Shares of Tencent Music Entertainment (NYSE: TME) recently stumbled after the Chinese streaming music giant posted its second-quarter numbers. The headline numbers weren’t too bad: Its revenue rose 31% annually to 5.9 billion RMB ($859 million), topping expectations by $18 million, as its adjusted net profit rose 6% to 1.1 billion RMB ($164 million), or $0.10 per ADS, beating estimates by two cents.

However, Tencent Music’s slowing growth, contracting margins, and murky expansion plans spooked the bulls. Let’s dig deeper into its second-quarter report to see if those concerns are justified.

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The online music business is losing momentum

Tencent Music generated 26% of its revenue from its online music streaming apps (QQ Music, Kugou, and

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