Exhibit 99.1
TENCENT MUSIC ENTERTAINMENT GROUP
Unaudited Condensed Consolidated Interim Financial Information for the Six Months Ended June 30, 2025 and 2026
 
    
Page
  
    
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED INCOME STATEMENTS
 
           
Six months ended June 30,
  
           
2025
    
2026
  
           
(Unaudited)
    
(Unaudited)
  
    
Note
     
RMB’million
    
RMB’million
  
Revenue from music related services*
         12,658       14,119  
Revenue from social entertainment services and others
         3,140       2,709  
     
 
 
    
 
 
  
Total revenues
      8        15,798       16,828  
Cost of revenues
         (8,807 )      (9,333 ) 
Gross profit
         6,991       7,495  
Selling and marketing expenses
         (415 )      (507 ) 
General and administrative expenses
         (1,884 )      (1,999 ) 
     
 
 
    
 
 
  
Total operating expenses
         (2,299 )      (2,506 ) 
Interest income
         551       475  
Other gains, net
      9        2,571       218  
Operating profit
         7,814       5,682  
Share of net profit of investments accounted for using equity method
      14        39       30  
Finance costs
         (37 )      (51 ) 
     
 
 
    
 
 
  
Profit before income tax
         7,816       5,661  
Income tax expense
      11        (961 )      (971 ) 
     
 
 
    
 
 
  
Profit for the period
         6,855       4,690  
             
 
 
    
 
 
  
Attributable to:
        
Equity holders of the Company
         6,700       4,562  
Non-controlling
interests
         155       128  
     
 
 
    
 
 
  
        6,855       4,690  
             
 
 
    
 
 
  
           
RMB
    
RMB
  
Earnings per share for Class A and Class B ordinary shares
      12       
Basic
         2.19       1.47  
Diluted
         2.16       1.46  
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings per ADS (2 Class A shares equal to 1 ADS)
        
Basic
         4.38       2.94  
Diluted
         4.32       2.91  
The accompanying notes are an integral part of this condensed consolidated interim financial information.
 
*
Starting from the first quarter of 2026, “online music services” has been renamed to “music related services” to better reflect the nature of the businesses, including long-form audio. Such change does not affect the amounts of historical revenue or its accounting treatment.
 
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
    
Six months ended June 30,
  
    
2025
    
2026
  
    
(Unaudited)
    
(Unaudited)
  
    
RMB’million
    
RMB’million
  
Profit for the period
      6,855       4,690  
Other comprehensive income, net of tax:
     
Items that will not be reclassified subsequently to profit or loss
     
Fair value changes on financial assets at fair value through other comprehensive income
      11,610       (5,440 ) 
Currency translation differences
      (97 )      (552 ) 
Items that may be subsequently reclassified to profit or loss
             
Currency translation differences
      (40 )      (546 ) 
Share of other comprehensive (loss)/income of associates
      (38 )      1  
  
 
 
    
 
 
  
Total comprehensive income for the period
      18,290       (1,847 ) 
 
   
 
 
    
 
 
  
Attributable to:
     
Equity holders of the Company
      18,135       (1,968 ) 
Non-controlling
interests
      155       121  
  
 
 
    
 
 
  
  
 
18,290
 
 
 
(1,847
) 
  
 
 
    
 
 
  
The accompanying notes are an integral part of this condensed consolidated interim financial information.
 
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
  
 
 
  
December 31,
 
 
June 30,
 
 
  
 
 
  
2025
 
 
2026
 
 
  
 
 
  
(Audited)
 
 
(Unaudited)
 
 
  
Note
 
  
RMB’million
 
 
RMB’million
 
ASSETS
  
  
 
Non-current
assets
  
  
 
Property, plant and equipment
  
 
13
 
  
 
1,201
 
 
 
1,540
 
Land use rights
  
 
13
 
  
 
2,290
 
 
 
2,254
 
Right-of-use
assets
  
 
13
 
  
 
287
 
 
 
322
 
Intangible assets
  
 
13
 
  
 
2,899
 
 
 
5,895
 
Goodwill
  
 
13
 
  
 
20,521
 
 
 
29,757
 
Investments accounted for using equity method
  
 
14
 
  
 
1,659
 
 
 
2,691
 
Financial assets at fair value through other comprehensive income
  
 
15
 
  
 
26,231
 
 
 
19,147
 
Other investments
  
 
15
 
  
 
303
 
 
 
934
 
Prepayments, deposits and other assets
  
 
16
 
  
 
365
 
 
 
445
 
Deferred tax assets
  
  
 
498
 
 
 
633
 
Term deposits
  
 
17
 
  
 
13,810
 
 
 
13,640
 
  
  
 
 
 
 
 
 
 
  
  
 
70,064
 
 
 
77,258
 
  
  
 
 
 
 
 
 
 
Current assets
  
  
 
Inventories
  
  
 
41
 
 
 
98
 
Accounts receivable
  
  
 
3,903
 
 
 
4,184
 
Prepayments, deposits and other assets
  
 
16
 
  
 
4,183
 
 
 
4,745
 
Other investments
  
 
15
 
  
 
83
 
 
 
72
 
Short-term investments
  
 
15
 
  
 
— 
 
 
 
123
 
Term deposits
  
 
17
 
  
 
15,763
 
 
 
6,761
 
Restricted cash
  
 
17
 
  
 
15
 
 
 
8
 
Cash and cash equivalents
  
 
17
 
  
 
8,470
 
 
 
23,698
 
  
  
 
 
 
 
 
 
 
  
  
 
32,458
 
 
 
39,689
 
  
  
 
 
 
 
 
 
 
Total assets
  
  
 
102,522
 
 
 
116,947
 
  
  
 
 
 
 
 
 
 
EQUITY
  
  
 
Equity attributable to equity holders of the Company
  
  
 
Share capital
  
 
18
 
  
 
2
 
 
 
2
 
Additional
paid-in
capital
  
 
18
 
  
 
29,919
 
 
 
34,933
 
Shares held for share award schemes
  
 
18
 
  
 
(801
) 
 
 
(870
) 
Treasury shares
  
 
18
 
  
 
(664
) 
 
 
(3,389
) 
Other reserves
  
 
19
 
  
 
22,450
 
 
 
16,478
 
Retained earnings
  
  
 
29,381
 
 
 
31,118
 
  
  
 
 
 
 
 
 
 
  
  
 
80,287
 
 
 
78,272
 
Non-controlling
interests
  
  
 
2,763
 
 
 
2,801
 
  
  
 
 
 
 
 
 
 
Total equity
  
  
 
83,050
 
 
 
81,073
 
  
  
 
 
 
 
 
 
 
LIABILITIES
  
  
 
Non-current
liabilities
  
  
 
Borrowings
  
 
21
 
  
 
— 
 
 
 
7,142
 
Notes payable
  
 
22
 
  
 
3,497
 
 
 
3,390
 
Other payables and other liabilities
  
 
23
 
  
 
379
 
 
 
468
 
Deferred tax liabilities
  
  
 
504
 
 
 
1,462
 
Lease liabilities
  
  
 
200
 
 
 
218
 
Deferred revenue
  
 
24
 
  
 
303
 
 
 
447
 
  
  
 
 
 
 
 
 
 
  
  
 
4,883
 
 
 
13,127
 
  
  
 
 
 
 
 
 
 
Current liabilities
  
  
 
Accounts payable
  
  
 
6,284
 
 
 
6,716
 
Other payables and other liabilities
  
 
23
 
  
 
3,558
 
 
 
4,451
 
Borrowings
  
 
21
 
  
 
— 
 
 
 
5,997
 
Current tax liabilities
  
  
 
1,092
 
 
 
999
 
Lease liabilities
  
  
 
116
 
 
 
137
 
Deferred revenue
  
 
24
 
  
 
3,539
 
 
 
4,447
 
  
  
 
 
 
 
 
 
 
  
  
 
14,589
 
 
 
22,747
 
  
  
 
 
 
 
 
 
 
Total liabilities
  
  
 
19,472
 
 
 
35,874
 
  
  
 
 
 
 
 
 
 
Total equity and liabilities
  
  
 
102,522
 
 
 
116,947
 
  
  
 
 
 
 
 
 
 
The accompanying notes are an integral part of this condensed consolidated interim financial information.
 
