TMETencent Music Entertainment Group
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (1.4×).
Operating profit is fully backed by cash.
Margins have held roughly steady, a stable cost structure.
Margin-driven, fat margins on slower asset turns. ROE 10% = 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 earns 13% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 3.8 points above what the capital costs: growth creates value
- Operating margin
- 31%
Operating margin · Internet Content & Information median 4.9% · fiscal year to FY2024
- Cash conversion
- 1.45×
Cash conversion · 1.40× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −1.2%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2019 | 18% |
| FY2020 | 16% |
| FY2021 | 12% |
| FY2022 | 16% |
| FY2023 | 22% |
| FY2024 | 31% |
Details›
- Gross marginfiscal year to FY2024
- 42%
- Operating marginfiscal year to FY2024
- 31%
- Net marginfiscal year to FY2024
- 23%
- Free cash flow margin
- 35%
- R&D as % of revenue
- 8.0%
- Revenue, trailing twelve months
- $28.4B
- Free cash flow, trailing twelve months
- $9.96B
- Net income, trailing twelve months
- $6.64B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 13%
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 #4 of 31 by RyuScore