11:35 AM EDT, 08/12/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

Following TME's Q2 2025 earnings beat, we raise our 2025 and 2026 earnings per ADS forecast to CNY5.95 and CNY6.84 (from CNY5.55 and CNY6.25), on our assumption of a higher margin. We raise our 12-month target price to HKD25 (from HKD24), approximately 26.3x our 2026 EPS forecast, or a ~26% premium to its five-year historical average of ~21x. We believe this significant premium is justified by the company's structural margin improvement, growing contributions from high-quality revenue streams, and increasing visibility on free cash flow and capital returns. The reacceleration of its revenue growth in recent quarters on lower drag from the significantly smaller social entertainment services segment is a further positive. Increasing SVIP penetration among its user base, better monetization, exclusive content partnerships, and AI-driven engagement tools should help TME maintain its double-digit EPS trajectory through 2026. Still, we believe its premium valuation may limit further significant upside.