TME gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 80 industry peers in the Entertainment industry. TME has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TME is growing strongly while it also seems undervalued. This is an interesting combination This makes TME very considerable for value and growth and quality investing!

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year TME was profitable.
In the past year TME had a positive cash flow from operations.
In the past 5 years TME has always been profitable.
TME had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 11.95%, TME belongs to the top of the industry, outperforming 91.25% of the companies in the same industry.
Looking at the Return On Equity, with a value of 15.93%, TME belongs to the top of the industry, outperforming 86.25% of the companies in the same industry.
TME has a Return On Invested Capital of 10.39%. This is amongst the best in the industry. TME outperforms 87.50% 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 8.74%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(10.39%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	11.95%
ROE	15.93%
ROIC	10.39%

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 better Profit Margin (34.08%) than 100.00% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 28.82%, TME belongs to the top of the industry, outperforming 96.25% of the companies in the same industry.
In the last couple of years the Operating Margin of TME has grown nicely.
With a Gross Margin value of 43.90%, TME perfoms like the industry average, outperforming 51.25% of the companies in the same industry.
TME's Gross Margin has improved in the last couple of years.

		Industry Rank	Sector Rank
OM	28.82%
PM (TTM)	34.08%
GM	43.9%

OM growth 3Y43.83%

OM growth 5Y10.87%

PM growth 3Y34.13%

PM growth 5Y8.36%

GM growth 3Y12.05%

GM growth 5Y4.42%

More info and screens

ROA

ROE

ROIC

Operating and Profit Margin

Show most profitable peers

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.
The number of shares outstanding for TME has been reduced compared to 1 year ago.
The number of shares outstanding for TME has been reduced compared to 5 years ago.
Compared to 1 year ago, TME has an improved debt to assets ratio.

2.2 Solvency

TME has an Altman-Z score of 6.36. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.36, TME belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
The Debt to FCF ratio of TME is 0.59, which is an excellent value as it means it would take TME, only 0.59 years of fcf income to pay off all of its debts.
TME has a better Debt to FCF ratio (0.59) than 87.50% of its industry peers.
TME has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of TME (0.06) is better than 66.25% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.06
Debt/FCF	0.59
Altman-Z	6.36

ROIC/WACC1.21

WACC8.59%

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 76.25% 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.
With a decent Quick ratio value of 2.09, TME is doing good in the industry, outperforming 76.25% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.09
Quick Ratio	2.09

More info and screens

WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

Show peers with great health

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 36.04% over the past year.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 13.95% in the last year.
Measured over the past years, TME shows a small growth in Revenue. The Revenue has been growing by 2.23% on average per year.

EPS 1Y (TTM)36.04%

EPS 3Y25.91%

EPS 5Y10.88%

EPS Q2Q%32.76%

Revenue 1Y (TTM)13.95%

Revenue growth 3Y-3.13%

Revenue growth 5Y2.23%

Sales Q2Q%20.64%

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 16.91% 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 14.77% on average per year.

EPS Next Y22.58%

EPS Next 2Y18.33%

EPS Next 3Y16.49%

EPS Next 5Y16.91%

Revenue Next Year15.31%

Revenue Next 2Y14.21%

Revenue Next 3Y13.69%

Revenue Next 5Y14.77%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.

More info and screens

Find the best growth stocks

Show best growing peers

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 19.45, the valuation of TME can be described as rather expensive.
81.25% of the companies in the same industry are more expensive than TME, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TME to the average of the S&P500 Index (27.25), we can say TME is valued slightly cheaper.
With a Price/Forward Earnings ratio of 17.11, TME is valued on the expensive side.
86.25% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of TME to the average of the S&P500 Index (25.98), we can say TME is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	19.45
Fwd PE	17.11

4.2 Price Multiples

70.00% of the companies in the same industry are more expensive than TME, based on the Enterprise Value to EBITDA ratio.
87.50% of the companies in the same industry are more expensive than TME, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	17.57
EV/EBITDA	14.44

4.3 Compensation for Growth

TME's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
TME's earnings are expected to grow with 16.49% in the coming years. This may justify a more expensive valuation.

PEG (NY)0.86

PEG (5Y)1.79

EPS Next 2Y18.33%

EPS Next 3Y16.49%

More info and screens

Show best valued peers

5. Dividend

5.1 Amount

TME has a Yearly Dividend Yield of 1.91%. Purely for dividend investing, there may be better candidates out there.
The stock price of TME dropped by -24.19% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 7.58, 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 1.82, TME has a dividend comparable with the average S&P500 company.

		Industry Rank	Sector Rank
Dividend Yield	1.91%

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 2Y18.33%

EPS Next 3Y16.49%

More info and screens

Find the best dividend stocks

Show peers with best dividend

TENCENT MUSIC ENTERTAINM-ADR / TME FAQ

What is the fundamental rating for TME stock?

ChartMill assigns a fundamental rating of 8 / 10 to TME.

What is the valuation status of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?

ChartMill assigns a valuation rating of 7 / 10 to TENCENT MUSIC ENTERTAINM-ADR (TME). This can be considered as Undervalued.

How profitable is TENCENT MUSIC ENTERTAINM-ADR (TME) stock?

TENCENT MUSIC ENTERTAINM-ADR (TME) has a profitability rating of 8 / 10.

What are the PE and PB ratios of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?

The Price/Earnings (PE) ratio for TENCENT MUSIC ENTERTAINM-ADR (TME) is 19.45 and the Price/Book (PB) ratio is 2.67.

What is the expected EPS growth for TENCENT MUSIC ENTERTAINM-ADR (TME) stock?

The Earnings per Share (EPS) of TENCENT MUSIC ENTERTAINM-ADR (TME) is expected to grow by 22.58% in the next year.