TMETencent Music Entertainment Group
Is the business good?
The checks split: mostly cash-backed earnings (0.9×) and margins steady.
Operating profit is mostly backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
Margin-driven, fat margins on slower asset turns. ROE 14% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is TME?
Tencent Music Entertainment Group keeps 41% of every revenue dollar as operating profit, against 5.7% for the median Internet Content & Information name.
Operating margin · Internet Content & Information median 5.7% · fiscal year to FY2025
- Cash conversion
- 0.90×
Cash conversion · 1.45× a year ago · most of the operating profit arrived as cash, working capital took the rest
- Share count, year on year
- −0.70%
Share count, year on year · flat: no meaningful dilution
- R&D as % of revenue
- 7.0%
R&D as % of revenue
| Year | Operating margin |
|---|---|
| FY2020 | 16% |
| FY2021 | 12% |
| FY2022 | 16% |
| FY2023 | 22% |
| FY2024 | 31% |
| FY2025 | 41% |
Details›
- Gross marginfiscal year to FY2025
- 44%
- Operating marginfiscal year to FY2025
- 41%
- Net marginfiscal year to FY2025
- 34%
- Free cash flow margin
- 30%
- R&D as % of revenue
- 7.0%
- Revenue, trailing twelve months
- $32.9B
- Free cash flow, trailing twelve months
- $9.93B
- Net income, trailing twelve months
- $11.1B
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Internet Content & Information
Ranks #3 of 30 by RyuScore