Tencent Music Entertainment Group American Depositary Shares each representing two Class A Ordinary Shares (TME)

FairStock Score: 82/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach TME as a Graham-style bargain candidate. It operates QQ Music, Kugou, Kuwo and WeSing in China, with 5,690 employees, so it is a scaled online music, karaoke and live-streaming platform. In the latest reported quarter, 2026-Q2, revenue was $8.9B and net income was $2.5B, a 27.66% net margin. That is a real business. The moat cannot be quantified from these figures alone; the data does not give market share or pricing power, only the platform brands. Financial health is mixed: debt to equity is 0.21, ROE is 10.97%, and trailing free cash flow is $9.7B. On a $14.6B market cap, the FCF yield is 66.2%, and EV/EBITDA is 0.69. At the 2026-10-13 close of $8.50, FairStock lists a P/E of 10.00 and P/B of 1.14. Its Graham Number is $21.43, implying a 60.34% margin of safety. But I must respect the warnings: ROCE is 5.60%, Piotroski is 4/9, Altman Z-Score is 0.94, and the provided data lists revenue growth of 7.33% and profit growth of -51.27%. The 52-week range of $7.66 to $23.85 shows how violently sentiment has moved. A low price can be a gift or a trap; here the cash generation and balance sheet are attractive, but the weak profit trend and low Altman score mean I would demand more evidence before calling it a classic Buffett-quality compounder. The FairStock score is 82/100, but the Lynch category is none because only 0 years of filed results are available, needing 3.

In plain English: Tencent Music runs music streaming and karaoke apps in China, including QQ Music, Kugou, Kuwo and WeSing. The business earns a solid profit margin and generates a lot of cash, though recent profit growth has been weak. At the recent price, the shares look cheap compared with the company's earnings, cash flow and asset value.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer