Tencent Music Entertainment Group Announces Third Quarter 2019 Unaudited Financial Results

SHENZHEN, China, Nov. 11, 2019 /PRNewswire/ -- Tencent Music Entertainment Group ("Tencent Music," "TME," or the "Company") (NYSE: TME), the leading online music entertainment platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2019.

Financial and Operational Highlights

In the three months ended September 30, 2019:

    --  Online music paying users reached 35.4 million, indicating an increase
        of 42.2% year-over-year. On a sequential basis, the number of online
        music paying users grew by 4.4 million, up from 2.6 million in the
        second quarter and 1.4 million in the first quarter of 2019,
        representing the largest net increase since 2016 and continuing the
        accelerating growth trend.
    --  Total revenues were RMB6.51 billion (US$910 million), with an increase
        of 31.0% year-over-year.
    --  Operating profit was RMB1.19 billion (US$166 million), with an increase
        of 11.9% year-over-year.
    --  Net profit attributable to equity holders of the Company was RMB1.03
        billion (US$144 million), with an increase of 6.4% year-over-year.
    --  Non-IFRS net profit attributable to equity holders of the Company
        (excluding amortization of intangible assets and other assets arising
        from business combinations, share-based compensation expenses, net gains
        or losses from investments, fair value change on puttable shares and
        income tax effects) increased by 8.0% year-over-year to RMB1.24 billion
        (US$173 million).

"We continued our solid performance in the third quarter, driven by healthy growth from both online music and social entertainment services. We are particularly pleased to report accelerating growth of our online music paying users, representing a 42.2% year-over-year increase, as the net increase in the third quarter reached 4.4 million, achieving another quarterly high and outpacing the record growth in the second quarter. More importantly, the high quality of this growth was demonstrated by the ARPPU expansion of 3.5% quarter-over-quarter. This is a strong endorsement of our continuous efforts to unlock the intrinsic value of music through our integrated music platform, and to cultivate the willingness of users to pay for premium music services," said Mr. Cussion Pang, Chief Executive Officer of Tencent Music. "Thanks to our vast user base, deep understanding of music trends and user insights, we continued to develop our platform as the go-to destination for artists to build a fan-based economy. This strength, coupled with further investment in various forms of content, technology and services, will solidify our platform as an all-in-one music entertainment destination."

Mr. Tony Yip, Chief Strategy Officer of Tencent Music, said, "In the third quarter, we continued to invest in product innovations to further expand our user base and increase user engagement. We pioneered the introduction of short videos to music streaming pages for users to enjoy while listening to music. We also added new social and gamification features within our social entertainment applications to facilitate connections among users. In addition, we continued to enrich our content ecosystem to extend further beyond songs to include a wider range of offering, including long-form audio, PGC and UGC short videos, music-centric variety shows and original music for games, films and TV shows as well as from our musician program. From talent discovery, content distribution and promotion, to fan-based economy, our platform continues to benefit from the unique virtuous cycle of synergies between online music and social entertainment."

"We delivered strong financial performance in the third quarter with a top-line growth of 31.0%, along with solid operating margins and cash flow," commented Ms. Shirley Hu, Chief Financial Officer of Tencent Music. "Our online music subscription revenue increased significantly by 48.3% year-over-year, driven by strong growth of paying users and ARPPU expansion. New album releases boosted our revenue from digital albums to double in this quarter compared to the third quarter of last year. Our social entertainment and others revenues grew at a healthy rate of 32.9% as we continued to expand the paying user base of our social entertainment services. Our investments in premium content have not only resulted in sound financial return, but also solidified the leadership of our platform. Looking forward, we will strengthen the synergies between our online music and social entertainment businesses and continue to invest in long-term growth initiatives."

Operational Highlights

    --  TME's key operating metrics* continue to grow across both online music
        and social entertainment services.