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
 
           
Attributable to equity holders of the Company
              
           
Share
capital
     
Additional
paid-in
capital
     
Shares held
for share
award
schemes
    
Treasury
shares
    
Other
reserves
    
Retained
earnings
    
Total
    
Non-
controlling
interests
    
Total
equity
  
    
Note
     
RMB’million
     
RMB’million
     
RMB’million
    
RMB’million
    
RMB’million
    
RMB’million
    
RMB’million
    
RMB’million
    
RMB’million
  
(Unaudited)
                        
Balance at January 1, 2025
         2        29,035        (520 )      (550 )      19,845       20,051       67,863       1,863       69,726  
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Profit for the period
         —         —         —        —        —        6,700       6,700       155       6,855  
Fair value changes on financial assets at fair value through other comprehensive income
         —         —         —        —        11,610       —        11,610       —        11,610  
Share of other comprehensive loss of associates
         —         —         —        —        (38 )      —        (38 )      —        (38 ) 
Currency translation differences
         —         —         —        —        (137 )      —        (137 )      —        (137 ) 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total comprehensive income for the period
         —         —         —        —        11,435       6,700       18,135       155       18,290  
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Transactions with equity holders:
                        
Exercise of share options/ RSUs
      18,19        —         428        —        73       (224 )      —        277       —        277  
Share-based compensation - value of employee services
      19,20        —         —         —        —        297       —        297       —        297  
Shares held for share award schemes
      18        —         —         (25 )      —        —        —        (25 )      —        (25 ) 
Repurchase of shares
         —         —         —        (462 )      —        —        (462 )      —        (462 ) 
Dividends to the Company’s shareholders
         —         —         —        —        —        (1,974 )      (1,974 )      —        (1,974 ) 
Non-controlling
interests arising from business combination
         —         —         —        —        —        —        —        518       518  
Dividends to
non-controlling
interests
         —         —         —        —        —        —        —        (39 )      (39 ) 
Deemed disposal
         —         —         —        —        (147 )      259       112       —        112  
Recognition of financial liabilities in respect of the put option from business combination
         —         —         —        —        (345 )      —        (345 )      —        (345 ) 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total transactions with equity holders at their capacity as equity holders for the period
         —         428        (25 )      (389 )      (419 )      (1,715 )      (2,120 )      479       (1,641 ) 
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Balance at June 30, 2025
         2        29,463        (545 )      (939 )      30,861       25,036       83,878       2,497       86,375  
     
 
 
     
 
 
     
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
 
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
 
 
 
 
 
 
Attributable to equity holders of the Company
 
 
 
 
 
 
 
 
 
 
 
 
Share
capital
 
 
Additional
paid-in
capital
 
 
Shares held
for share
award
schemes
 
 
Treasury
shares
 
 
Other
reserves
 
 
Retained
earnings
 
 
Total
 
 
Non-
controlling
interests
 
 
Total
equity
 
 
 
Note
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
 
RMB’million
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2026
 
 
 
2
 
 
 
29,919
 
 
 
(801
) 
 
 
(664
) 
 
 
22,450
 
 
 
29,381
 
 
 
80,287
 
 
 
2,763
 
 
 
83,050
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit for the period
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
4,562
 
 
 
4,562
 
 
 
128
 
 
 
4,690
 
Fair value changes on financial assets at fair value through other comprehensive income
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(5,440
) 
 
 
— 
 
 
 
(5,440
) 
 
 
— 
 
 
 
(5,440
) 
Share of other comprehensive income of associates
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
1
 
 
 
— 
 
 
 
1
 
 
 
— 
 
 
 
1
 
Currency translation differences
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(1,091
) 
 
 
— 
 
 
 
(1,091
) 
 
 
(7
) 
 
 
(1,098
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income for the period
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(6,530
) 
 
 
4,562
 
 
 
(1,968
) 
 
 
121
 
 
 
(1,847
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transactions with equity holders:
 
 
 
 
 
 
 
 
 
 
Exercise of share options/ RSUs
 
 
18,19
 
 
 
— 
 
 
 
120
 
 
 
— 
 
 
 
— 
 
 
 
(116
) 
 
 
— 
 
 
 
4
 
 
 
— 
 
 
 
4
 
Share-based compensation - value of employee services
 
 
19,20
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
339
 
 
 
— 
 
 
 
339
 
 
 
— 
 
 
 
339
 
Shares held for share award schemes
 
 
18
 
 
 
— 
 
 
 
— 
 
 
 
(69
) 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(69
) 
 
 
— 
 
 
 
(69
) 
Repurchase of shares
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(2,725
) 
 
 
— 
 
 
 
— 
 
 
 
(2,725
) 
 
 
— 
 
 
 
(2,725
) 
Dividends to the Company’s shareholders
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(2,560
) 
 
 
(2,560
) 
 
 
— 
 
 
 
(2,560
) 
Acquisition of Ximalaya
 
 
18, 19, 25
 
 
— 
 
 
 
4,894
 
 
 
— 
 
 
 
— 
 
 
 
120
 
 
 
— 
 
 
 
5,014
 
 
 
(28
) 
 
 
4,986
 
Non-controlling
interests arising from business combination
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
26
 
 
 
26
 
Dividends to
non-controlling
interests
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(46
) 
 
 
(46
) 
Transfer of losses on deemed disposal of financial instruments to retained earnings
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
265
 
 
 
(265
) 
 
 
— 
 
 
 
— 
 
 
 
— 
 
Recognition and fair value change of financial liabilities in respect of the put option from business combination
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(68
) 
 
 
— 
 
 
 
(68
) 
 
 
— 
 
 
 
(68
) 
Transactions with minority interest
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
18
 
 
 
— 
 
 
 
18
 
 
 
(27
) 
 
 
(9
) 
Disposal of
non-wholly
owned subsidiary
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(8
) 
 
 
(8
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total transactions with equity holders at their capacity as equity holders for the period
 
 
 
— 
 
 
 
5,014
 
 
 
(69
) 
 
 
(2,725
) 
 
 
558
 
 
 
(2,825
) 
 
 
(47
) 
 
 
(83
) 
 
 
(130
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2026
 
 
 
2
 
 
 
34,933
 
 
 
(870
) 
 
 
(3,389
) 
 
 
16,478
 
 
 
31,118
 
 
 
78,272
 
 
 
2,801
 
 
 
81,073
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of this condensed consolidated interim financial information.
 
F-6
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
  
 
 
  
Six months ended June 30,
 
 
  
 
 
  
2025
 
 
2026
 
 
  
 
 
  
(Unaudited)
 
 
(Unaudited)
 
 
  
Note
 
  
RMB’million
 
 
RMB’million
 
Cash flows from operating activities
  
  
 
Cash generated from operations
  
  
 
4,477
 
 
 
4,977
 
Interest received
  
  
 
597
 
 
 
606
 
Income taxes paid
  
  
 
(917
) 
 
 
(387
) 
  
  
 
 
 
 
 
 
 
Net cash inflow from operating activities
  
  
 
4,157
 
 
 
5,196
 
  
  
 
 
 
 
 
 
 
Cash flows from investing activities
  
  
 
Net cash payment for business combinations
  
  
 
(1,053
) 
 
 
(7,415
) 
Purchase of property, plant and equipment
  
  
 
(131
) 
 
 
(193
) 
Purchase of intangible assets
  
  
 
(427
) 
 
 
(239
) 
Placement of short-term investments
  
 
15
 
  
 
(2,300
) 
 
 
(4,012
) 
Receipt from short-term investments
  
 
15
 
  
 
2,339
 
 
 
4,880
 
Placement of term deposits with initial terms of over three months
  
  
 
(5,706
) 
 
 
(6,102
) 
Receipt from maturity of term deposits with initial terms of over three months
  
  
 
6,189
 
 
 
16,102
 
Proceeds from disposal of investments accounted for using equity method
  
  
 
32
 
 
 
4
 
Payments for acquisition of investments accounted for using equity method
  
  
 
(1,819
) 
 
 
(70
) 
Proceeds from disposal of investments accounted for as financial assets at fair value through profit or loss
  
  
 
— 
 
 
 
12
 
Payments for acquisition of investments accounted for as financial assets at fair value through profit or loss
  
  
 
(3
) 
 
 
(229
) 
Payments for acquisition of investments accounted for as financial assets at fair value through other comprehensive income
  
  
 
(1,230
) 
 
 
— 
 
Payments for loan to third parties
  
  
 
(2
) 
 
 
— 
 
Dividends received
  
  
 
252
 
 
 
198
 
Other investing activities
  
  
 
5
 
 
 
(4
) 
  
  
 
 
 
 
 
 
 
Net cash (outflow)/inflow from investing activities
  
  
 
(3,854
) 
 
 
2,932
 
  
  
 
 
 
 
 
 
 
Cash flows from financing activities
  
  
 
Proceeds from short-term borrowings
  
  
 
— 
 
 
 
5,770
 
Repayments of short-term borrowings
  
  
 
— 
 
 
 
(55
) 
Proceeds from long-term borrowings
  
  
 
— 
 
 
 
7,000
 
Proceeds from exercise of share options
  
  
 
57
 
 
 
4
 
Payments for acquisition of
non-controlling
interests in
non-wholly
owned subsidiaries
  
  
 
— 
 
 
 
(9
) 
Shares withheld for share award schemes
  
  
 
(24
) 
 
 
(23
) 
Payments for repurchase of ordinary shares
  
  
 
(391
) 
 
 
(2,725
) 
Dividends paid to the Company’s shareholders
  
  
 
(1,981
) 
 
 
(2,539
) 
Dividends paid to
non-controlling
interests
  
  
 
(39
) 
 
 
(41
) 
Payments for interests
  
  
 
(58
) 
 
 
(48
) 
Principal elements of lease payments
  
  
 
(76
) 
 
 
(61
) 
  
  
 
 
 
 
 
 
 
Net cash (outflow)/inflow from financing activities
  
  
 
(2,512
) 
 
 
7,273
 
  
  
 
 
 
 
 
 
 
Net (decrease)/increase in cash and cash equivalents
  
  
 
(2,209
) 
 
 
15,401
 
Cash and cash equivalents at beginning of the period
  
  
 
13,164
 
 
 
8,470
 
Exchange differences on cash and cash equivalents
  
  
 
44
 
 
 
(173
) 
  
  
 
 
 
 
 
 
 
Cash and cash equivalents at end of the period
  
  
 
10,999
 
 
 
23,698
 
  
  
 
 
 
 
 
 
 
The accompanying notes are an integral part of condensed consolidated interim financial information.
 
