JPMorgan has upgraded Tencent Music Entertainment’s stock to a ‘buy’ and set a target value of $16/share.
The decision by JPMorgan analysts comes just over a month after the Chinese firm began trading on the New York Stock Exchange under the symbol TME (on December 12).
As reported by the Motley Fool, JPMorgan (along with Merrill Lynch, Credit Suisse and others) acted as one of the underwriters for Tencent’s IPO, but gave no rating at all at the time.
Earlier this month Morgan Stanley, Stifel and Deutsche Bank, which also helped to underwrite the IPO gave TME hold ratings, while Goldman Sachs and KeyBanc upgraded Tencent Music to a ‘buy’.
According to a research note to investors from JP Morgan Alex Yao, as reported by the Fly, Tencent Music has a “China-unique revenue model,” with Yao adding that he sees Tencent Music’s long-term growth potential as ‘sizeable’.
Meanwhile, HSBC (which was also an underwriter for the IPO) also upgraded TME’s rating to ‘buy’ on Friday (January 18) and set the same target value of $16/share set by JPMorgan.
TME is home to three of China’s leading music streaming services; QQ Music, Kugou and Kuwo.
The company raised around $1.1bn at the time of its IPO, offering 82,000,000 shares at $13, with an IPO market valuation on the NYSE of $21.3bn.
TME went on to open at $14.10/share and rose 10.6% during its first morning’s trade, before closing the day up 9.2% at $14.19 per share.
The company officially filed to float on the NYSE in October 2018.
Tencent Music’s stock closed up 10.6% on Friday January 18 at $14.35/share.Music Business Worldwide