RTTNews | Aug 17, 2021 11:42AM EDT

11:42 Tuesday, August 17, 2021 (RTTNews.com) - Chinese entertainment company Tencent Music Entertainment Group (TME), lost 12% during the morning session after the company reported a decline in its net income for the second quarter. The decline can be attributed to a drop in monthly active users and the loss of music licensing agreements.

The net income reported by the company was RMB827 million or RMB0.24 per share compared to RMB939 million or RMB0.28 per share in the same period of 2020. On an adjusted basis the earnings were RMB1.12 billion or RMB0.33, down from RMB1.15 billion or RMB0.34 in the previous year.

The revenue for the company increased to RMB8.01 billion from RMB6.93 billion last year. The increase was chiefly boosted by a 32% increase in the online music service revenue which increased 32% to RMB2.95 billion but was offset by a 17% increase in the cost of revenue.

The company also reported a 40% increase in paid users to 66 million but drops in Monthly active users in both its music platform and social entertainment platform have affected the growth of the company severely.

The shares are currently trading at $7.87, down $1.05 or 11.77% from their previous close at $8.92. The company opened its shares at $8.06 in the morning.

Due to a government crackdown on companies listed in the overseas market, the company has lost almost 50% of its value in the last three months as it is trading at the lowest since getting listed. In the 52 week period, the shares have ranged between $7.63 and $32.25.

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