F-7
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
1.
General information and organization
 
1.1.
General information
Tencent Music Entertainment Group (the “Company” or “TME”), formerly known as China Music Corporation (“CMC”), was incorporated under the laws of the Cayman Islands on June 6, 2012 as an exempted company with limited liability under the Companies Law (2010 Revision) of the Cayman Islands. The registered office in the Cayman Islands is located at the office of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman,
KY1-1104,
Cayman Islands. The Company is controlled by Tencent Holdings Limited (“Tencent”), a company incorporated in the Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”). The Company’s American Depositary Shares (“ADSs”) have been listed on the New York Stock Exchange since December 12, 2018. The Company’s Class A ordinary shares have been listed, by way of introduction, on the Hong Kong Stock Exchange since September 15, 2022. Each ADS of the Company represents two ordinary shares, remain primarily listed and traded on the New York Stock Exchange(“NYSE”). The Class A ordinary shares listed on the Main Board of the Hong Kong Stock Exchange are fully fungible with the ADSs listed on the NYSE.
The Company, its subsidiaries, its controlled structured entities (“Variable interest entities”, or “VIE”) and their subsidiaries (“Subsidiaries of VIEs”) are collectively referred to as the “Group”. The Group is principally engaged in operating all-in-one music and audio platforms to provide music streaming, offline concerts, artist merchandise and other IP-centric experiences in the People’s Republic of China (“PRC”). The Company does not conduct any substantive operations of its own but conducts its primary business operations through its wholly-owned subsidiaries, VIEs and subsidiaries of VIEs in the PRC.
In July 2016, Tencent acquired control of the Company through a series of transactions, pursuant to which Tencent injected substantially all of its online music business in the Mainland China (“Tencent Music Business”) into the Company in exchange for certain number of shares issued by the Company (“Merger”). Upon the completion of such transactions, the Company became a subsidiary of Tencent and was renamed to its current name in December 2016. The Merger was accounted for as a reverse acquisition under which Tencent Music Business is regarded as the acquirer, and accordingly this Interim Financial Information have been presented as a continuation of the financial statements of Tencent Music Business.
The condensed consolidated interim financial information comprises the consolidated balance sheet as at June 30, 2026, the related condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the six months then ended, and a summary of significant accounting policies and other explanatory notes (the “Interim Financial Information”). The Interim Financial Information is presented in Renminbi (“RMB”), unless otherwise stated. The Interim Financial Information has not been audited.
 
1.2.
Significant events and transactions in the current reporting period
The Group completed the acquisition of entire equity interest of Ximalaya Inc. (“Ximalaya”) on May 18, 2026. Please refer to Note 25 Business Combinations for further details.
 
2.
Basis of preparation and presentation
This Interim Financial Information for the sixth-month reporting period ended June 30, 2026 has been prepared in accordance with International Accounting Standard 34 (“IAS 34”) ‘Interim Financial Reporting’ issued by the International Accounting Standards Board (‘IASB’) and should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2025 (“2025 Financial Statements”) , which have been prepared in accordance with International Financial Reporting Standards as issued by ISAB (“IFRS Accounting Standards as issued by IASB”).
 
3.
Significant accounting policies
Except as described below, the accounting policies and method of computation used in the preparation of the Interim Financial Information are consistent with those used in the 2025 Financial Statements, which have been prepared in accordance with IFRS Accounting Standards as issued by IASB under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income, which are carried at fair value.
 
F-8
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
Taxes on income for the interim period are accrued using the tax rates that would be applicable to expected total annual assessable profit.
 
 
(a)
New and amendments to the accounting standards adopted
The following amendments and improvements to standards have been adopted by the Group for the first time for the financial year beginning on January 1, 2026:
 
Amendments to IFRS 9 and IFRS 7
  
Amendments to the Classification and Measurement of Financial Instruments
Amendments to IFRS 9 and IFRS 7
  
Contracts Referencing Nature-dependent Electricity
Annual Improvements to IFRS Accounting Standards
  
Annual Improvements to IFRS Accounting Standards - Volume 11
The adoption of the above does not have material impact on the Interim Financial Information of the Group.
 
 
(b)
Recent accounting pronouncements
Certain amendments to accounting standards and interpretation have been published that are not mandatory for June 30, 2026 reporting periods and have not been early adopted by the Group. As at the date of approval of this Interim Financial Information, the Group is still in the process of assessing the effects of adopting IFRS 18, IFRS 19 and these amendments and improvements to IFRS Accounting Standards. The Group will continue to assess the effects of these new and amended standards.
 
 
  
 
  
Effective for annual
periods beginning
on or after
IFRS 18
  
Presentation and Disclosure in Financial Statements
  
January 1, 2027
IFRS 19
  
Subsidiaries without Public Accountability: Disclosures
  
January 1, 2027
Amendments to IFRS 19
  
Subsidiaries without Public Accountability: Disclosures
  
January 1, 2027
Amendments to IAS 21
  
Translation to a Hyperinflationary Presentation Currency
  
January 1, 2027
Amendments to IAS 36, IFRS 18,
IAS 1, IAS 37, IAS 8, IFRS 7
  
Disclosures about Uncertainties in the Financial Statements - Illustrative examples
  
January 1, 2027
IFRS 20
  
Regulatory Assets and Regulatory-Liabilities
  
January 1, 2029
 
4.
Consolidation of VIEs
PRC laws and regulations prohibit or restrict foreign ownership of companies that provide Internet-based business, which include activities and services provided by the Group. The Group operates its business operations in the PRC through a series of contractual arrangements (“Structure Contracts”) entered into among the Company, its wholly-owned subsidiaries of the Company (“WOFEs”), domestic entities (“Operating Entities”) that legally owned by individuals (“Nominee Shareholders”) authorized by the Group (collectively, “Contractual Arrangements”). Under the Contractual Arrangements, the Company has the power to control the management, and financial and operating policies of the Operating Entities, has exposure or rights to variable returns from its involvement with the Operating Entities, and has the ability to use its power over the Operating Entities to affect the amount of the returns. As a result, all these Operating Entities are regarded as VIEs that accounted for as consolidated structured entities of the Company and their financial statements have been consolidated by the Company. There were no material changes in any basis of consolidation of VIEs under Contractual Arrangements during the six months ended June 30, 2026 from the preceding financial year.
 
5.
Estimates
The preparation of the Interim Financial Information requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the Interim Financial Information, the nature of significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were consistent with those described in the 2025 Financial Statements.
 
F-9
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
6.
Financial risk management
 
 
(a)
Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk.
The Interim Financial Information does not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the 2025 Financial Statements.
There were no changes in any material risk management policies during the six months ended June 30, 2026.
 
 
(b)
Capital risk management
The Group’s objectives on managing capital are to safeguard the Group’s ability to continue as a going concern and support the sustainable growth of the Group in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders’ value in the long term.
Capital refers to equity and external debts (including borrowings and notes payable). In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
As at December 31, 2025 and June 30, 2026, the directors of the Company considers the risk of the Group’s capital structure is remote as the Group has a net cash position.
 
 
(c)
Fair value estimation
The table below analyzes the Group’s financial instruments carried at fair value as at June 30, 2026 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:
 
  •  
Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
 
  •  
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
 
  •  
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
As at June 30, 2026, the Group’s financial instruments carried at fair value comprised financial assets at fair value through other comprehensive income (Note 15) stated in the consolidated balance sheets measured at level 1 hierarchy with amount of RMB19,131 million (as at December 31, 2025: RMB26,217 million) and measured at level 3 hierarchy with amount of RMB16 million (as at December 31, 2025: RMB14 million), while other investments (Note 15) and short-term investment
(Note 15)
at level 3 fair value hierarchy with amount of RMB1,006 million (as at December 31, 2025: RMB386 million) and RMB123 million (as at December 31, 2025: nil), respectively.
The fair value of financial instruments traded in active markets is determined with reference to quoted market prices at the end of the reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price already incorporates the market’s assumptions with respect to changes in economic climate such as rising interest rates and inflation, as well as changes due to ESG risk. These instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required for evaluating the fair value of a financial instrument are observable, the instrument is included in level 2. If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3.
 
