TME’s revenue rose 50% YoY in the fourth quarter
Chinese music streaming company Tencent Music Entertainment (TME), which spun off from Tencent (TCEHY) and had its own IPO in December 2018, reported its first quarterly earnings results since going public on March 19.
The streaming giant reported revenue of 5.4 billion Chinese yuan ($785 million) in the fourth quarter, a 50.5% rise from the same quarter in 2017. In 2018, the company generated 18.99 billion yuan ($2.76 billion) in revenue, a 72.9% rise over 2017.
The company posted a net loss of 876 million yuan ($127 million) in the fourth quarter due to a one-off share-based charge of 1.52 billion yuan ($221 million) related to equity issuances to Warner Music and Sony Music.
In 2018, the company posted a net profit of 1.87 billion yuan ($267 million) after accounting for the one-off charge.
TME’s unique business model has helped it stand out
TME’s unique business model has helped it become the biggest streaming company in China. It runs a number of apps that offer services such as music streaming and karaoke.
TME offers its users virtual gifts for purchase that allow them to reward influencers on its karaoke apps, such as WeSing and live streaming apps. In fact, TME derived a whopping 71.7% of its revenue from such services in 2018. The rest of its revenue came from more traditional forms of monetization, such as subscriptions and ads.
TME’s listing on the NYSE fell 9.1% in the first few hours of trading on March 20, but the stock is still up 21% since going public in December.