Tencent Music HK shares rally 16% to record high on positive Q2 earnings

Investing.com-- Tencent Music Entertainment Group (HK:1698) (NYSE:TME) rose to a record high in Hong Kong trade on Wednesday after the music streaming firm clocked bumper second-quarter earnings, which also helped push up shares of its parent company.

Tencent Music rose as much as 16% to a record high of HK$104.0, helping underpin a 1.9% rally in the Hang Seng index. Shares of parent Tencent Holdings Ltd (HK:0700) also rose about 3% for the day.

Gains also came amid a broader rally in Chinese tech stocks, which tracked an overnight surge in their U.S. peers.

Tencent Music clocked stronger-than-expected earnings for the June quarter, with EPS at 1.55 yuan, above expectations of 1.42 yuan. Revenue also rose 18% to 8.44 billion yuan, ahead of expectations of 7.97 billion yuan.

The Chinese streaming company benefited from strong subscriber growth as a larger content library attracted more user engagement. Its music-related services, such as advertising, concerts, and merchandise, also helped diversify its offerings.

Tencent Music had agreed to buy Chinese audio streaming platform Ximalaya in June for about $2.4 billion, aimed at largely increasing its catalogue and drawing in more users.

Tencent Music, which was publicly spun off from Tencent in 2018, has over 15 million subscribers.