F-10
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
The Group has a team of personnel who performs valuation on these level 3 instruments for financial reporting purposes. The team adopts various valuation techniques to determine the fair value of the Group’s level 3 instruments. External valuation experts may also be involved and consulted when it is necessary.
The components of the level 3 instruments mainly include investments in unlisted companies classified as other investments. As these instruments are not traded in an active market, their fair value have been determined using various applicable valuation techniques, including discounted cash flows approach and comparable transactions approach, etc.
During the six months ended June 30, 2025 and 2026, there was no transfer between level 1, 2 and 3 for recurring fair value measurements.
 
7.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments and making strategic decisions. The Group’s chief operating decision makers have been identified as executive directors of the Company, who review the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group as a whole.
For the purpose of internal reporting and management’s operation review, the chief operating decision-makers and management personnel do not segregate the Group’s business by product or service lines. Hence, the Group has only one operating segment. In addition, the Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group’s assets and liabilities are substantially located in the PRC, substantially all revenues are earned and substantially all expenses are incurred in the PRC, no geographical segments are presented.
 
8.
Revenue
 
    
Six months ended June 30,
  
    
2025
     
2026
  
Revenues from music related services
  
RMB’million
 
  
RMB’million
 
Membership services (note i)
      8,718        9,360  
Marketing and consumption services (note ii)
      3,940        4,759  
  
 
 
     
 
 
  
    
12,658
 
  
 
14,119
  
  
 
 
     
 
 
  
Note i: As part of music related services, membership services primarily consist of membership fees paid for membership benefits and privileges, including access to music and audio content, and other benefits and privileges within music related services, majority of which were recognized over time.
Note ii: As part of music related services, marketing and consumption services primarily consist of advertising, offline performance related services and artist-related merchandise sales.
Among the total revenue for
 
the six months ended June 30, 2025 and 2026, revenue contributed by advertising services amounted to RMB
2,348
 million and RMB
2,524
 million, respectively.
During the six months ended June 30, 2025 and 2026, the majority of the revenue from music related services are recognized over time and the majority of the revenue from social entertainment services are recognized at a point in time.
The Group does not disclose the information about the remaining performance obligation as the majority of the performance obligations of the Group have an expected duration of one year or less.
Details of contract liabilities were disclosed in Note 24.
 
F-11
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
9.
Other gains, net
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Gain on deemed disposal (note i)
      2,373        —  
Dividends from investments
      92        107  
Government grants and tax rebates (note ii)
      20        53  
Fair value changes of consideration liabilities related to acquisition (note 25)
      —        28  
Fair value change of investments
      39        11  
Net gains in relation to equity investments
      3        2  
Others (note iii)
      44        17  
  
 
 
     
 
 
  
     2,571        218  
  
 
 
     
 
 
  
Note i: As at December 31, 2024, the Group held 10% equity interest in a consortium led by Tencent and the consortium held 20% equity interest in Universal Music Group(“UMG”). With the Group’s ability to exercise significance influence on the consortium, the Group accounted for the investment as investments accounted for using equity method. In March 2025, the consortium completed a transfer of the UMG shares held by the consortium to its members through
distribution-in-kind.
Following the distribution, the Group held directly 2% equity interests in UMG and the Group designated the investment as financial assets at fair value through other comprehensive income. The gain with amount of RMB2,373 million on deemed disposal of investment accounted for using equity method was recognized during the six months ended June 30, 2025.
Note ii: There are no unfulfilled conditions or contingencies related to these subsidies.
Note iii: During the six months ended June 30, 2025 and 2026, sharing of ADS service fee with amount of RMB34 million and RMB30 million, respectively, were included in others.
 
10.
Expenses by nature
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Service costs (note i)
      5,720        5,610  
Advertising agency fees
      603        581  
Employee benefits expenses (note ii)
      1,995        2,198  
Promotion and advertising expenses
      287        355  
Notes:
 
  (i)
Service costs mainly comprised content costs of royalties, revenue sharing fees paid to content creators and content delivery costs that primarily consisted of server, cloud services and bandwidth costs.
 
  (ii)
During the six months ended June 30, 2025 and 2026, the Group incurred expenses for the purpose of research and development of approximately RMB1,140 million and RMB1,180 million, which comprised employee benefits expenses of RMB1,055 million and RMB1,094 million, respectively. No material development expenses had been capitalized for the six months ended June 30, 2025 and 2026.
 
F-12
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
11.
Taxation
 
 
(a)
Income tax expense
Income tax expense is recognized based on management’s best knowledge of the income tax rates expected for the financial year.
 
  (i)
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.
 
  (ii)
Hong Kong
Under the current tax laws of Hong Kong, TME Hong Kong is subject to Hong Kong profits tax at 16.5% on its taxable income generated from the operations in Hong Kong. Dividends from TME Hong Kong is not subject to Hong Kong profits tax.
 
  (iii)
PRC
Under the Corporate Income Tax (“CIT”) Law in the PRC, foreign invested enterprises and domestic enterprises are subject to a unified CIT rate of 25%, except for available preferential tax treatments, including tax concession for enterprise approved as “High and New Technology Enterprise” (“HNTE”) and enterprise established in certain special economic development zones. Qualified HNTE is eligible for a preferential tax rate of 15%.
During the six months ended June 30, 2025 and 2026, certain subsidiaries of the Group have been recognized as HNTE by relevant government authorities and were eligible for a preferential tax rate
of 15%.
Certain subsidiaries of the Group are entitled to other tax concessions, mainly including the preferential tax rate
of 15%
applicable to some subsidiaries located in certain areas of PRC upon fulfillment of certain requirements of the respective local government. 
Furthermore, certain subsidiaries of the Group are subject to other preferential tax treatment for certain reduced tax rates ranging from 5% to 9%.
 
  (iv)
Withholding tax
Under the current CIT Law, dividends for earnings derived from January 1, 2008 and onwards paid by PRC entities to any of their foreign
non-resident
enterprise investors are subject to a 10% withholding tax. A lower tax rate will be applied if tax treaty or arrangement benefits are available. Under the tax arrangement between the PRC and Hong Kong, the reduced withholding tax rate for dividends paid by PRC entities is 5% provided the Hong Kong investors meet the requirements as stipulated by relevant PRC tax regulations, such as the beneficiary owner test.
 
  (v)
OECD Pillar Two model rules
The OECD published Pillar Two model rules in December 2021, with the effect that a jurisdiction may enact domestic tax laws (“Pillar Two legislation”) to implement the Pillar Two model rules on a globally agreed common approach. A Pillar Two legislation applies to a member of a multinational group within the scope of the Pillar Two model rules (i.e., a multinational Group that has annual revenue of EUR 750 million or more in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year), which the Group’s ultimate holding company Tencent is reasonably expected to fall into. As a partially owned parent entity (“POPE”) of Tencent, it imposes a
top-up
tax on Group’s profits arising in a jurisdiction whenever the effective tax rate determined by the Pillar Two model rules on a jurisdictional basis is below a minimum rate of 15%.
 
F-13
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
As at June 30, 2026, the Group mainly operated in Chinese Mainland and Hong Kong. Pillar Two legislation has been effective in Hong Kong since January 1, 2025 and the current tax exposure for the six months ended June 30, 2026 is immaterial. While Pillar Two legislation is not yet enacted or substantively enacted in Chinese Mainland as at June 30, 2026, it is estimated that the Group’s income tax would not be materially different had such legislation been in effect for the six months ended June 30, 2026. The Group will continue assessing the Pillar Two tax exposure and the impacts on its consolidated financial statements accordingly. Regarding deferred income tax accounting, the Group has applied the exception to recognizing and disclosing deferred income tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 issued in May 2023.
The income tax expense of the Group is analyzed as follows:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Current income tax
      718        927  
Deferred income tax
      243        44  
  
 
 
     
 
 
  
Total income tax expense
      961        971  
  
 
 
     
 
 
  
 
12.
Earnings per share
 
 
(a)
Basic earnings per share
Basic earnings per share (“EPS”) is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.
 
 
(b)
Diluted earnings per share
For the calculation of diluted earnings per share, weighted average number of ordinary shares outstanding is adjusted by the effect of dilutive securities, including share-based awards in respect of share options and RSU, under the treasury stock method (collectively forming the denominator for computing the diluted earnings per share). Potentially dilutive securities, including share options and RSU, have been excluded from the computation of weighted average number of ordinary shares for the purpose of diluted earnings per share if their inclusion is anti-dilutive. No adjustments is made to earnings (numerator).
 
