Tencent Music Entertainment Stock Is Falling After Q1 Earnings: Here's Why

Tencent Music Entertainment Group TME reported first-quarter revenue growth of 5.4% year-over-year to $1.02 billion, beating the consensus of $985.62 million.
Online music service revenues grew by 33.8% Y/Y to $510 million. Revenues from music subscriptions were $378 million, an increase of 30.4% Y/Y.
Online music paying users increased by 17.7% Y/Y to 94.4 million.
Revenues from social entertainment services and others decreased by 13% Y/Y to $510 million.
The gross margin increased by 510 bps to 33.1% due to effective control of content costs.
The operating profit increased by 84.4% Y/Y to $201 million, driven by effective cost controls.
Adjusted EPADS of $0.13 beat the consensus of $0.11.
Net cash provided by operating activities was $270 million.
The combined balance of the company's cash, cash equivalents, term deposits, and short-term investments amounted to $4.15 billion.
TME shares are down with other Chinese stocks Tuesday, following China's disappointing retail and factory output data. Activity indicators for April missed expectations, adding pressure to policymakers over the pandemic recovery, even as interest rates rise elsewhere.
Price Action: TME shares are trading lower by 3.64% at $7.67 premarket on the last check Tuesday.

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