TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - NYSE:TME - US88034P1093 - ADR
25 USD
-0.62 (-2.42%)
25.15 USD
+0.15 (+0.6%)
Overall TME gets a fundamental rating of 7 out of 10. We evaluated TME against 80 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making TME a very profitable company, without any liquidiy or solvency issues. TME is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes TME very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
TME had positive earnings in the past year.
TME had a positive operating cash flow in the past year.
In the past 5 years TME has always been profitable.
In the past 5 years TME always reported a positive cash flow from operatings.
1.2 Ratios
TME has a better Return On Assets (11.32%) than 91.25% of its industry peers.
TME has a better Return On Equity (15.09%) than 86.25% of its industry peers.
TME's Return On Invested Capital of 9.71% is amongst the best of the industry. TME outperforms 85.00% of its industry peers.
TME had an Average Return On Invested Capital over the past 3 years of 6.52%. This is below the industry average of 9.25%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(9.71%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.32% | ||
| ROE | 15.09% | ||
| ROIC | 9.71% |
ROA(3y)6.45%
ROA(5y)5.99%
ROE(3y)8.75%
ROE(5y)8.04%
ROIC(3y)6.52%
ROIC(5y)5.78%
1.3 Margins
TME has a Profit Margin of 33.83%. This is amongst the best in the industry. TME outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of TME has grown nicely.
TME has a better Operating Margin (28.23%) than 96.25% of its industry peers.
In the last couple of years the Operating Margin of TME has grown nicely.
TME's Gross Margin of 43.72% is in line compared to the rest of the industry. TME outperforms 50.00% of its industry peers.
TME's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% |
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TME is still creating some value.
TME has less shares outstanding than it did 1 year ago.
The number of shares outstanding for TME has been reduced compared to 5 years ago.
TME has a better debt/assets ratio than last year.
2.2 Solvency
TME has an Altman-Z score of 8.79. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TME (8.79) is better than 92.50% of its industry peers.
The Debt to FCF ratio of TME is 0.69, which is an excellent value as it means it would take TME, only 0.69 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.69, TME belongs to the top of the industry, outperforming 86.25% of the companies in the same industry.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
TME has a Debt to Equity ratio of 0.06. This is in the better half of the industry: TME outperforms 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.69 | ||
| Altman-Z | 8.79 |
ROIC/WACC1.37
WACC7.09%
2.3 Liquidity
TME has a Current Ratio of 2.09. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.09, TME is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.09, TME is in the better half of the industry, outperforming 76.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
3. Growth
3.1 Past
TME shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.73%, which is quite impressive.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 10.52% in the last year.
The Revenue has been growing slightly by 2.23% on average over the past years.
EPS 1Y (TTM)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%
3.2 Future
Based on estimates for the next years, TME will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.12% on average per year.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 15.09% on average per year.
EPS Next Y17.94%
EPS Next 2Y17.93%
EPS Next 3Y17.02%
EPS Next 5Y17.12%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.09%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
TME is valuated quite expensively with a Price/Earnings ratio of 31.65.
80.00% of the companies in the same industry are more expensive than TME, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.30, TME is valued at the same level.
TME is valuated quite expensively with a Price/Forward Earnings ratio of 26.08.
Based on the Price/Forward Earnings ratio, TME is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.73. TME is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.65 | ||
| Fwd PE | 26.08 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA is on the same level as the industry average.
TME's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TME is cheaper than 77.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.17 | ||
| EV/EBITDA | 25.12 |
4.3 Compensation for Growth
TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TME's earnings are expected to grow with 17.02% in the coming years.
