Tencent Music’s Stock Surges by 200%, Strengthening K-pop Partnerships to Dominate Chinese Market

Tencent Music, China’s largest music streaming platform, has drawn significant market attention as its stock price rose by more than 200% this year. Analysts believe intensified collaborations with K-pop artists are the key driving force behind this reevaluation of its stock value. As a music platform subsidiary of China’s biggest internet company, Tencent, it operates multiple streaming services including QQ Music, Kugou Music, and Kuwo Music. As of the end of June, it had 124.4 million paid subscribers and 553 million monthly active users, enjoying overwhelming dominance in China where Spotify is unavailable. What has fueled recent stock gains is Tencent Music’s aggressive plan to expand its offline business operations. While strengthening its position in the online music streaming market, it is diversifying into areas such as concerts, merchandise, advertising, and music distribution. In effect, it is transforming into a comprehensive entertainment company active in all aspects related to music. In the second quarter alone, its revenue increased by 17.9% year-on-year to 8.44 billion yuan (approximately 1.7127 trillion won), while net profit rose by 43.2% to 2.41 billion yuan. Cao Xunfang, chairman of Tencent Music, stated that “as music subscription services serve as the core growth driver, the expansion of music-related services such as advertising, concerts, and merchandise has been particularly notable.” Behind Tencent Music’s strong performance lies its all-around collaboration with the K-pop industry. It has signed partnerships with Galaxy Corporation as the tour partner for G-Dragon and for merchandise sales in China, and it has also formed alliances with YG Entertainment and Starship Entertainment to organize events for K-pop idol groups in China. Notably, in June, HYBE acquired 2.212237 million shares (9.38%) of SM Entertainment that HYBE previously held, rising to become the second-largest shareholder in SM. Industry analysts predict that Tencent Music will continue to see its stock reevaluated positively due to its unique role in connecting China’s domestic market with K-pop. Benefits are expected to increase further if China lifts its “Hallyu restrictions.” This is because Tencent Music can act as a key partner when K-pop singers become more active in China. According to TipRanks, 11 out of 12 Wall Street experts who rated Tencent Music recommended a “buy” rating, with an average target price of $28.23—indicating potential gains of over 20% compared to the current stock price.