u/Select-Solution-4153

The author argues Tencent Music is grossly underpriced because net cash and investments of $8.1 billion against a $13.6 billion market cap leaves the core business at roughly $5.5 billion, or about 1x annual revenue of $5 billion with $1.5 billion in operating cash flow. The mechanism is that this cash generation plus a recent debt offering earmarked partly for share repurchases and a 2.96% dividend yield should narrow the valuation gap to Spotify, which trades at 1/4 to 1/2 higher multiples despite TME's better profit margins. The stated catalyst is management's buyback funding and continued revenue growth, with the main risk being the China domicile and regulatory/jurisdictional discount.