Tencent Music beats quarterly revenue estimates

By Josh Ye

HONG KONG (Reuters) - China's Tencent Music Entertainment Group beat fourth-quarter revenue estimates on Tuesday, driven by growth in paid subscription on its Spotify-like music streaming platform.

The audio entertainment platform reported revenue of 6.89 billion yuan ($957.06 million) for the quarter, marking a 7.2% decline as compared to the same period last year. Analysts on average had expected revenue of 6.71 billion yuan, according to LSEG data.

The number of paying users rose to 106.7 million, marking a 21% jump for the quarter as compared to the same period last year.

In an earnings call on Tuesday, Cussion Pang, the company’s executive chairman, attributed the growth in subscribers to "the efficient execution of Tencent Music’s content and platform dual engine strategy and the counter-cyclical feature of the music industry."

But the online music service still suffered a year-on-year revenue decline, which is a partly result of China's regulatory crackdown on music platforms' chance-based features last year.

Charlie Chai, a Shanghai-based analyst at 86Research, said, "The social entertainment segment is still feeling the pains from the recent regulatory crackdown. The gambling-related revenue took a much higher-than-expected percentage of Tencent Music's revenue, and this part is now disappearing."

U.S.- listed shares of Tencent Music rose 2% in morning trading in New York.

The company's online music service revenue jumped 41.1% to 5.02 billion yuan year-on-year, thanks to steady growth in paid subscriptions and advertising services.

Tencent Music's earnings per American depository share (ADS)stood at 0.83 yuan, compared to 0.72 yuan in the same period a year earlier.

($1 = 7.1991 Chinese yuan renminbi)

(This March 19 story has been refiled to change the earnings call day to Tuesday from Wednesday in paragraph 4)

(Reporting by Josh Ye in Hong Kong and Priyanka.G in Bengaluru; Editing by Maju Samuel and Franklin Paul)