Tencent Music misses quarterly revenue estimates as social entertainment unit drags

Tencent Music Entertainment (1698.HK), missed estimates for quarterly revenue on Tuesday, as Beijing’s crackdown on online gambling continues to impact its social entertainment segment.
U.S.-listed shares of the company fell 5.6% in premarket trading.

The China-based company had removed certain live-streaming features in August last year to comply with anti-gambling regulations.

Revenue from the company’s social entertainment services business, which includes karaoke app WeSing and live concert platform Kuwo Music, fell 23.9% in the third quarter.

But the impact was largely countered by a 20.4% rise in revenue at its online music unit, after paying users increased 15.5% to 119 million.

Tencent Music’s premium Super VIP (SVIP) membership, which combines long-form audio content, online karaoke services and high-quality sound, has gained significant traction among users.

The company’s revenue rose 6.8% over the year earlier to 7.02 billion yuan ($970.23 million) in the third quarter, but narrowly missed analysts’ average estimate of 7.04 billion yuan, according to data compiled by LSEG. Reuters