Tencent Music Entertainment Group (1698) Fair Value & Analysis

Communication Services · HK · Market cap HK$112B

TM Tencent Music Entertainment Group 1698 · HK

PriceHK$32.94

Fair ValueHK$66.60

Upside+102.2%

Quality75/100

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Weak Growth

Highly profitable · 26.5% net margin

Low debt · generates free cash flow

5.11% dividend yield

Ranks above peers (13/15)

Wide moat 74/100

Evidence: High Range HK$46.27 – HK$89.16 Share as image

Fair value as of: Aug 13, 2026

From 26 valuation models · updated yesterday

Share price −5.9% over the past month.

A strong business, screening 102% undervalued on our models.

What matters now

The rarer combination: high quality (75/100) AND below fair value. That earns a closer look rather than a quick verdict.
The price is below even our cautious bear case (HK$46.27). The market is more pessimistic than our downside scenario.
A fairly wide model range (HK$46.27 to HK$89.16) leaves room in how you read the outcome.

Price vs Fair Value (4 years)

White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 13, 2026.

How to read this chart

47‑month range HK$12.82 – HK$100.30 · fair‑value band HK$46.27 – HK$89.16 · the HK$32.94 price screens below the HK$66.60 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). Dashed = 300-day average. As of Aug 13, 2026.

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Analysis

Tencent Music Entertainment Group (1698) currently trades at HK$32.94, while our model-based Fair Value estimate is HK$66.60, implying the stock looks roughly 102.2% undervalued today. The Quality Score stands at 75/100 (high quality), in the Communication Services sector. Bull case: trading below our estimate, it may offer upside if the fundamentals hold. Bear case: a low price can be a value trap when quality is weak or the data is thin (evidence: high), always confirm before acting.

Over the trailing twelve months, Tencent Music Entertainment Group generated revenue of HK$33.4B at a net margin of 26.5%. Revenue grew 7.3% year over year. It earns a return on equity of 12.0%. The balance sheet holds a net cash position of HK$4.7B. Fundamentals as of Aug 13, 2026

Our scenario range runs from HK$46.27 (bear case) to HK$89.16 (bull case); at HK$32.94, the current price sits below that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The share trades about 68% below its 52-week high and 6% above its 52-week low, currently below its 200-day average. For context, the median of 10 Communication Services peers we cover trades at -36% fair-value upside, at 102%, 1698 screens cheaper than that median.

Fair Value models

Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.