F-14
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
The following table sets forth the computation of basic and diluted earnings per share:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Earnings
      
Net profit attributable to equity holders of the Company
  
 
6,700
 
  
 
4,562
 
  
 
 
     
 
 
  
    
Number of shares
  
    
Six months ended June 30,
  
    
2025
     
2026
  
Shares
      
Weighted average ordinary shares outstanding, used in computing basic earnings per share
     
3,057,167,291
 
  
 
3,104,964,331
  
Dilution effect- adjustments for share options and RSUs
     
41,364,651
 
  
 
27,428,065
  
  
 
 
     
 
 
  
Shares used in computing diluted earnings per share
     
3,098,531,942
 
  
 
3,132,392,396
  
    
RMB
     
RMB
  
Basic earnings per share for Class A and Class B ordinary shares
     
2.19
 
  
 
1.47
  
Diluted earnings per share for Class A and Class B ordinary shares
     
2.16
 
  
 
1.46
  
Basic earnings per ADS
     
4.38
 
  
 
2.94
  
Diluted earnings per ADS
     
4.32
 
  
 
2.91
  
Note: One ADS represents two Class A ordinary shares of the Company.
For the six months ended June 30, 2025 and 2026, certain share options and certain RSUs that were anti-dilutive and being excluded from the calculation of diluted earnings per share were immaterial on a weighted average basis.
 
13.
Property, plant and equipment, land use rights,
rights-of-use
assets, intangible assets and goodwill
 
    
Property, plant
and equipment
    
Land use rights
    
Right-of-use

assets
    
Intangible assets
    
Goodwill
  
    
RMB ’million
    
RMB ’million
    
RMB ’million
    
RMB ’million
    
RMB ’million
  
Net book amounts at January 1, 2025
     
803
 
 
 
2,364
 
 
 
295
 
 
 
2,049
 
 
 
19,647
  
Additions
     
186
 
 
 
— 
 
 
 
70
 
 
 
483
 
 
 
— 
  
Business combinations
     
— 
 
 
 
— 
 
 
 
— 
 
 
 
1,131
 
 
 
818
  
Depreciation and amortization
     
(24
) 
 
 
(37
) 
 
 
(54
) 
 
 
(589
) 
 
 
— 
  
Disposals
     
(2
) 
 
 
— 
 
 
 
(1
) 
 
 
(27
) 
 
— 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net book amounts at June 30, 2025
     
963
 
 
 
2,327
 
 
 
310
 
 
 
3,047
 
 
 
20,465
  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net book amounts at January 1, 2026
     
1,201
 
 
 
2,290
 
 
 
287
 
 
 
2,899
 
 
 
20,521
 
Additions
     
273
 
 
 
1
 
 
 
14
 
 
 
277
 
 
 
— 
 
Business combinations
     
92
 
 
 
— 
 
 
 
78
 
 
 
3,399
 
 
 
9,241
 
Depreciation and amortization
     
(23
) 
 
 
(37
) 
 
 
(57
) 
 
 
(677
) 
 
 
— 
 
Disposals
     
(3
) 
 
 
— 
 
 
 
— 
 
 
 
(3
) 
 
 
(5
) 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net book amounts at June 30, 2026
     
1,540
 
 
 
2,254
 
 
 
322
 
 
 
5,895
 
 
 
29,757
  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
The Group used the facilities for issuing payment guarantees of the constructions of buildings and has utilized RMB86 million related to the constructions of buildings as at June 30, 2026.
 
F-15
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
14.
Investments accounted for using equity method
 
    
As at
  
    
December 31,
     
June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Investments in associates
     
1,572
 
  
 
2,608
  
Investments in joint ventures
     
87
 
  
 
83
  
  
 
 
     
 
 
  
     1,659        2,691  
  
 
 
     
 
 
  
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Share of profit/(loss) of investments accounted for using equity method:
      
Associates
     
42
 
  
 
31
 
Joint ventures
     
(3
) 
  
 
(1
) 
  
 
 
     
 
 
  
     39        30  
  
 
 
     
 
 
  
Movement of investments in associates and joint ventures is analyzed as follows:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
At beginning of the period
     
4,669
 
  
 
1,659
 
Additions
     
1,824
 
  
 
84
 
Transfer (Note a)
     
— 
 
  
 
954
 
Business combinations
     
2
 
  
 
21
 
Share of profit, net
     
39
 
  
 
30
 
Share of other comprehensive (loss)/income
     
(38
) 
  
 
1
 
Deemed disposal (Note 9)
     
(4,506
) 
  
 
—
 
 
Disposal
     
(49
) 
  
 
(4
) 
Currency translation differences
     
(10
) 
  
 
(48
) 
Dividend income
     
(72
) 
  
 
(6
) 
At end of the period
     
1,859
 
  
 
2,691
  
  
 
 
     
 
 
  
Note:
(a) During the six months ended June 30, 2026, investment in an investee company of the Group with a carrying amount of RMB954 
million, which is engaged in artist management, was transferred from financial assets at fair value through other comprehensive income to investment in an associate, due to changes of certain Group’s shareholder rights in the investment.
(b)Both external and internal sources of information of associates are considered in assessing whether there is any indication that the investments may be impaired, including but not limited to their financial positions, business performances and market capitalization. During the six months ended June 30, 2025 and 2026, no impairment loss was recognized.
There are no material contingent liabilities relating to the Group’s interests in the investments accounted for using equity method.
 
F-16
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
15.
Financial assets at fair value
 
 
(a)
Financial assets at fair value through other comprehensive income
As at December 31, 2025 and June 30, 2026, the Group’s financial assets at fair value through other comprehensive income include equity investments in listed securities and equity investments in unlisted securities as the following table. The investments in listed equity securities mainly represented its investment in Spotify Technology S.A. (“Spotify”) and
UMG
.
 
    
As at,
  
    
December 31,
     
June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Equity investments in listed entities
     
26,217
 
  
 
19,131
  
Equity investments in unlisted entities
     
14
 
  
 
16
  
  
 
 
     
 
 
  
    
26,231
 
  
 
19,147
  
  
 
 
     
 
 
  
Movement of financial assets at fair value through other comprehensive income is analyzed as follows:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
At beginning of the period
     
14,498
 
  
 
26,231
 
Additions
     
8,257
 
  
 
—
 
 
Business combination
     
— 
 
  
 
6
 
Fair value change
     
11,610
 
  
 
(5,440
) 
Transfer (Note 14)
     
— 
 
  
 
(954
) 
Currency translation differences
     
(111
) 
  
 
(696
) 
  
 
 
     
 
 
  
At end of the period
     
34,254
 
  
 
19,147
  
  
 
 
     
 
 
  
 
 
(b)
Other investments
As at December 31, 2025 and June 30, 2026, the Group’s other investments represented financial assets at fair value through profit or loss. Movement of other investments is analyzed as follows:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
At beginning of the period
     
355
 
  
 
386
 
Additions
     
4
 
  
 
229
 
Business combination
     
— 
 
  
 
411
 
Disposal
     
—
 
 
  
 
(13
) 
Currency translation differences
     
(1
) 
  
 
(7
) 
  
 
 
     
 
 
  
At end of the period
     
358
 
  
 
1,006
  
  
 
 
     
 
 
  
Of which are:
      
Current
     
50
 
  
 
72
  
Non-current
     
308
 
  
 
934
  
  
 
 
     
 
 
  
    
358
 
  
 
1,006
  
  
 
 
     
 
 
  
 
F-17
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
 
(c)
Short-term investments
Short-term investments represent investments issued by commercial banks with a variable return
and
accounted for as financial assets at fair value through profit or loss. Movement of short-term investments is analyzed as follows:
 
    
Six months ended June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
At beginning of the period
     
— 
 
  
 
— 
  
Additions
     
2,300
 
  
 
4,012
  
Business combination
     
— 
 
  
 
980
  
Fair value change(Note 9)
     
39
 
  
 
11
  
Disposal
     
(2,339
) 
  
 
(4,880
 ) 
  
 
 
     
 
 
  
At end of the period
     
— 
 
  
 
123
  
  
 
 
     
 
 
  
 
16.
Prepayments, deposits and other assets
 
    
As at
  
    
December 31,
     
June 30
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Included in
non-current
assets
      
Prepaid content royalties
     
267
 
  
 
359
  
Others
     
98
 
  
 
86
  
  
 
 
     
 
 
  
    
365
 
  
 
445
  
  
 
 
     
 
 
  
Included in current assets
      
Prepaid content royalties
     
2,117
 
  
 
2,445
  
Interest receivables
     
840
 
  
 
719
  
Prepaid promotion and other expenses
     
756
 
  
 
921
  
Prepaid vendors deposits and other receivables
     
198
 
  
 
383
  
Value-added tax recoverable
     
98
 
  
 
226
  
Receivable from Tencent (Note 27(b))
     
78
 
  
 
48
  
Others
     
96
 
  
 
3
  
  
 
 
     
 
 
  
  
 
4,183
 
  
 
4,745
 
  
 
 
     
 
 
  
 
17.
Term deposits and cash and cash equivalents
 
 
(a)
Term deposits
As at December 31, 2025 and June 30, 2026, the Group’s term deposits were denominated in RMB and US$.
As at December 31, 2025 and June 30, 2026, the carrying amounts of the term deposits with initial terms of over three months approximated to their fair value.
 
 
(b)
Restricted cash
As at June 30, 2026, restricted cash held at banks of RMB8 million (December 31, 2025: RMB15 million) were mainly denominated in RMB, representing restricted deposits used as security against certain lawsuits.
 
