TME
9/9 ScoreTencent Music Entertainment Group
Analysis Date: February 17, 2026
Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover and listen to music in personalized ways; and WeSing, which enables users to have fun by singing and interacting with friends, sharing their singing performances with friends, and discovering songs that others have sung. The company also operates Kugou Music, Kuwo Music, WeSing, QQ Music, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with those interested in their performance; and Kuwo Changting, an audio platform that offers users various audio content, including audio books, cross-talks, radio dramas, and other entertainment. In addition, it sells music-related merchandise, including Kugou headsets, smart speakers, WeSing karaoke microphones, and Hi-Fi systems; and offers online music event ticketing services, as well as services to smart device and automobile makers to build and operate music services on devices and vehicles. Tencent Music Entertainment Group has a strategic partnership with China Literature. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.
Buffettology Criteria
All 9 of 9 criteria passed
High ROE
Return on Equity > 12%
Value: 14.1%
High ROIC
Return on Invested Capital > 9%
Value: 12.2%
Cash Machine
FCF / Assets > 5%
Value: 10.2%
Fair Valuation
Earnings Yield > 3.5%
Value: 6.3%
Share Buybacks
Share Count is Dropping
Value: -1.2%
Defensible Moat
Gross Profit Margin > 40%
Value: 43.9%
Simple Business
Not in a speculative sector (e.g., Biotech)
Value: Communication Services
Conservative Debt
Debt to Equity < 1.5
Value: 0.05x
Consistent Growth
5-Year Growth is Positive
Value: 74.4%
Analysis Summary
This looks like a company that understands how to put capital to work effectively, evidenced by its strong ROE and ROIC. The near-zero debt speaks to financial discipline, and a robust moat suggests they have a durable advantage in their industry. While the growth rate is impressive, consistent long-term compounding is the true test of a great business.
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