                                                    
     3Q19     
     3Q18      YoY %



     Mobile MAU - online music (million)                  661         655    0.9%



     Mobile MAU - social entertainment (million)          242         225    7.6%



     Paying users - online music (million)               35.4        24.9   42.2%



     Paying users - social entertainment (million)       12.2         9.9   23.2%



     Monthly ARPPU - online music (RMB)                   8.9         8.5    4.7%



     Monthly ARPPU - social entertainment (RMB)         127.3       118.5    7.4%
    --  In the third quarter of 2019, the Company further strengthened its
        industry-leading content offering through the following initiatives: (i)
        adding strategic partnerships with more music labels in both mainstream
        and long tail genres and (ii) adding a wider range of content including
        music-centric variety shows, premium original music for games, films and
        TV shows, short-form videos, as well as long-form audio such as podcasts
        and audio books.
    --  The Company further penetrated a younger demographic of music users by:
        (i) expanding partnerships to reach hundreds of universities and higher
        education institutions in China, (ii) adapting to the preferences of
        younger music users by adding genres such as Urban, EDM, Animation,
        Comic and Gaming, as well as Chinese ancient style, which has enjoyed a
        rising trend of popularity among young people as it combines China's
        traditional culture with popular trends and provides the young
        demographic a strong sense of cultural identity, and (iii) launching
        special promotion events for the monthly subscription plan as well as
        live streaming new song releasing events for students.
    --  The Company further solidified its promotional capabilities and became
        the preferred destination for artists to build a long-term, stable and
        reciprocal fan-based economy. Through interactive activities, the
        Company helps established, up-and-coming, domestic and international
        artists to promote music to a broader audience in an engaging manner and
        through both online and offline channels: (i) TME not only aided Jay
        Chou's new single, Won't Cry, to achieve record sales result, but also
        facilitated the viral spread of social buzz, and inspired more than 12
        million karaoke recordings by the Company's WeSing users within 10 days
        after its release, further extending the single's popularity; (ii)
        created an interactive environment for Taylor Swift and her fans in
        China to engage and to express views on its music platform. The title
        song of her new digital album Lover sold nearly 6 million copies within
        24 hours on its platform after release, and (iii) for TFBOYS' 6-year
        anniversary concert, TME live streamed the event to promote greater
        participation online and offline amongst fans across the country and
        provided an opportunity for fans to show appreciation to their idols
        through virtual gifts.
    --  TME's musician program has become a leading online music platform for
        original music in China, offering a full suite of services to nurture
        and promote up-and-coming independent artists. Its open platform not
        only significantly simplifies the process for artists to upload and
        manage their soundtracks, but also provides them with user data analysis
        and actionable intelligence on music trends. The total number of
        uploaded songs by up-and-coming musicians for the first nine months of
        this year more than doubled year-over-year. The average number of daily
        streams of original songs on TME's integrated music platform including
        QQ Music, Kugou Music and Kuwo Music was up almost 200% compared with
        the same period a year ago.
    --  The Company continued to offer comprehensive online and offline
        resources to uphold copyright protection and continues its journey of
        educating users by unlocking the intrinsic value of music to hundreds of
        millions of music lovers in China.
    --  The Company continued to improve the efficiency in content curation and
        accuracy of personalized recommendation by utilizing deep learning and
        data mining, which has resulted in a substantial increase in average
        daily streams and user engagements for both its online music and social
        entertainment services.
    --  The Company continued to make concerted efforts in product enhancement
        and innovation to cater to user demands, which has led to improved user
        engagement. These efforts include: (i) adding a wide range of
        professionally generated and user generated short videos to music
        streaming platform; (ii) bolstering social and young attributes on the
        WeSing platform by adding new forms of content such as mini
        live-streaming reality shows and new features such as universal duet
        that encourage users to interact, and (iii) developing a song
        recognition tool which enables users to recognize within seconds songs
        embedded in short videos.

               [*] For the definitions of the
                above operating metrics,
                please refer to the
                introduction section in the
                Company's 20-F filed on April
                19, 2019.