F-18
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
 
(c)
Cash and cash equivalents
 
    
As at
  
    
December 31,
     
June 30,
  
    
2025
     
2026
  
    
RMB’million
     
RMB’million
  
Cash at bank
     
8,169
 
  
 
18,168
  
Term deposits with initial terms within three months
     
301
 
  
 
5,530
  
  
 
 
     
 
 
  
     8,470        23,698  
  
 
 
     
 
 
  
 
18.
Share capital
 
 
  
Number of
issued
shares
 
 
Share
capital
RMB’million
 
  
Additional
paid-in
capital
RMB’million
 
  
Shares
held for
share award
schemes
RMB’million
 
 
Treasury
Shares
RMB’million
 
Balance at January 1, 2025
  
 
  
  
 
(US$0.000083 par value; 4,800,000,000
shares authorized)
  
 
3,097,809,008
 
 
 
2
 
  
 
29,035
 
  
 
(520
) 
 
 
(550
) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Employee share award schemes
  
 
  
  
 
-Exercise of share options/ RSUs (note i)
  
 
— 
 
 
 
— 
 
  
 
428
 
  
 
— 
 
 
 
73
 
-Shares held for share award schemes (note ii)
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
(25
) 
 
 
— 
 
Repurchase of ordinary shares (note iii)
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
(462
) 
Shares allotted and issued for share award scheme
  
 
50,000,000
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
Shares cancellation
  
 
(5
) 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Balance at June 30, 2025
  
 
3,147,809,003
 
 
 
2
 
  
 
29,463
 
  
 
(545
) 
 
 
(939
) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Balance at January 1, 2026
  
 
  
  
 
(US$0.000083 par value; 4,800,000,000
shares authorized)
  
 
3,147,809,000
 
 
 
2
 
  
 
29,919
 
  
 
(801
) 
 
 
(664
) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Employee share award schemes
  
 
  
  
 
-Exercise of share options/ RSUs (note i)
  
 
— 
 
 
 
— 
 
  
 
120
 
  
 
— 
 
 
 
— 
 
-Shares held for share award schemes (note ii)
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
(69
) 
 
 
— 
 
Repurchase of ordinary shares (note iii)
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
(2,725
) 
Acquisition of Ximalaya
  
 
153,795,303
 
 
 
— 
 
  
 
4,894
 
  
 
— 
 
 
 
— 
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
Balance at June 30, 2026
  
 
3,301,604,303
 
 
 
2
 
  
 
34,933
 
  
 
(870
) 
 
 
(3,389
) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
As at December 31, 2025 and June 30, 2026, analysis of the Company’s issued shares is as follows:
 
 
  
As at December 31, 2025
 
  
As at June 30, 2026
 
 
  
Number of
issued
shares
 
  
Share
capital
RMB’million
 
  
Number of
issued
shares
 
  
Share
capital
RMB’million
 
Class A ordinary shares
  
 
1,482,859,752
 
  
 
1
 
  
 
1,636,655,055
 
  
 
1
 
Class B ordinary shares
   
 
1,664,949,248
 
  
 
1
 
  
 
1,664,949,248
 
  
 
1
 
  
 
 
     
 
 
     
 
 
     
 
 
  
     3,147,809,000        2        3,301,604,303        2  
  
 
 
     
 
 
     
 
 
     
 
 
  
 
*
All issued shares were fully paid as at December 31, 2025 and June 30, 2026.
 
(i)
During the six months ended June 30, 2025 and 2026, the Company transferred 2,091,258, and nil Class A ordinary shares from the Treasury shares to the grantees for the exercise of share options/RSUs, respectively.
 
(ii)
During the six months ended June 30, 2025 and 2026, the Share Scheme Trust purchased and withheld 532,134 and 2,024,652 Class A ordinary shares of the Company for an amount of approximately RMB25 million and RMB69 million which had been deducted from the equity.
 
F-19
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION

As at December 31, 2025 and June 30, 2026, the Share Scheme Trust held 48,550,176 and 42,074,118 Class A ordinary shares, respectively. These shares include those designated for the purpose of granting awarded shares to the participants under the Share Award Schemes, as well as shares that have been purchased and withheld by the Share Scheme Trust.
 
(iii)
Repurchase of shares
In March 2023, the board of directors of the Company authorized a new share repurchase program, under which the Company may repurchase up to USD500 million of its Class A ordinary shares in the form of ADSs during a 24-month period commencing from March 20, 2023 (the “2023 Share Repurchase Program”). During the six months ended June 30, 2025, the Company repurchased 5,943,751 ADSs from the open market, at an aggregate consideration of approximately US$64 million (equivalents to approximately RMB462 million) in cash, under the 2023 Share Repurchase Program.
On March 17, 2025, board of directors of the Company authorized the 2025 Share Repurchase Program under which the Company may repurchase up to US$1 billion of our Class A ordinary shares, including in the form of ADSs, during a
two-year
period commencing on March 21, 2025. During the six months ended June 30, 2026, the Company repurchased 43,479,650 ADSs from the open market, at an aggregate consideration of approximately US$400 million (equivalents to approximately RMB 2,725 million) in cash, under the 2025 Share Repurchase Program.
The Company accounts for the repurchased ordinary shares as treasury stock under the cost method and records it as a component of the shareholders’ equity.
 
19.
Other reserves
 
 
  
Share-based
compensation
reserve
RMB’million
 
 
Contribution
from ultimate
holding
company
RMB’million
 
  
PRC
statutory
reserve
RMB’million
 
  
Foreign
currency
translation
reserve
RMB’million
 
 
Fair value
reserve
RMB’million
 
 
Others
RMB’million
 
 
Total other
reserves
RMB’million
 
Balance at January 1, 2025
  
 
1,691
 
 
 
463
 
  
 
231
 
  
 
277
 
 
 
10,005
 
 
 
7,178
 
 
 
19,845
 
Currency translation differences
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
(137
) 
 
 
— 
 
 
 
— 
 
 
 
(137
) 
Fair value changes on financial assets at fair value through other comprehensive income
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
11,610
 
 
 
— 
 
 
 
11,610
 
Share of other comprehensive loss of an associate
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
(38
) 
 
 
(38
) 
Share based compensation
  
 
297
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
297
 
Exercise of share options/ RSUs
  
 
(224
) 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(224
) 
Deemed disposal
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
(147
) 
 
 
(147
) 
Recognition of financial liabilities in respect of the put option from business combination
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
(345
) 
 
 
(345
) 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2025
  
 
1,764
 
 
 
463
 
  
 
231
 
  
 
140
 
 
 
21,615
 
 
 
6,648
 
 
 
30,861
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2026
  
 
1,562
 
 
 
463
 
  
 
242
 
  
 
(545
) 
 
 
14,099
 
 
 
6,629
 
 
 
22,450
 
Currency translation differences
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
(1,091
) 
 
 
— 
 
 
 
— 
 
 
 
(1,091
) 
Fair value changes on financial assets at fair value through other comprehensive income
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
(5,440
) 
 
 
— 
 
 
 
(5,440
) 
Share of other comprehensive income of an associate
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
1
 
 
 
1
 
Share based compensation
  
 
339
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
339
 
Exercise of share options/ RSUs
  
 
(116
) 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
— 
 
 
 
(116
) 
Acquisition of Ximalaya
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
120
 
 
 
120
 
Recognition and fair value change of financial liabilities in respect of the put option from business combinations
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
(68
) 
 
 
(68
) 
Transfer of losses on deemed disposal of financial instruments to retained earnings
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
265
 
 
 
— 
 
 
 
265
 
Transactions with minority interest
  
 
— 
 
 
 
— 
 
  
 
— 
 
  
 
— 
 
 
 
— 
 
 
 
18
 
 
 
18
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at June 30, 2026
  
 
1,785
 
 
 
463
 
  
 
242
 
  
 
(1,636
) 
 
 
8,924
 
 
 
6,700
 
 
 
16,478
 
  
 
 
 
 
 
 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
F-20
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
20.
Share based compensation
 
 
(a)
Share-based compensation plans of the Company
The Group has adopted four share-based compensation plans, namely, the 2014 Share Incentive Plan, the 2017 Restricted Share Scheme, the 2017 Option Plan and the 2024 Share Incentive Plan. The Group adopted 2024 Share Incentive Plan in May 2024. According to the 2024 Share Incentive Plan, 228,775,377 ordinary shares have been reserved to be issued to any qualified employees, directors,
non-employee
directors, and consultants as determined by the board of directors of the Company. Upon the adoption of the 2024 Share Incentive plan, the outstanding options and RSUs under previous plans were all transferred to the 2024 Share Incentive plan and the previous plans ceased to be of any effect.
Movements in the number of RSUs for the six months ended June 30, 2025 and 2026 are as follows:
 
    
Number of awarded shares
Six months Ended June 30,
  
    
2025
     
2026
  
Outstanding as at January 1
     
38,249,608
 
  
 