Model Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. Evidence

Highest evidence

Growth DCF HK$40.73 HK$67.14 HK$110.32 80

Residual Income HK$24.80 HK$31.33 HK$80.53 76

Rev-Margin DCF HK$28.65 HK$44.72 HK$64.73 74

All 26 models by family

DCF Models

FCF DCF HK$40.66 HK$68.42 HK$114.44 38

Owner Earnings HK$48.31 HK$81.51 HK$136.56 31

5Y Revenue Exit HK$28.65 HK$44.70 HK$65.57 39

5Y EBITDA Exit HK$40.08 HK$67.44 HK$100.75 41

5Y P/E Exit HK$49.33 HK$85.83 HK$126.40 38

10Y Revenue Exit HK$31.75 HK$48.02 HK$71.08 36

10Y EBITDA Exit HK$39.93 HK$64.35 HK$99.53 37

10Y P/E Exit HK$45.97 HK$77.56 HK$120.28 35

Earnings-Based

Graham-Dodd HK$23.56 HK$95.79 HK$130.38 54

Lynch FV HK$23.98 HK$34.26 HK$44.54 50

PEG = 1.0 HK$23.98 HK$34.26 HK$44.54 46

EPV HK$36.18 HK$41.94 HK$46.99 59

Dividend Discount

Gordon GGM HK$5.70 HK$11.85 HK$18.80 70

DDM Multi-Stage HK$5.70 HK$9.99 HK$12.44 61

Multiples

P/E Multiple HK$57.16 HK$76.21 HK$95.27 63

P/S Multiple HK$27.06 HK$36.08 HK$45.10 58

P/B Multiple HK$44.17 HK$58.89 HK$73.62 55

EV/EBIT HK$52.40 HK$69.34 HK$86.27 53

EV/EBITDA HK$43.58 HK$57.57 HK$71.57 54

EV/Revenue HK$23.26 HK$32.53 HK$41.81 43

Asset-Based

NCAV (Graham) HK$12.92 HK$17.31 HK$25.84 50

Growth DCF

Growth DCF HK$40.73 HK$67.14 HK$110.32 80

Rev-Margin DCF HK$28.65 HK$44.72 HK$64.73 74

Economic Profit

Residual Income HK$24.80 HK$31.33 HK$80.53 76

ROIC Compounder HK$39.53 HK$52.31 HK$69.32 72

Growth Earnings

Growth-Adj P/E HK$42.83 HK$61.18 HK$79.54 68

Widest divergence: DCF Models (HK$67.44) versus Dividend Discount (HK$9.99). Highest evidence: Growth DCF (80).

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Key figures & financial health

Revenue (TTM) HK$33.4B

Revenue growth (YoY) +7.3%

Net margin 26.5%

Return on equity 12.0%

Free cash flow HK$9.9B FY2025

P/E ratio 10.4 as of Jul 2, 2026

More key figures

Operating margin 30.4%

EPS (TTM) HK$3.50

Dividend yield 5.1%

EPS growth (YoY) -51.8%

Net cash HK$4.7B FY2025

Figures from reported company fundamentals · as of Aug 13, 2026. TTM = trailing twelve months.

Quality Score breakdown

Overall quality 75/100

Of which business quality 73 · Market factors (momentum, volatility) 21

Profitability 53

Margins and returns on capital today

Quality Growth 78

Are margins and returns improving?

Cashflow 82

Earnings quality: real cash, not paper profit

Fin. Strength 85

Balance sheet, leverage, solvency risk

Investment 44

Disciplined investing over empire-building

Low Volatility 50

Calm price path (market factor)

Momentum 14

Price trend over the last 3–12 months (market factor)

52W Momentum 1

Distance to the 52-week high (market factor)

Net Issuance 92

Buybacks instead of dilution

Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.

About the company

Tencent Music Entertainment Group operates online music entertainment platforms that provides music streaming, online karaoke, and live streaming services in the People's Republic of China.

Full company description

Tencent Music Entertainment Group operates online music entertainment platforms that provides music streaming, online karaoke, and live streaming services in the People's Republic of China. It provides QQ Music, Kugou Music, and Kuwo Music that enable users to discover, enjoy, and share music in personalized ways; long-form audio content, including audiobooks, podcasts and talk shows, as well as music-oriented video content comprising music videos, live performances, and short videos; and WeSing, which enables users to sing along from its library of karaoke songs and share their performances in audio or video formats with friends. The company also delivers music-centric live streaming services primarily through the Live Streaming tab on QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with audience base; and Lazy Audio, an audio platform. In addition, it sells artist-related merchandise, such as branded apparel, posters and art prints, and accessories; other music services, such as content licensing, sales of digital albums, sales of customized artist-related merchandises, live performances and concerts, and artist management services; and music subscriptions, as well as offers advertising services across its social entertainment platforms. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group operates as a subsidiary of Tencent Holdings Limited.

Company description, as reported by the company or data provider.

Revenue & earnings trend

FY2021 – FY2025 · reported fiscal years

Tencent Music Entertainment Group reported revenue of HK$32.1B in FY2025 versus HK$31.2B in FY2021, a compound +0.6%/yr. Reported net income was HK$10.8B in FY2025, compounding +37.3%/yr from FY2021.

Growth Quality 40/100

Revenue growth is weak, negative or inconsistent.

Latest Revenue (FY 2025)

HK$32.1B

Latest YoY

+12.8%

Avg. growth/yr (3Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+4.2%

Avg. growth/yr (5Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+1.9%

Avg. growth/yr (9Y) ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump.

