TENCENT MUSIC - INVEST IN THE SPOTIFY OF CHINA
3 months ago I posted a blog article pointing out 5 stocks that I believed could double your investment in 2021 and since that day, all 5 stocks are up, 1 has tripled and 1 is so so close to doubling and that stock is Tencent Music! Click HERE to check out the rest of that list!
For now then, here's why the stock of Tencent Music has doubled in just a few months and how high I think it can go this year!
So let's start with the fact that Tencent Music Entertainment (TME) is the music streaming leader in China! The business is more than just 1 app, in fact TME owns many of China's most popular music streaming apps including QQ Music, Kogou & Kuwu Music & the popular karaoke app Wesing which represents over 80% of the market in China! With user penetration around 12%, the Chinese Music streaming market has a lot more room to grow and analysts expect to see around 11% annual growth for a long time to come!
Tencent Music is not only the leading music streaming company in China, TME also owns a 7% stake in European giant Spotify! Despite Spotify being worth almost 50% more than their Chinese Partner, Tencent Music is far more profitable and is growing revenue just as fast! Tencent Music should be able to use their strong financial position to grow quickly into other areas of Asia before Spotify and others get a foothold in the region.
In fact, we're seeing this already with Tencent's music app JOOX now commanding over 50% of the market share in Thailand and Malaysia! Also, the companhy just announced that they will be acquiring Chinese podcast & radio giant Lazy Audio for $416m in cash. TME's strong financial position allows the company to acquire other businesses without the need for massive hare dilution which is fantastic for their investors! Lastly, there was some positive news over the past couple of weeks from top industry analysts and large institutions for example Oppenheimer and Citibank analysts raised their price targets on Tencent Music by over 50%! Not only that, but Moody's - one of the world's largest credit rating companies completed a periodic review of Tencent Music and gave the business a very strong rating of A2 recommending TME as a company that possesses "superior intrinsic financial strength".
For reference Moody's rates other Chinese tech giants like Alibaba & Baidu as an A1 & A3 respectively putting Tencent Music slightly below Alibaba but above Baidu in terms of a safe long-term investment!
So there you have it, 3 big reasons why Tencent Music has performed so well over the past 3 months! As I mentioned above, I included Tencent Music in a blog article where I pointed out 5 stocks that I believed could double in 2021!
The stock has already doubled since then but I do believe it can go a lot higher over the next couple of years! I'm going to start posting all of my upcoming blog posts as videos on my Youtube channel so make sure to subscribe and you'll get a notification as soon as I spot another 5 stocks that can double in 2021!
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Disclaimer: All trading involves risk. Only invest money that you can afford to lose and remember that past performance doesn’t guarantee future results. Everything posted by me is for educational purposes only. I am not a financial advisor and no information on this website or any accounts linked with myself should be considered as financial advice. Remember, all trades are at your own risk.
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