Equity Research Analyst - Long-Short

Raj S, CA, CFA

Equity Bottom-Up

<ul>
<li>TME’s 35% correction since 4Q25 reflects Soda competition fears, proving benign, and 2026E investment-led margin pressure, not fundamentals; core monetisation and platform moats remain intact.</li>
<li>Ximalaya acquisition, expected to complete in 1H26, expands TME into long-form audio and should add ~10–20% to 2027–28E EPS through platform synergies; live concerts add upside.</li>
<li>At ~14–15x 2027E P/E, TME prices no margin recovery, no Ximalaya upside, and no live-concert optionality, implying asymmetric returns; we see ~70–100% medium-term upside as earnings compound.</li>
</ul>


TME’s 35% correction since 4Q25 reflects Soda competition fears, proving benign, and 2026E investment-led margin pressure, not fundamentals; core monetisation and platform moats remain intact.
Ximalaya acquisition, expected to complete in 1H26, expands TME into long-form audio and should add ~10–20% to 2027–28E EPS through platform synergies; live concerts add upside.
At ~14–15x 2027E P/E, TME prices no margin recovery, no Ximalaya upside, and no live-concert optionality, implying asymmetric returns; we see ~70–100% medium-term upside as earnings compound.


Tencent Music (TME US): Long-Term Moats and Underappreciated Catalysts at Great Valuation

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Tencent Music Entertainment Group reported strong third-quarter results in 2025, driven by significant growth in its online music business.</li><li>Total revenues grew by 21% year-over-year to RMB 8.5 billion, with online music revenues increasing by over 27% to RMB 7 billion.</li><li>The growth in music subscription revenues was notable, with a 70% year-on-year increase to RMB 4.5 billion, propelled by a steady rise in paying users and enhancements in ARPPU, which reached RMB 11.9 compared to RMB 10.8 from the previous year.</li></ul>

Tencent Music Entertainment Group reported strong third-quarter results in 2025, driven by significant growth in its online music business.Total revenues grew by 21% year-over-year to RMB 8.5 billion, with online music revenues increasing by over 27% to RMB 7 billion.The growth in music subscription revenues was notable, with a 70% year-on-year increase to RMB 4.5 billion, propelled by a steady rise in paying users and enhancements in ARPPU, which reached RMB 11.9 compared to RMB 10.8 from the previous year.

Tencent Music Entertainment Group: How Live Events & Fan Economies Are Reshaping Growth!

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Total revenue grew by 21% YoY and offline revenue grew by 50% YoY in 3Q25.</li>
<li>Both ARPPU and the user base increased YoY in 3Q25.</li>
<li>The margin had improved year over year for 13 quarters.</li>
</ul>


Total revenue grew by 21% YoY and offline revenue grew by 50% YoY in 3Q25.
Both ARPPU and the user base increased YoY in 3Q25.
The margin had improved year over year for 13 quarters.


Tencent Music (TME): 3Q25, Offline Rev Up by 50%, Margin Improved for 13 Quarters

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Foxconn Industrial Internet / Technical Analysis

<ul>
<li>We remain near-term bullish SPX and ACWI since 4/22/25, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>We discussed in our July 31, 2025 Int'l Compass how $128, $125-$126, and $123-$123.50 were short-term supports to watch on ACWI-US, and ACWI-US found support at $128 the next day.</li>
<li>Europe (EURO STOXX 50) is the last of the major countries (from a global market cap perspective) to break out; we expect it to be next</li>
</ul>


We remain near-term bullish SPX and ACWI since 4/22/25, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We discussed in our July 31, 2025 Int'l Compass how $128, $125-$126, and $123-$123.50 were short-term supports to watch on ACWI-US, and ACWI-US found support at $128 the next day.
Europe (EURO STOXX 50) is the last of the major countries (from a global market cap perspective) to break out; we expect it to be next


Europe Next to Break Out?; Bullish Outlook Intact; Remain Overweight Korea, Greece, and the U.S.

<ul>
<li>We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 (up from 5700-5785) and $119-$121.</li>
<li>$128, $125-$126, and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.</li>
</ul>


We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 (up from 5700-5785) and $119-$121.
$128, $125-$126, and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.


Continue Adding Exposure to China; Short-Term Supports to for This ACWI-US Pullback

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)