+24.8%

Revenue +0.6%/yr

FY21 HK$31.2B

FY22 HK$28.3B

FY23 HK$27.8B

FY24 HK$28.4B

FY25 HK$32.1B

Net income +37.3%/yr

FY21 HK$3.0B

FY22 HK$3.7B

FY23 HK$4.9B

FY24 HK$6.6B

FY25 HK$10.8B

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Tencent Music Entertainment Group · Fair Value
HK$66.60 +102%Fair Value
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<a href="https://www.fairvalue-calculator.com/stock/1698" target="_blank" rel="nofollow noopener" style="display:inline-flex;align-items:center;gap:12px;box-sizing:border-box;font-family:system-ui,-apple-system,Segoe UI,Roboto,sans-serif;text-decoration:none;background:#0f1814;color:#eaf2ed;border:1px solid #2a3a30;border-radius:12px;padding:12px 16px;max-width:360px"><span style="line-height:1.35"><span style="font-size:12px;color:#9fb0a8">Tencent Music Entertainment Group · Fair Value</span><br><b style="font-size:20px">HK$66.60</b> <span style="color:#7BB290;font-weight:700;font-size:14px">+102%</span></span><span style="font-size:11px;color:#7BB290;font-weight:700;margin-left:auto;text-align:right;line-height:1.3">Fair&nbsp;Value<br>Calculator&nbsp;→</span></a>

Cite: Fair Value Calculator (2026). "Tencent Music Entertainment Group Fair Value". https://www.fairvalue-calculator.com/stock/1698

Peer Group

Internet Content & Information · 154 stocks

How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.

Quality Score 75 · Top 25%

Fair Value upside +102% · Top 25%

Return on equity (TTM) 12% · Above median

Return on assets 6% · Top 25%

Net margin (TTM) 26% · Top 25%

Operating margin (TTM) 30% · Top 25%

Revenue growth 7% · Above median

Dividend yield (TTM) 5.1% · Top 25%

Debt / equity 0.04× · Higher than median

Valuation Multiples vs Internet Content & Information median · lower = cheaper

P/E (TTM) 10.4× · Cheaper than 75% of peers

P/B 1.39× · Cheaper than median

P/S (TTM) 3.34× · Pricier than median

P/FCF 1.4× · Cheaper than median

EV/EBITDA 9.6× · Cheaper than median

PEG 1.11× · Cheaper than median

Snowflake

Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.

VALUE 100 · sector 0

FUTURE 37 · sector 31

PAST 48 · sector 10

HEALTH 98 · sector 99

DIVIDEND 100 · sector 44

Values & ESG

Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.

None of the checked exposures detected

ESG scores are not available for this stock yet. Values and ESG data are contextual and can differ between providers.

Similar stocks

10 more Internet Content & Information stocks, each showing price versus our Fair Value estimate (as of Aug 13, 2026).

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Alphabet Inc GOOGL	$343.54	$145.14	-58%
Meta Platforms, Inc META	$578.85	$534.91	-8%
Tencent Holdings 0700	HK$461.60	HK$448.17	-3%
Spotify Technology S.A SPOT	$489.60	$210.99	-57%
Reddit, Inc RDDT	$153.45	$39.59	-74%
Baidu, Inc BIDU	$104.84	$66.96	-36%
Kuaishou Technology, an investment holding company, 1024	HK$41.54	HK$84.61	+104%
NAVER Corporation 035420	215,500 KRW	231,585 KRW	+7%
Kakao Corp 035720	40,100 KRW	24,536 KRW	-39%
Info Edge (India) Limited NAUKRI	₹1,357	₹329.27	-76%

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Frequently asked questions

Is Tencent Music Entertainment Group (1698) overvalued or undervalued?

As of Aug 13, 2026, our model estimates a fair value of HK$66.60 versus a price of HK$32.94, about +102% (undervalued).

What is the fair value of 1698?

Our model-based fair value for Tencent Music Entertainment Group is HK$66.60 (as of Aug 13, 2026), built from audited fundamentals. The current price is HK$32.94.

What is the quality score of 1698?

Tencent Music Entertainment Group has a Quality Score of 75/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.

What is the revenue of Tencent Music Entertainment Group (1698)?

Tencent Music Entertainment Group reported trailing-twelve-month revenue of about HK$33.4B (latest available figure, as of Aug 13, 2026).

What is the net profit margin of 1698?

The net profit margin of Tencent Music Entertainment Group is about 26.5%, meaning it keeps roughly 26.5% of revenue as net income. Based on the latest reported figures.

Does Tencent Music Entertainment Group pay a dividend?

Tencent Music Entertainment Group currently shows a dividend yield of about 5.11% relative to its recent price (as of Aug 13, 2026).

How we calculate Fair Value

Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.

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