External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>TME announced 1Q26 results on 12 May: total revenue was up by 7% YoY to RMB7.90bn and non-IFRS net income grew by 7% YoY to RMB2.27bn, both in line with Bloomberg consensus estimates.</li><li>For 2Q26E, we expect total revenue to increase by 3% YoY, with growth further decelerating.</li><li>Management noted that the competition headwind persists, especially given the emerging copyright issues due to AI. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME announced 1Q26 results on 12 May: total revenue was up by 7% YoY to RMB7.90bn and non-IFRS net income grew by 7% YoY to RMB2.27bn, both in line with Bloomberg consensus estimates.For 2Q26E, we expect total revenue to increase by 3% YoY, with growth further decelerating.Management noted that the competition headwind persists, especially given the emerging copyright issues due to AI. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) - Inline 1Q26 Results; Competition Headwind Persists

<ul><li>TME reported 4Q25 results: total revenue grew by 16% YoY to RMB8.64bn, 3% ahead of Bloomberg consensus estimate mainly due to the stronger-thanexpected performance of non-subscription music businesses (+41% YoY); nonIFRS net income increased by 9% YoY to RMB2.49bn, in line with consensus estimate.</li><li>FY25 total revenue/non-IFRS net income was up by 16%/25% YoY to RMB32.90bn/9.59bn. Looking into FY26E, we forecast total revenue to grow by 10% YoY, with music subscription/non-subscription revenue up by 6%/25% YoY respectively.</li><li>Management expects music subscription revenue to face shortterm pressure due to the intensive competition, and the company will step up content and marketing investment to strengthen its competitive moat. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME reported 4Q25 results: total revenue grew by 16% YoY to RMB8.64bn, 3% ahead of Bloomberg consensus estimate mainly due to the stronger-thanexpected performance of non-subscription music businesses (+41% YoY); nonIFRS net income increased by 9% YoY to RMB2.49bn, in line with consensus estimate.FY25 total revenue/non-IFRS net income was up by 16%/25% YoY to RMB32.90bn/9.59bn. Looking into FY26E, we forecast total revenue to grow by 10% YoY, with music subscription/non-subscription revenue up by 6%/25% YoY respectively.Management expects music subscription revenue to face shortterm pressure due to the intensive competition, and the company will step up content and marketing investment to strengthen its competitive moat. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) - 4Q25 Review: Stepping up Investment to Drive Long-Term Sustainable Growth

<ul><li>TME announced 3Q25 results: total revenue increased by 21% YoY to RMB8.46bn, and non-IFRS net income was up by 33% YoY to RMB2.41bn, 3% and 4% ahead of Bloomberg consensus respectively, mainly thanks to the better-than-expected revenue growth of non-subscription music businesses (+51% YoY) like ads and offline performances.</li><li>We expect total revenue growth will decelerate to +12% YoY in 4Q25E, largely in line with consensus, mainly due to the normalisation of revenue from offline performances.</li><li>For FY26E, the company will further step up investment in content and new monetization opportunities such as offline performance and artist-related merchandise, which may drive sustainable revenue growth but impact short-term margins, in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME announced 3Q25 results: total revenue increased by 21% YoY to RMB8.46bn, and non-IFRS net income was up by 33% YoY to RMB2.41bn, 3% and 4% ahead of Bloomberg consensus respectively, mainly thanks to the better-than-expected revenue growth of non-subscription music businesses (+51% YoY) like ads and offline performances.We expect total revenue growth will decelerate to +12% YoY in 4Q25E, largely in line with consensus, mainly due to the normalisation of revenue from offline performances.For FY26E, the company will further step up investment in content and new monetization opportunities such as offline performance and artist-related merchandise, which may drive sustainable revenue growth but impact short-term margins, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) - 3Q25 Review: Investing to Expand Music Product Offerings

Thematic (Sector/Industry)

<ul><li>Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due to intensifying competition among marketplace platforms.</li><li>Expanding quality supply, reducing merchant costs, and increasing core user transaction frequency are the priorities.</li><li>Looking ahead, we believe subsectors and companies having strong business model moats and less vulnerable to subsidy-driven competition may outperform, while firms with established ecosystems/network effects, higher margins, and substantial absolute profits will likely have stronger competitive positioning. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due to intensifying competition among marketplace platforms.Expanding quality supply, reducing merchant costs, and increasing core user transaction frequency are the priorities.Looking ahead, we believe subsectors and companies having strong business model moats and less vulnerable to subsidy-driven competition may outperform, while firms with established ecosystems/network effects, higher margins, and substantial absolute profits will likely have stronger competitive positioning. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Internet - Business Model/Competitive Barrier Back in Focus

<ul><li>We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and profit growth visibility; 2) sustained profitability and willingness to lift shareholder returns; and 3) a sizeable TAM for new initiatives and business explorations likely to generate a decent ROIC.</li><li>We believe the market will continue to allocate to such names and value them fairly.</li><li>Taking into account 2Q results and recent stock performances, we find our previous view has been testified: better-than-expected earnings are not enough to drive a share rally, but better-than-expected 3Q/full-year outlook and enhanced shareholder return measures could provide key support. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and profit growth visibility; 2) sustained profitability and willingness to lift shareholder returns; and 3) a sizeable TAM for new initiatives and business explorations likely to generate a decent ROIC.We believe the market will continue to allocate to such names and value them fairly.Taking into account 2Q results and recent stock performances, we find our previous view has been testified: better-than-expected earnings are not enough to drive a share rally, but better-than-expected 3Q/full-year outlook and enhanced shareholder return measures could provide key support. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Internet - 2Q24 Recap & Stock-Picking Ideas: Seeking Certainty

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)

TME (TME US) - Inline 1Q26 Results; Competition Headwind Persists

TME announced 1Q26 results on 12 May: total revenue was up by 7% YoY to RMB7.90bn and non-IFRS net income grew by 7% YoY to RMB2.27bn, both in line...

CMB International

TME (TME US) - 4Q25 Review: Stepping up Investment to Drive Long-Term Sustainable Growth

TME reported 4Q25 results: total revenue grew by 16% YoY to RMB8.64bn, 3% ahead of Bloomberg consensus estimate mainly due to the stronger-than...

CMB International

TME (TME US) - 3Q25 Review: Investing to Expand Music Product Offerings

TME announced 3Q25 results: total revenue increased by 21% YoY to RMB8.46bn, and non-IFRS net income was up by 33% YoY to RMB2.41bn, 3% and 4%...

CMB International

Internet - Business Model/Competitive Barrier Back in Focus

Most internet companies’ 1Q25 earnings met or exceeded market expectations, while concerns are mainly around over reduced earnings visibility due...

CMB International

Internet - 2Q24 Recap & Stock-Picking Ideas: Seeking Certainty

We update our sector investment views for the next six months post earnings as follows: 1) Companies with solid fundamentals and high revenue and...

CMB International

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