THIRD Quarter 2019 Financial Results

Revenues

Total revenues for the third quarter of 2019 increased by RMB1.54 billion, or 31.0%, to RMB6.51 billion (US$910 million) from RMB4.97 billion in the same period of 2018.

    --  Revenues from online music services for the third quarter of 2019
        increased by 26.2% to RMB1.85 billion (US$258 million) from RMB1.46
        billion in the same period of 2018. The increase was driven by strong
        growth in revenues from music subscriptions and sales of digital music
        albums, offset by a decrease in sublicensing revenues from other music
        platforms. Revenues from music subscriptions were RMB942 million (US$132
        million), a 48.3% increase from RMB635 million in the third quarter of
        2018, primarily due to improved paying user retention rate and increased
        number of paying users.
    --  Revenues from social entertainment services and others for the third
        quarter of 2019 increased by 32.9% to RMB4.66 billion (US$652 million)
        from RMB3.51 billion in the same period of 2018, primarily driven by
        revenue growth in both online karaoke and music-centric live streaming
        services. The Company expanded the paying user base of its social
        entertainment services by 23.2% and increased ARPPU by 7.4% in the third
        quarter of 2019, compared with the same period of 2018.

Cost of Revenues

Cost of revenues for the third quarter of 2019 increased by 42.9% to RMB4.30 billion (US$601 million) from RMB3.01 billion in the same period of 2018, primarily due to the increase in content expenses and revenue sharing fees. The increase in content expenses was mainly attributable to the increase in market prices and amount of licensed and original music content. The increase in revenue sharing fees reflected the growth in the Company's social entertainment services.

Gross Profit

Gross profit for the third quarter of 2019 increased by 12.6% to RMB2.21 billion (US$309 million) from RMB1.96 billion in the same period of 2018. Gross margin was 34.0% for the third quarter of 2019.

Operating Expenses for the Period

Total operating expenses for the third quarter of 2019 increased by RMB260 million, or 26.6%, to RMB1.24 billion (US$173 million) from RMB977 million in the same period of 2018. Operating expenses as a percentage of total revenues was 19.0% in the third quarter compared with 19.7% in the same period of 2018.

    --  Selling and marketing expenses for the third quarter of 2019 were RMB517
        million (US$72 million), representing an increase of 19.1%
        year-over-year from RMB434 million in the same period of 2018. The
        increase was primarily due to increased spending on branding and paying
        user conversion.
    --  General and administrative expenses for the third quarter of 2019 were
        RMB720 million (US$101 million), representing an increase of 32.6%
        year-over-year from RMB543 million in the same period of 2018. The
        Company continued to increase its investment in research and development
        to expand its competitive advantages in product and technology
        innovations.

Operating Profit for the Period

Operating profit increased by 11.9% to RMB1.19 billion (US$166 million) in the third quarter of 2019 from RMB1.06 billion in the same period of 2018.

Net Profit and Non-IFRS Net Profit for the Period

Net profit attributable to equity holders of the Company for the third quarter of 2019 was RMB1.03 billion (US$144 million), compared with RMB964 million in the same period of 2018. Non-IFRS net profit attributable to equity holders of the Company was RMB1.24 billion (US$173 million) for the third quarter of 2019, compared with RMB1.15 billion in the same period of 2018. Please refer to the section titled "Non-IFRS Financial Measure" for details.

Earnings per ADS

Basic and diluted earnings per American Depositary Shares ("ADS") were RMB0.63 (US$0.09) and RMB0.62 (US$0.09), respectively, for the third quarter of 2019. Excluding amortization of intangible assets and other assets arising from business combinations, share-based compensation expenses, net losses from investments, fair value change on puttable shares and income tax effects, non-IFRS basic and diluted earnings per ADS were RMB0.76 (US$0.11) and RMB0.74 (US$0.10), respectively, for the third quarter of 2019. During the third quarter of 2019, the Company had weighted averages of 1.63 billion basic and 1.67 billion diluted ADSs outstanding, respectively. Each ADS represents two of the Company's Class A ordinary shares.

