Tencent Music Poised for More Growth, Say Analysts

Tencent Music (NYSE:TME), a blend of music streaming and social networking, is benefitting from its relationship with Chinese internet giant Tencent, giving it an advantage in attracting users.

Tencent Music is the dominant online music platform in China. The stock, which recently had its initial public offering in the U.S., could be a great long-term investment for growth-oriented investors, say analysts.

“Not only does Tencent Music have a sensible strategy to increase monetization of its platform, but it also benefits from the growth of internet usage in China,” The Motley Fool reports. “Tencent Music holds the pieces of a high-quality business with significant growth potential.”

The company’s affiliation with WeChat is almost an unfair competitive advantage relative to other online platforms. It has enabled it to amass the largest user base in the Chinese music industry. The key to Tencent Music’s business model is the social aspect of its platform and how it monetizes social interactions between users. Turning a music service into a social networking experience has been good for its business.

The company’s stock has traded strongly since its IPO, where it priced at $13 per share. And it could continue rising because the company has a bright future ahead with healthy revenue growth and a uniquely profitable business model.

Source: The Motley Fool