32,548,726
 
Granted
     
3,432,584
 
  
 
11,957,716
 
Vested
     
(3,030,558
) 
  
 
(8,119,322
) 
Forfeited
     
(1,397,634
) 
  
 
(690,248
) 
  
 
 
     
 
 
  
Outstanding as at June 30
     
37,254,000
 
  
 
35,696,872
  
  
 
 
     
 
 
  
Expected to vest as at June 30
     
33,139,401
 
  
 
32,612,967
  
The fair value of the restricted shares was calculated based on the fair value of ordinary shares of the Company. The weighted average fair value of restricted shares granted during the six months ended June 30, 2025 and 2026 was US$5.81 per share (equivalent to approximately RMB41.64 per share) and US$5.77 per share (equivalent to approximately RMB39.14 per share), respectively.
Movements in the number of share options for the six months ended June 30, 2025 and 2026 are as follows:
 
    
Number of
options
     
Weighted-
average
exercise
price
(US$)
     
Weighted-
average
grant
date fair
value
(US$)
  
Outstanding as at January 1, 2025
     
36,755,376
 
  
 
3.92
 
  
 
2.06
Granted
     
2,583,444
 
  
 
5.53
 
  
 
3.21
Exercised
     
(9,152,516
) 
  
 
4.22
 
  
 
2.13
Forfeited
     
(1,254,192
) 
  
 
8.39
 
  
 
2.04
  
 
 
        
Outstanding as at June 30, 2025
     
28,932,112
 
  
 
3.77
 
  
 
2.14
  
 
 
        
Vested and expected to vest as at June 30, 2025
     
21,223,234
 
  
 
3.76
 
  
 
2.15
Exercisable as at June 30, 2025
     
16,727,874
 
  
 
3.43
 
  
 
2.22
Non vested as at June 30, 2025
     
4,756,408
 
  
 
4.95
 
  
 
2.02
Outstanding as at January 1, 2026
     
21,835,852
 
  
 
3.72
 
  
 
2.12
Granted
     
58,722
 
  
 
8.47
 
  
 
4.07
Exercised
     
(381,388
) 
  
 
1.51
 
  
 
1.81
Forfeited
     
(28,904
) 
  
 
7.43
 
  
 
4.35
  
 
 
        
Outstanding as at June 30, 2026
     
21,484,282
 
  
 
3.77
 
  
 
2.13
 
 
        
Vested and expected to vest as at June 30, 2026
     
21,223,234
 
  
 
3.76
 
  
 
2.12
Exercisable as at June 30, 2026
     
16,727,874
 
  
 
3.43
 
  
 
1.93
Non vested as at June 30, 2026
     
4,756,408
 
  
 
4.95
 
  
 
2.84
 
F-21
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
The weighted average price of the shares at the time these options were exercised was US$8.18 per share (equivalent to approximately RMB58.61) and US$5.91 per share (equivalent to approximately RMB40.12) during the six months ended June 30, 2025 and 2026, respectively.
 
 
(b)
Fair value of options
The fair value of share options was valued using the Binomial option-pricing model as at the respective grant dates.
Assumptions used in the Binomial option-pricing model are presented below:
 
    
Six months ended June 30,
  
    
2025
    
2026
  
Risk free interest rate
      4.65 %      4.17 % 
Expected dividend yield
      0.13 %      1.50 % 
Expected volatility
      60 %      55 % 
Exercise multiples
     
2.2-2.8
      
2.2-2.8
  
Contractual life
      10 years       10 years  
 
 
(c)
Outstanding share options
Share options
outstanding
as at December 31, 2025 and June 30, 2026 have the following expiry date and exercise prices:
 
Expiry date
   
Exercise price
     
December 31,
2025
     
June 30,
2026
  
10 years commencing from the date of grant of options
      US$0.27        380,740        185,344  
     US$1.93        8,027,128        7,901,208  
     US$2.24
 
~
 
US$2.32		        4,124,428        4,115,062  
     US$3.32
 
~
 
US$3.82		        909,652        909,652  
     US$4.24        204,952        194,952  
     US$5.26
 
~
 
US$5.29		        2,519,978        2,487,182  
     US$5.53        2,424,808        2,415,976  
     US$6.20
 
~
 
US$6.37		        529,400        529,400  
     US$7.05 ~ US$7.61        1,997,160        1,969,178  
     US$8.47 ~ US$9.53        169,080        227,802  
     US$10.65        548,526        548,526  
     
 
 
     
 
 
  
Total
         21,835,852        21,484,282  
     
 
 
     
 
 
  
Weighted average remaining contractual life of options outstanding:
 
      5.99        5.53  
  
 
 
     
 
 
  
 
 
(d)
Expected retention rate of grantees
The Group has to estimate the expected yearly percentage of grantees that will stay within the Group at the end of the vesting periods of the options and awarded shares (the “Expected Retention Rate”) in order to determine the amount of share-based compensation expenses charged to the condensed consolidated income statement. As at December 31, 2025 and June 30, 2026, the Expected Retention Rate of the Group was assessed to be
 
87
%-
96
%.
 
F-22
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
21.
Borrowings
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Included in
non-current
liabilities:
      
Non-current
portion of long-term RMB bank borrowings, unsecured (Note (a))
      —         7,142  
  
 
 
     
 
 
  
Included in current liabilities:
      
RMB bank borrowings, unsecured (Note (b))
      —         5,973  
Current portion of long-term RMB bank borrowings, unsecured (Note (a))
      —         24  
  
 
 
     
 
 
  
     —         5,997  
  
 
 
     
 
 
  
     —         13,139  
  
 
 
     
 
 
  
 
  (a)
The aggregate principal amounts of long-term bank borrowings and applicable interest rates are as follows:
 
    
As at June 30, 2026
    
Amount
(RMB’million)
     
Interest rate
(per annum)
RMB bank borrowings
      7,121        LPR
-0.85% ~ 0.30%
  
 
RMB bank borrowings
     45      
3.10%
  
  
 
 
     
     7,166     
  
 
 
     
The long-term bank borrow
ing
s are repayable as follows:
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Within 1 year
      —         24  
Between 1 and 2 years
      —         214  
Between 2 and 5 years
      —         1,650  
Over 5 years
      —         5,278  
  
 
 
     
 
 
  
     —         7,166  
  
 
 
     
 
 
  

  (b)
The aggregate principal amounts of short-term bank borrowings and applicable interest rates are as follows
:
 
    
As at June 30, 2026
  
    
Amount
(RMB’million)
     
Interest rate
(per annum)
  
RMB bank borrowings
      5,973       
1.70
%
~ 
2.30%
  
As at June 30, 2026, the carrying amounts of borrowings approximated their fair values.
The Group had complied with all of the financial covenants of its borrowing facilities for the six months ended June 30, 2026.
 
F-23
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
22.
Notes payable
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Included in
non-current
liabilities
      3,497        3,390  
  
 
 
     
 
 
  
In September 2020, the Company issued two tranches of senior unsecured notes with an aggregate principal amount of US$800 
million as set out below. The notes due 2025 have been fully repaid. 

    
Principal
amount
(US$’million)
     
Carrying
amount at
December 31,
2025
(RMB’million)
     
Carrying
amount at
June 30,
2026
(RMB’million)
     
Interest Rate
(per annum)
    
Due
  
2025 Notes
      300        —         —         1.375 %      2025  
2030 Notes
      500        3,497        3,390        2.000 %      2030  
  
 
 
     
 
 
     
 
 
       
     800        3,497        3,390       
  
 
 
     
 
 
     
 
 
       
Notes payable issued by the Company were recognized initially at fair value and subsequently carried at amortized cost.
The fair value of notes payable as at December 31, 2025 and June 30, 2026 was US$452 million (equivalents to approximately RMB3,176 million) and US$450
 
million (equivalents to approximately RMB3,066 million). The fair value of notes payable was based on the quoted market prices at the end of reporting period.
Interest is payable semi-annually in arrears on and of each year, beginning in March 2021. The total cash outflow in financing activities for interest paid of notes payable in the six months ended June 30, 2025 and 2026 was RMB51 million and RMB35 million, respectively.
 
23.
Other payables and other liabilities
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Included in
non-current
liabilities
      
Put option liabilities on
non-controlling
interest
      379        230  
Consideration liabilities related to the acquisition of Ximalaya
      —         216  
Others
      —         22  
  
 
 
     
 
 
  
     379        468  
  
 
 
     
 
 
  
Included in current liabilities
      
Accrued expenses (note)
      2,453        2,224  
Investment payables
      1        410  
Other tax liabilities
      281        324  
Put option liabilities on
non-controlling
interest
      —         218  
Payable for construction in progress
      160        195  
Advances from customers
      208        148  
Consideration liabilities related to the acquisition of Ximalaya
      —         108  
Payable to Tencent Group (Note 27(b))
      90        104  
Other deposits
      25        31  
Others
      340        689  
  
 
 
     
 
 
  
     3,558        4,451  
  
 
 
     
 
 
  
Note: Accrued expenses mainly comprise payroll and welfare, advertising and marketing, short-term lease rental and other operating expenses.
 