Cash Flow

Net cash provided by operating activities for the third quarter of 2019 was RMB1.35 billion (US$189 million), compared with RMB1.64 billion of cash provided by operating activities during the same period of 2018. Net cash used in investing activities for the third quarter of 2019 was RMB680 million (US$95 million), primarily due to investments in term deposits and short-term investments during the quarter, compared with net cash provided by investing activities of RMB333 million during the same period of 2018.

Cash, Cash Equivalents and Term Deposits

As of September 30, 2019, the combined balance of the Company's cash, cash equivalents and term deposits amounted to RMB21.14 billion (US$2.96 billion), compared with RMB19.90 billion as of June 30, 2019. The increase in cash, cash equivalents and term deposits was primarily due to cash flow generated from operations of RMB1.35 billion (US$189 million). The Company's cash and cash equivalents balance was also affected by the change in the exchange rate of RMB to USD at different balance sheet dates. The exchange rate was 7.1477 to 1 on September 30, 2019, and 6.8650 to 1 on June 30, 2019.

Conference Call Information

Tencent Music's management will hold a conference call on Monday, November 11, 2019, at 8:00 P.M. Eastern Time or 9:00 A.M. Beijing Time on Tuesday, November 12, 2019, to discuss the financial results. Listeners may access the call by dialing the following numbers:


               United States Toll Free:                  +1-888-317-6003



              International:                            +1-412-317-6061


               Mainland China Toll Free:      
              400-120-6115


               Hong Kong, China Toll Free:    
              800-963-976



              Access Code:                                      3368975

The replay will be accessible through November 18, 2019, by dialing the following numbers:


               United States Toll Free:    
              +1-877-344-7529



              International:              
              +1-412-317-0088



              Access Code:                                   10135231

A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.tencentmusic.com/.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB7.1477 to US$1.00, the noon buying rate in effect on September 30, 2019, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all. For analytical presentation, all percentages are calculated using the numbers presented in the financial statements contained in this earnings release.

Non-IFRS Financial Measure

The Company uses non-IFRS net profit for the year/period, which is a non-IFRS financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Tencent Music believes that non-IFRS net profit helps identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that the Company includes in its profit for the year/period. Tencent Music believes that non-IFRS net profit for the year/period provides useful information about its results of operations, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by its management in its financial and operational decision-making.

Non-IFRS net profit for the year/period should not be considered in isolation or construed as an alternative to operating profit, net profit for the year/period or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review non-IFRS net profit for the year/period and the reconciliation to its most directly comparable IFRS measure. Non-IFRS net profit for the year/period presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. Tencent Music encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Non-IFRS net profit for the year/period represents profit for the year excluding share-based compensation expenses, net loss from investments, amortization of intangible and other assets resulting from the business combinations, fair value change on liabilities of puttable shares and income tax effects.

Please see the "Unaudited Non-IFRS Financial Measure" included in this press release for a full reconciliation of Non-IFRS net profit for the year/period to its net profit for the year/period.

About Tencent Music Entertainment

Tencent Music Entertainment Group (NYSE: TME) is the leading online music entertainment platform in China, operating the country's highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. Tencent Music's mission is to use technology to elevate the role of music in people's lives by enabling them to create, enjoy, share and interact with music. Tencent Music's platform comprises online music, online karaoke and music-centric live streaming services, enabling music fans to discover, listen, sing, watch, perform and socialize around music. For more information, please visit ir.tencentmusic.com.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact
Tencent Music Entertainment Group
ir@tencentmusic.com
+86 (755) 8601-3388 ext. 857811

The Piacente Group, Inc.
Brandi Piacente
Email: TME@tpg-ir.com
Tel: +1 (212) 481-2050

Ross Warner
Email: TME@tpg-ir.com
Tel: +86 (10) 6508-0677

Media Relations Contact
tme.pr@icrinc.com
+1 (646) 992-2986


                                                                                                                     
          
                TENCENT MUSIC ENTERTAINMENT GROUP


                                                                                                                       
          