PEG (NY)1.76
PEG (5Y)2.91
EPS Next 2Y17.93%
EPS Next 3Y17.02%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.20%, TME has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 12.26, TME pays a better dividend. On top of this TME pays more dividend than 88.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, TME's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
5.2 History
TME does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DPN/A
EPS Next 2Y17.93%
EPS Next 3Y17.02%
25
-0.62 (-2.42%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners76.15%
Inst Owner Change-7.15%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap38.52B
Analysts81.18
Price Target27.64 (10.56%)
Short Float %6.8%
Short Ratio3.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
Yearly Dividend0.13
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.25%
Min EPS beat(2)2.25%
Max EPS beat(2)12.25%
EPS beat(4)3
Avg EPS beat(4)5.56%
Min EPS beat(4)-4.78%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.76%
EPS beat(12)10
Avg EPS beat(12)5.02%
EPS beat(16)13
Avg EPS beat(16)6.05%
Revenue beat(2)2
Avg Revenue beat(2)2.56%
Min Revenue beat(2)0.15%
Max Revenue beat(2)4.97%
Revenue beat(4)3
Avg Revenue beat(4)1.24%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)4.97%
Revenue beat(8)6
Avg Revenue beat(8)1.28%
Revenue beat(12)9
Avg Revenue beat(12)1.13%
Revenue beat(16)10
Avg Revenue beat(16)0.84%
PT rev (1m)40.64%
PT rev (3m)59.36%
EPS NQ rev (1m)5.68%
EPS NQ rev (3m)5.76%
EPS NY rev (1m)4.11%
EPS NY rev (3m)3.06%
Revenue NQ rev (1m)4.4%
Revenue NQ rev (3m)4.98%
Revenue NY rev (1m)3.37%
Revenue NY rev (3m)3.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.65 | ||
| Fwd PE | 26.08 | ||
| P/S | 9.06 | ||
| P/FCF | 31.17 | ||
| P/OCF | 31.17 | ||
| P/B | 4.04 | ||
| P/tB | 5.94 | ||
| EV/EBITDA | 25.12 |
EPS(TTM)0.79
EY3.16%
EPS(NY)0.96
Fwd EY3.84%
FCF(TTM)0.8
FCFY3.21%
OCF(TTM)0.8
OCFY3.21%
SpS2.76
BVpS6.18
TBVpS4.21
PEG (NY)1.76
PEG (5Y)2.91
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.32% | ||
| ROE | 15.09% | ||
| ROCE | 11.56% | ||
| ROIC | 9.71% | ||
| ROICexc | 15.37% | ||
| ROICexgc | 28.71% | ||
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% | ||
| FCFM | 29.08% |
ROA(3y)6.45%
ROA(5y)5.99%
ROE(3y)8.75%
ROE(5y)8.04%
ROIC(3y)6.52%
ROIC(5y)5.78%
ROICexc(3y)9.52%
ROICexc(5y)8.88%
ROICexgc(3y)19.59%
ROICexgc(5y)19.68%
ROCE(3y)7.76%
ROCE(5y)6.88%
ROICexcg growth 3Y16.02%
ROICexcg growth 5Y-26.04%
ROICexc growth 3Y28.21%
ROICexc growth 5Y-2.74%
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
F-Score5
Asset Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.69 | ||
| Debt/EBITDA | 0.4 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.44% | ||
| Profit Quality | 85.96% | ||
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 | ||
| Altman-Z | 8.79 |
F-Score5
WACC7.09%
ROIC/WACC1.37
Cap/Depr(3y)104.08%
Cap/Depr(5y)129.71%
Cap/Sales(3y)3.85%
Cap/Sales(5y)4.42%
Profit Quality(3y)146.47%
Profit Quality(5y)125.36%
High Growth Momentum
Growth
EPS 1Y (TTM)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
EPS Next Y17.94%
EPS Next 2Y17.93%
EPS Next 3Y17.02%
EPS Next 5Y17.12%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.09%
EBIT growth 1Y43.69%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year42.99%
EBIT Next 3Y21.58%
EBIT Next 5Y22.59%
FCF growth 1Y14.83%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y14.83%
OCF growth 3Y25.17%
OCF growth 5Y10.63%