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Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
24.
Deferred revenue
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Non-current
      303        447  
Current
      3,539        4,447  
  
 
 
     
 
 
  
     3,842        4,894  
  
 
 
     
 
 
  
Deferred revenue mainly represents contract liabilities in relation to the service fees prepaid by customers for membership services, time-based virtual gifts, content sublicensing and digital music singles and albums, for which the related services had not been rendered as at December 31, 2025 and June 30, 2026.
 
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5
Table of Contents
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
25.
Business Combinations
 
  (a)
Acquisition of Ximalaya
In June 2025, the Group announced its proposed acquisition of Ximalaya, which is a leading online audio company in Chinese Mainland, pursuant to a Merger Agreement dated June 10, 2025. On May 18, 2026, the Group completed the acquisition of entire equity interest of Ximalaya. The total purchase consideration amounted to approximately RMB14.0 
b
illion, which comprised cash consideration of approximately RMB8.6 
b
illion, and certain ordinary shares issued or to be issued by the Group. On the acquisition date, the Group issued 153,795,303 Class A ordinary shares to selling shareholders of Ximalaya. 2,203,466 Class A ordinary shares shall be issued on the first anniversary date of the Closing Date. Meanwhile, the Group reserved
certain number of
Class A ordinary shares (“Founder Indemnity Shares”) at closing as partial security for founders’ obligation. The Founder Indemnity Shares are classified as financial liabilities, presented in “Other payables and other liabilities”. The Group estimated the fair value of the Founder Indemnity Shares at the acquisition date and at each period end based on the best estimate of shares to be issued and the stock price of the Company’s ordinary
shares. Accordingly, the Group recognized fair value changes related to the Founder Indemnity Shares with amount of RMB28 million for the six months ended June 30, 2026. The
 Group also granted certain number of RSUs under the 2024 Share Incentive Plan to replace the outstanding options and/or RSUs under Ximalaya’s previous ESOP programs. The portion for
pre-combination
services is accounted for as part of the consideration and the portion for post-combination services is accounted for as compensation cost.
The fair value of total identifiable net assets (including identifiable intangible assets) was approximately RMB4.7 
b
illion. Goodwill of approximately RMB9.2 
b
illion was recognised as a result of the transaction. It was mainly attributable to the operating synergies and economies of scale expected to be derived from combining the operations. None of the goodwill was expected to be deductible for income tax purpose.
The acquired business contributed revenue of RMB
407
 
million to the Group for the six months ended June 30, 2026. The Group’s revenue for the six months ended June 30, 2026 would be increased by no more than 10% and net profit for the six months ended June 30, 2026 would not be materially different should the transaction have occurred on January 1, 2026.
The related transaction costs of the transaction recognised in the Group’s condensed consolidated income statement were not material.
 
  (b)
Other business combinations
During the six months ended June 30, 2026, the Group acquired equity interests of companies with total considerations of RMB42 
million. The revenue and the results contributed by the acquired subsidiaries subsequent to the acquisition was immaterial to the Group. The Group’s revenue and results for the six months ended June 30, 2026 would not be materially different should these acquisitions had occurred on January 1, 2026.
 
26.
Commitments
The following table summarizes future minimum commitments of the Group as at December 31, 2025 and June 30, 2026:
 
 
  
Within one year
 
  
Later than one year
but
not later than five
years
 
  
Total
 
As at December 31, 2025
  
RMB’million
 
  
RMB’million
 
  
RMB’million
 
Operating commitments (note i)
      118        3        121  
Content royalties (note ii)
      2,288        303        2,591  
Capital commitments (note iii)
     
392
 
  
 
213
 
  
 
605
  
Investment commitment (note iv)
     
50
 
  
 
— 
 
  
 
50
  
 
F-26
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
 
  
Within one year
 
  
Later than one year
but
not later than five
years
 
  
Total
 
As at June 30, 2026
  
RMB’million
 
  
RMB’million
 
  
RMB’million
 
Operating commitments (note i)
    131    4    135
Content royalties (note ii)
    2,512    640    3,152
Capital commitments (note iii)
    366    74    440  
Investment commitment (note iv)
    331    —     331
Note i: Operating commitments represent future minimum commitments under
non-cancelable
operating arrangements of the Group. As at June 30, 2026, the operating commitments are mainly related to offline performances and other services.
Note ii: Content royalties represent the minimum royalty payments associated with license agreements which the Group has entered into as at period-end.
Note iii: Capital commitments represent the minimum payments associated with construction of buildings.
Note iv: Investment commitment represents commitments to acquire the equity interests in certain entities.
 
27.
Related party transactions
The table below sets forth the major related parties and their relationships with the Group as at June 30, 2026
 
Name of related parties
  
Relationship with the Group
Tencent and its subsidiaries other than the entities controlled by the Group (“Tencent Group”)
  
The Company’s principal owner
 
F-27
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
 
(a)
Transactions
For the six months ended June 30, 2025 and 2026, significant related party transactions were as follows:
 
    
Six months ended June 30,
  
    
2025
RMB’million
     
2026
RMB’million
  
Revenue
      
Music related services to Tencent Group (note i)
      119        229  
Music related services to the Company’s associates and associates of Tencent Group
      249        232  
Social entertainment services and others to Tencent Group, the Company’s associates and associates of Tencent Group
      29        33  
Expenses
      
Service cost to Tencent Group
      359        369  
Service cost to the Company’s associates and associates of Tencent Group
      625        819  
Other costs and expenses to Tencent Group (note ii)
      622        624  
Other costs and expenses to the Company’s associates and associates of Tencent Group
      148        106  
Note i: Primarily include revenues from online advertising and membership services provided to Tencent Group
pursuant
to the Business Cooperation Agreement, which was renewed in August 2023.
Note ii: Primarily include advertising fees charged by Tencent Group for our advertising services sold through Tencent Group.
These related party transactions were conducted at prices and terms as agreed by the respective parties involved.
Note iii: During the six months ended June 30, 2026, the Group completed acquisition of Ximalaya (Note 25), which is one of the existing investee companies accounted for as financial assets at fair value through profit or loss of Tencent Group. The Group paid total consideration of
approximately RMB
1,071 
m
illion, consisting of cash consideration and Class A Ordinary Shares, to certain subsidiaries of Tencent Group.
 
 
(b)
Balances with related parties
 
    
As at
  
    
December 31,
2025
RMB’million
     
June 30,
2026
RMB’million
  
Included in accounts receivable from related parties:
      
Tencent Group (note)
      2,249        2,222  
The Company’s associates and associates of Tencent Group
      60        68  
Included in prepayments, deposits and other assets from related parties:
      
Tencent Group
      78        48  
The Company’s associates and associates of Tencent Group
      981        485  
Included in accounts payable to related parties:
      
Tencent Group
      595        476  
The Company’s associates and associates of Tencent Group
      232        204  
Included in other payables and accruals to related parties:
      
Tencent Group
      90        104  
The Company’s associates and associates of Tencent Group
      26        187  
Note: The balance is mainly arising from user payments collected through various payment channels of Tencent Group pursuant to the Business Cooperation Agreement that renewed in August 2023.
 
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28
TENCENT MUSIC ENTERTAINMENT GROUP
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
 
 
(c)
Key management personnel compensation
 
    
Six months ended June 30,
  
    
2025
RMB’million
     
2026
RMB’million
  
Short-term employee benefits
   
24
  
24
Share-based compensation
 
 
48
 
 
 
39
 
 
 
 
 
 
 
 
 
 

    72

   63
  
 
 
     
 
 
  
 
28.
Contingent liabilities
The Group is involved in a number of claims pending with various courts, or otherwise unresolved as at June 30, 2026. These claims are mainly related
to alleged copyright infringement with an aggregate amount of damages sought of approximately RMB128 million. Adverse results in these claims may include awards of damages and may also result in, or even compel a change in the Company’s business practices, which could impact the Company’s future financial results materially.
The Group had made certain accruals in “Accounts payable” in the condensed consolidated balance sheet as at June 30, 2026 and recognized related costs as expenses for the six months ended June 30, 2026. The losses accrued include judgments handed down by the court and
out-of-court
settlements after June 30, 2026, but related to cases arising on or before June 30, 2026. All these amounts were not material. The Group is in the process of appealing in certain cases. However, the ultimate timing and outcome of pending litigation is inherently uncertain. The Company is unable to estimate the reasonably possible loss or a range of reasonably possible losses for proceedings in the early stages or where there is a lack of clear or consistent interpretation of laws specific to the industry-specific complaints among different jurisdictions. Although the results of unsettled litigations and claims cannot be predicted with certainty, the Company does not believe that, as at June 30, 2026, there was at least a reasonable possibility that the Company may have incurred a material loss, or a material loss in excess of the accrued expenses, with respect to such loss contingencies. Although management considers the likelihood of a material loss for all pending claims, both asserted and unasserted, to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements of a particular reporting period could be materially adversely affected.
 
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