H.E.R.O.’s Journey in Tech (18 August 2018) – Does Tencent Music Deserve a Spotify-Like Valuation?

H.E.R.O.’s Journey in Tech (18 August 2018) – Does Tencent Music Deserve a Spotify-Like Valuation?

Companies

• Does Tencent Music Deserve a Spotify-Like Valuation? Tencent Music this year could generate revenue less than half of Spotify’s projected $6 billion. Tencent Music is profitable, which is rare in music-streaming. The firm pulled in roughly two billion yuan ($290 million) in net income last year. Spotify, in contrast, reported a net loss of about $1.4 billion last year, although nearly $1 billion of that was due to a one-time financing charge. In terms of users, Tencent Music is way bigger than Spotify. Tencent Music operates streaming service QQ Music as well as karaoke and live-streaming music apps Kugou and Kuwo. The three services had a combined 700 million monthly users in China as of September 2017, according to Tencent Music. Tencent Music operates a fourth service, the karaoke app WeSing, which at the end of last year had more than 460 million registered users. By comparison, Spotify had 180 million monthly users and 83 million paid subscribers as of June, the company has said. But Spotify’s ratio of paid versus free users is higher than at Tencent Music, where only a fraction of its Chinese users pay for music. The secret of Tencent Music’s profitability is virtual goods and cheap music rights. Most of its revenue comes from non-subscription services including karaoke and live-streaming services, where users can pay to send virtual gifts to performers (The Info)
• Apple supplier Luxshare plans camera module IPO as next leap; Chinese company’s growth threatens rivals in Taiwan and South Korea (Nikkei)
• China’s online pharmacy 1Yaowang seeks $200m NYSE IPO (KRA)
• On-demand app Grab, which operates across Southeast Asia, is moving into healthcare, through a joint venture with Ping An Good Doctor (KRA)
• Foxconn Pursues Chip Ambitions With Plans for China Plant (WSJ)
• Kakao Bank gives regional lenders a run for their money (Investor)

BATTSS – Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung

• Chinese internet stock sell-off may shake faith in FANGs (Reuters)
• Samsung’s Galaxy empire in crisis; Amid strong competition from Chinese rivals, smartphone leader looks for innovation; semiconductor business is the largest contributor to its earnings, posting 35.2 trillion won in operating profit, or 65.6% of Samsung’s total operating profit (Nikkei)

FAANNMG – Facebook, Amazon, Apple, Nvidia, Netflix, Microsoft, Google

• Why Amazon Picked Taiwan For Its Latest Innovation Center (Forbes)
• Tivo drops on report that Amazon is considering live TV recorder (FT)
• Amazon’s Dominance in Ecommerce (Visual)

• Google always watching, even when location tracking turned off (AFR)

Asia Tech & Innovation Trends

• China’s ride-hailing resurgence is just another step into the future of mobility (Technode)
• Online health care service puts Grab and Go-Jek on collision course; Ride-hailing rivals fight it out in Indonesia with mostly mirror-image services (Nikkei)

Global Tech & Innovation Trends

• Farmers Business Network: Data farming; FBN has built a network of more than 6,500 farms to which it offers information, an online store and marketing help—all with the goal of making farmers more profitable (Forbes)
• Late to the Driverless Revolution: America’s car industry dismissed the potential of autonomous driving for years as tech companies plunged ahead. Now Detroit is racing to catch up. (WSJ)