Tencent Music slightly rose in pre-market trading after plummeting more than 15% yesterday following the release of its financial results

Tencent Music, which fell sharply by 15.31% yesterday, saw a slight increase in pre-market trading today, up 1.08% to $11.24. Tencent Music released its latest financial report yesterday, with a total revenue of 71.6 billion yuan in the second quarter, a year-on-year decrease of 1.7%; net profit was 16.8 billion yuan, a 29.6% increase year-on-year. The company's Q2 revenue and operating profit basically met or exceeded expectations, but social entertainment paid users were lower than expected. After the results, several major banks lowered their earnings forecasts and target prices for Tencent Music. Among them, Nomura Securities issued a report stating that Tencent Music's second-quarter performance roughly met market expectations. The latest guidance for 2025 music subscription targets an annual growth of 18%, which, along with the guidance for the second half of this year, is lower than the bank's expectations. The company has also delayed the time to achieve its medium- to long-term goals. Considering the lower-than-expected growth in subscription revenue, the company's revenue forecasts for 2024 to 2026 have been lowered by 5% to 9%, and earnings forecasts have been reduced by 6% to 12%. Morgan Stanley also lowered Tencent Music's earnings forecasts for 2024 to 2026, reducing the target price from $19 to $15, while maintaining its "hold" rating