                CONSOLIDATED INCOME STATEMENT




                                                                     
         
               Three Months Ended         
          
               Nine Months Ended



                                                                     
         
               September 30, 2018                       September 30, 2019              
              
        September 30, 2018                             September 30, 2019


                                                                         
           
                 RMB                  
          
                 RMB                        
             
          US$             
       
        RMB                                   
       
         RMB           
       
        US$



                                                                       
          
                 Unaudited             
          
                Unaudited                  
              
         Unaudited        
       
       Unaudited                              
       
        Unaudited      
       
       Unaudited


                                                                             (in millions, except per share data)               (in millions, except per share data)



              
                Revenues



              Online music services                                                                        1,463                             1,846                                        258                           4,016                                      5,013                     701



              Social entertainment services and others                                                     3,506                             4,661                                        652                           9,572                                     13,128                   1,837



                                                                                                            4,969                             6,507                                        910                          13,588                                     18,141                   2,538



              Cost of revenues                                                                           (3,006)                          (4,296)                                     (601)                        (8,147)                                  (11,956)                (1,673)




              
                Gross profit                                                                    1,963                             2,211                                        309                           5,441                                      6,185                     865





              Selling and marketing expenses                                                               (434)                            (517)                                      (72)                        (1,172)                                   (1,370)                  (192)



              General and administrative expenses                                                          (543)                            (720)                                     (101)                        (1,448)                                   (1,956)                  (274)




              Total operating expenses                                                                     (977)                          (1,237)                                     (173)                        (2,620)                                   (3,326)                  (465)



              Interest income                                                                                 82                               154                                         22                             182                                        442                      62



              Other (losses)/ gains, net                                                                     (6)                               60                                          8                               6                                        119                      17




              
                Operating profit                                                                1,062                             1,188                                        166                           3,009                                      3,420                     478





              Share of loss of investments accounted for                                                     (4)                              (2)                                       (0)                           (11)                                      (10)                    (1)
    using equity method



              Finance Cost                                                                                   (9)                             (18)                                       (3)                           (26)                                      (57)                    (8)



              
                Profit before income tax                                                        1,049                             1,168                                        163                           2,972                                      3,353                     469





              Income tax expense                                                                            (85)                            (145)                                      (20)                          (265)                                     (416)                   (58)



              
                Profit for the period                                                             964                             1,023                                        143                           2,707                                      2,937                     411






              
                Attributable to:



              Equity holders of the Company                                                                  964                             1,026                                        144                           2,709                                      2,940                     411



              Non-controlling interests                                                                                                       (3)                                       (0)                            (2)                                       (3)                    (0)





              
                Earnings per share for Class A and Class
    B ordinary shares



              Basic                                                                                         0.31                              0.31                                       0.04                            0.89                                       0.90                    0.13



              Diluted                                                                                       0.30                              0.31                                       0.04                            0.86                                       0.88                    0.12





              
                Earnings per ADS (2 Class A shares
    equal to 1 ADS)



              Basic                                                                                                                          0.63                                       0.09                                                                      1.80                    0.25



              Diluted                                                                                                                        0.62                                       0.09                                                                      1.76                    0.25





              
                Shares used in earning per Class A and
    Class B ordinary share computation:



              Basic                                                                                3,080,492,207                     3,269,006,517                              3,269,006,517                   3,060,847,486                              3,264,217,250           3,264,217,250



              Diluted                                                                              3,169,894,362                     3,331,806,938                              3,331,806,938                   3,139,115,477                              3,342,280,671           3,342,280,671





              
                ADS used in earnings per ADS
    computation



              Basic                                                                                                                 1,634,503,259                              1,634,503,259                                                             1,632,108,625           1,632,108,625



              Diluted                                                                                                               1,665,903,469                              1,665,903,469                                                             1,671,140,336           1,671,140,336


                                                                                                                                                                                                   
          
            TENCENT MUSIC ENTERTAINMENT GROUP


                                                                                                                                                                                                  
          
