Tencent Music’s overall revenue in 2018 was 18.99 billion yuan, approximately US$2.76 billion, a year-on-year increase of 72.9%. The net profit attributable to shareholders that year was 1.83 billion yuan, approximately US$267 million. Non-IFRS net profit increased to 4.18 billion yuan, or approximately US$607 million. Its revenue in the fourth quarter was 5.4 billion and its net profit loss was 876 million. The reason was due to a one-time expenditure of 1.52 billion yuan related to the listing. The reason was stock fees paid to record partners such as Warner Music Group and Sony Music Entertainment during the listing process. . Because Tencent Music was listed on the US stock market in December last year.

U.S. financial reports are generally based on two sets of standards, one is universal standards and the other is non-universal standards. It can be considered that the universal standard is a convention, and in order to make the financial report more intuitive, the non-universal standard part of the financial report will add back some losses that have little impact. Therefore, Tencent Music's non-universal financial report is still positive profit, no loss, and the profit in the fourth quarter was 916 million. . In the United States, additional stock issuance is not a simple change of equity. Most additional issuances must be considered to be converted into profits within general guidelines. For example, most domestic additional issuances, such as 10 million shares, with an additional issuance price of 10 yuan per share, will be included in the share capital of 10 million, and the rest will be included in the capital reserve. But when you go abroad, you have to consider the issue of consideration. If it is determined to be an exchange of interests, it needs to be regarded as purchasing the corresponding stocks from the market and then paying the counterparty. The specific calculation is very complicated. In the past, Chinese companies shared traffic and simultaneously obtained additional shares issued by the other company, which was considered a benefit transaction.

So, in fact, the market's immediate response to Tencent Music was that it fell 8% that day, which is reasonable, because this part can essentially be seen as Tencent Music exchanging stock interests for some copyrights. Although the reflection arc of this transaction is very long, it has a consideration cost. Because the obvious thought is, why would you give this Warner and Sony stock interest? That should be cooperation on copyright, and these cooperations eventually paid part of it in the form of stocks.

The specific accounting estimates based on general principles are not clear. We only think so based on limited information. There are relatively big differences between Chinese and American accounting standards.