CNBC News, July 7. Just two days after Tencent Music Entertainment Group (TME) announced its acquisition of Himalaya on June 12th, the company’s stock saw its market capitalization briefly surpass that of Baidu in Hong Kong trading.
On June 30th, Nasdaq closing data revealed that Tencent Music’s total market value reached $30.188 billion, for the first time exceeding Baidu’s valuation of $29.4 billion.
This pivotal moment is being interpreted as more than just a reshuffling of China’s internet company rankings; it signifies a market re-evaluation of the value proposition between entertainment content and AI technology. When a music streaming platform commands a P/E ratio four times that of a search giant (32x versus 8x), it’s clear the industry winds are shifting.
Tencent Music boasts a substantial user base of 122.9 million paying subscribers, with Average Revenue Per Paying User (ARPPU) climbing to RMB 11.4. Notably, its Super VIP membership revenue experienced a year-over-year increase of 16.6%.
Meanwhile, Baidu, despite holding 140 million self-driving orders and its Ernie Bot attracting 600 million daily calls, finds its P/E ratio at merely a quarter of Tencent Music’s. This is largely attributed to the extended cycle of “technology investment versus commercial return.”
Analysts at Goldman Sachs commented, “Investors are buying into certainty here. Tencent Music’s ‘copyright-to-subscribers-to-revenue’ ecosystem has been proven, while Baidu’s AI narrative still needs more demonstrable real-world applications.”
Furthermore, industry observers suggest that the rise of a niche leader outvaluing a traditional search behemoth signals a deeper restructuring of the internet traffic landscape and a paradigm shift in investment logic.
Tencent Music Entertainment Group, established in 2016, went public on the NYSE in 2018, becoming the first digital music platform from China to list on international capital markets.
Initially leveraging traffic from the broader Tencent ecosystem, it consolidated QQ Music, Kugou Music, and Kuwo Music, creating a dual-engine model powered by “copyright and social entertainment.”
In 2021, the company pivoted to its “Content and Platform, Two Wings” strategy, sharpening its focus on online music services and gradually reducing its reliance on social entertainment revenue streams like live performance tipping.
Fast forward to 2024-2025: With deep integration of AI technology, Tencent Music has surpassed 120 million paying users, with online music revenue now accounting for nearly 80% of the total. This marks a significant evolution from a “traffic platform” to a dedicated “content service provider.”
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