Tencent Music falls more than 1% in pre-market trading, with target price lowered by multiple institutions

Tencent Music fell 1.32% in pre-market trading to $10.5. Haitong International recently issued a research report stating that Tencent Music's performance in the second quarter of this year basically met expectations. However, the macro environment is full of challenges, and Tencent Music's subscription business may face some short-term pressure. The firm lowered its target price for Tencent Music's US stocks from $15.5 to $13.6, maintaining an "outperform" rating. UBS also lowered its target price from $17.5 to $14, reflecting weakening revenue growth in the second half of the year and beyond, leading to a forecasted P/E ratio drop from 21 times to 17 times. However, they maintained a "buy" rating, believing that the short-term headwinds have largely been reflected, resilient profitability due to low sensitivity to macroeconomic downturns, continued gross margin and net profit margin expansion, as well as its market leadership position and long-term growth in the online music industry remain intact