China’s Tencent Music will pursue a secondary listing of its shares on the Hong Kong Stock Exchange, the company said on Monday after reporting a 15% drop in revenue at its main social entertainment services business.
While most Tencent Music users are in its music streaming unit, social entertainment services including karaoke platforms where people can live stream concerts and shows are its biggest revenue drivers.
Revenue from social entertainment services and others fell 15.2% to 4.73 billion yuan ($742 million), while paying users in the social entertainment category declined 16.7%.
Executive Chairman Qiang Pang said in a statement on Monday that the weakness was due to stiff competition from rivals and the changing macro environment.
According to analysts, the resumption of in-person events in the quarter was expected to impact the company’s results after the Covid-19 subsidence in the country.
The results come against a backdrop of China’s swift regulatory crackdown on local tech firms and threats of US penalties if Beijing supports Moscow in its invasion of Ukraine.
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In a bright spot, Tencent Music’s online music services business posted revenue growth of 4.3%. According to Refinitiv data, the total revenue of the Tencent Holdings-controlled company fell 8.7% to 7.61 billion yuan, in line with market estimates.