covering Tencent Music, ~67% recommend “buy,” and their price target for the stock is $16.24. TME had risen 13.1% this month as of yesterday, before today’s gains.

In the fourth quarter, Tencent Holdings (TCEHY) fell 3.4%, while fellow Chinese companies Alibaba (BABA), NIO (NIO), Baidu (BIDU), and IQIYI (IQ) lost 16.8%, 8.7%, 30.6%, and 45.1%, respectively. US tech companies Apple (AAPL), Amazon (AMZN), and Netflix (NFLX) fell 30.1%, 25.0%, and 28.5%, respectively.

More From Market Realist