            UNAUDITED NON-IFRS FINANCIAL MEASURE




                                                                                                                                               
              
                Three Months Ended            
          
            Nine Months Ended



                                                                                                                                               
              
                September 30, 2018                       September 30, 2019              
          
       September 30, 2018                      September 30, 2019


                                                                                                                                                      
              
                 RMB                     
          
              RMB                        
        
          US$           
     
     RMB                                 
     
         RMB         
     
        US$



                                                                                                                                                             (in millions, except per share data)               (in millions, except per share data)



              
                Profit  for the period                                                                                                                                            964                             1,023                                   143                    2,707                                  2,937                 411



              Adjustments:



              Amortization of intangible and other assets arising                                                                                                                             75                                91                                    13                      219                                    271                  38
    from business combinations*



              Share-based compensation                                                                                                                                                       110                               129                                    18                      345                                    382                  53



              Losses/(gains) from investments                                                                                                                                                  1                                                                                                                                  (1)                (0)



              Fair value change on puttable shares **                                                                                                                                          9                                 9                                     1                       26                                     27                   4



              Income tax effects***                                                                                                                                                         (14)                             (18)                                  (3)                    (40)                                  (53)                (7)



              
                Non-IFRS Net Profit                                                                                                                                             1,145                             1,234                                   173                    3,257                                  3,563                 498






              
                Attributable to:



              Equity holders of the Company                                                                                                                                                1,145                             1,237                                   173                    3,259                                  3,566                 499



              Non-controlling interests                                                                                                                                                                                       (3)                                  (0)                     (2)                                   (3)                (0)





              
                Earnings per share for Class A and Class B
    ordinary shares



              Basic                                                                                                                                                                         0.37                              0.38                                  0.05                     1.06                                   1.09                0.15



              Diluted                                                                                                                                                                       0.36                              0.37                                  0.05                     1.04                                   1.07                0.15





              
                Earnings per ADS (2 Class A shares equal to 1
    ADS)



              Basic                                                                                                                                                                                                          0.76                                  0.11                                                           2.18                0.31



              Diluted                                                                                                                                                                                                        0.74                                  0.10                                                           2.13                0.30





              
                Shares used in earnings per Class A and
    Class B ordinary share computation:



              Basic                                                                                                                                                                3,080,492,207                     3,269,006,517                         3,269,006,517            3,060,847,486                          3,264,217,250       3,264,217,250



              Diluted                                                                                                                                                              3,169,894,362                     3,331,806,938                         3,331,806,938            3,139,115,477                          3,342,280,671       3,342,280,671





              
                ADS used in earnings per ADS computation



              Basic                                                                                                                                                                                                 1,634,503,259                         1,634,503,259                                                  1,632,108,625       1,632,108,625



              Diluted                                                                                                                                                                                               1,665,903,469                         1,665,903,469                                                  1,671,140,336       1,671,140,336











              * Represents the amortization of identifiable assets, including intangible assets and prepayments for music content, resulting from Tencent's acquisition of CMC in
    2016, our acquisition of Ultimate Music in 2017, and our acquisition of certain subsidiaries in 2018 and 2019.



              ** Represents the fair value changes on the put liability of certain shares issued in 2018



              *** Represents the income tax effects of amortization of identifiable assets, including intangible assets and prepayments for music content, resulting from business
    combinations


                                                                       
       
       TENCENT MUSIC ENTERTAINMENT GROUP


                                                                         
       
         CONSOLIDATED BALANCE SHEET




                                                                                 
              
                As at December 31, 2018           As at September 30, 2019



                                                                                          
              
                 RMB                 
     
                 RMB           
     
         US$



                                                                                        
              
                 Audited                           Unaudited             Unaudited


                                                                                      
              
                (in millions)



           
                ASSETS



           
                Non-current assets



           Property, plant and equipment                                                                                          168                           162              23



           Intangible assets                                                                                                    1,763                         1,637             229



           Right-of-use assets                                                                                                                                 144              20



           Goodwill                                                                                                            17,088                        17,140           2,398



