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    How Investors Are Reacting To Tencent Music (TME) Partnering With SM Entertainment On New China JV

    Simply Wall St·08/29/2026 17:18:25
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    • In August 2026, SM Entertainment announced a new joint venture with Tencent Music Entertainment Group called STE, which will focus on launching a Chinese idol group within two to three years and managing promotions for SM’s Greater China artists.
    • This partnership links Tencent Music’s local market reach with SM’s artist IP, potentially strengthening Tencent Music’s role in China’s evolving fan-centric music ecosystem.
    • Next, we’ll examine how this SM-Tencent Music joint venture, especially the planned Chinese idol group, may influence Tencent Music’s investment narrative.

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    Tencent Music Entertainment Group Investment Narrative Recap

    To own Tencent Music today, you need to believe its online music platforms and fan-focused services can keep converting a large user base into paying, engaged fans. The SM-Tencent Music joint venture looks additive to this fan economy push, but in the near term the more immediate swing factors remain competition in social entertainment and the profitability impact of heavier spending on content and marketing. This partnership does not materially change those core catalysts or risks right now.

    Among recent updates, the Q2 2026 results are most relevant in framing this SM deal. Tencent Music grew quarterly revenue to CNY 8,933 million, with net income at CNY 2,471 million, but half-year earnings declined versus last year, partly reflecting large one-off items. Against that backdrop, the STE joint venture sits squarely in the content differentiation and fan monetization bucket, which could matter for how sustainably Tencent Music can balance growth investments with margin preservation.

    Yet even if the SM partnership boosts fan engagement, investors should still pay close attention to Tencent Music’s growing reliance on lower margin offline activities and...

    Read the full narrative on Tencent Music Entertainment Group (it's free!)

    Tencent Music Entertainment Group's narrative projects CN¥43.7 billion revenue and CN¥12.0 billion earnings by 2029. This requires 9.3% yearly revenue growth and an earnings increase of about CN¥3.1 billion from CN¥8.9 billion today.

    Uncover how Tencent Music Entertainment Group's forecasts yield a $14.97 fair value, a 75% upside to its current price.

    Exploring Other Perspectives

    TME 1-Year Stock Price Chart
    TME 1-Year Stock Price Chart

    Some of the lowest estimate analysts paint a sharper contrast, assuming revenue only reaches about CN¥40.7 billion and earnings CN¥10.5 billion by 2029, so before this SM deal they already worried that rising competition and shrinking margins could blunt Tencent Music’s fan economy ambitions.

    Explore 5 other fair value estimates on Tencent Music Entertainment Group - why the stock might be worth over 2x more than the current price!

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.