TME：Empowering Aspiring Artists_ Unleashing IP Potential to Global Audience and Increase Commercial Value
We initiate with a "Buy" rating and a TP of HK$40.77. We adopt relative valuation based on PE ratio. We primarily referenced two peer groups, HK listed companies that provide internet content and information services, and US listed companies related to music streaming. Currently, we value Tencent Music (“TME”, or the “Company”) at 24.0x PE for 2024, and estimate a market capitalization of around HK$139.9 bn. Based on the latest number of issued shares, we calculate the corresponding target price to be HK$40.77/share.