           Investments accounted for using equity method                                                                          236                           448              63



           Financial assets at fair value through other comprehensive                                                           3,331                         3,448             482
    income



           Other investments                                                                                                      217                           217              30



           Prepayments and deposits                                                                                               901                           850             119



           Deferred tax assets                                                                                                    123                           129              18



           Term deposits                                                                                                                                       500              70



                                                                                                                                23,827                        24,675           3,452






           
                Current assets



           Inventories                                                                                                             35                            32               4



           Accounts receivable                                                                                                  1,483                         1,734             243



           Prepayments, deposits and other assets                                                                               1,823                         2,811             393



           Other investments                                                                                                       39                            37               5



           Short-term investments                                                                                                  42                            16               2



           Term deposits                                                                                                                                       600              84



           Cash and cash equivalents                                                                                           17,356                        20,036           2,803



                                                                                                                                20,778                        25,266           3,535






           
                Total assets                                                                                           44,605                        49,941           6,987








           
                EQUITY



           
                Equity attributable to equity holders of the
    Company



           Share capital                                                                                                            2                             2               0



           Additional paid-in capital                                                                                          33,776                        34,310           4,800



           Shares held for share award schemes                                                                                                                (29)            (4)



           Other reserves                                                                                                         903                         1,277             179



           Retained earnings                                                                                                    3,040                         5,980             837



                                                                                                                                37,721                        41,540           5,812



           
                Non-controlling interests                                                                                  51                            95              13






           
                Total equity                                                                                           37,772                        41,635           5,825






           
                LIABILITIES



           
                Non-current liabilities



           Other payables and other liabilities                                                                                   241                           346              48



           Deferred tax liabilities                                                                                               354                           242              34



           Lease liability                                                                                                                                      86              12



                                                                                                                                   595                           674              94





           
                Current liabilities



           Accounts payable                                                                                                     1,830                         2,496             349



           Other payables and other liabilities                                                                                 2,742                         3,085             432



           Current tax liabilities                                                                                                235                           377              53



           Lease liability                                                                                                                                      57               8



           Deferred revenue                                                                                                     1,431                         1,617             226



                                                                                                                                 6,238                         7,632           1,068





           
                TOTAL LIABILITIES                                                                                       6,833                         8,306           1,162






           
                Total equity and liabilities                                                                           44,605                        49,941           6,987


                                                                                                   
         
                TENCENT MUSIC ENTERTAINMENT GROUP


                                                                                                 
         
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




                                                           
           
           Three Months Ended      
         
                Nine Months Ended



                                                           
           
           September 30, 2018                     September 30, 2019             
              
        September 30, 2018                           September 30, 2019


                                                                 
           
             RMB                 
         
                 RMB                       
             
          US$             
       
        RMB                               
     
         RMB       
     
         US$



                                                               
           
            Unaudited                              Unaudited                                  Unaudited         
       
       Unaudited                                Unaudited         Unaudited


                                                             
           
           (in millions)           
         
                (in millions)





     Net cash provided by operating activities                                            1,644                                1,352                                     189                           3,700                                4,167                583



     Net cash provided by/(used in) investing activities                                    333                                (680)                                   (95)                          (240)                             (1,530)             (214)



     Net cash provided by financing activities                                                                                   37                                       5                           2,855                                   42                  6




     Net increase in cash and cash equivalents                                            1,977                                  709                                      99                           6,315                                2,679                375




     Cash and cash equivalents at beginning of the period                                 9,529                               19,350                                   2,707                           5,174                               17,356              2,428




     Exchange gains/(losses) on cash and cash equivalents                                    23                                 (23)                                    (3)                             40                                    1




     Cash and cash equivalents at end of the period                                      11,529                               20,036                                   2,803                          11,529                               20,036              2,803

View original content:http://www.prnewswire.com/news-releases/tencent-music-entertainment-group-announces-third-quarter-2019-unaudited-financial-results-300955467.html

SOURCE Tencent Music Entertainment Group