Wed. Nov 30th, 2022

Funding administration firm Bireme Capital lately launched its third-quarter 2022 investor letter. A duplicate of the identical could be downloaded right here. Within the third quarter, the fund outperformed and was up 2.5% internet of charges in comparison with a -4.9% decline for the S&P 500 Index. Since inception, the technique returned 22.7% internet yearly in comparison with a 12.0% annual return for the S&P 500 Index. As well as, you possibly can test the highest 5 holdings of the fund to know its finest picks in 2022.

Bireme Capital highlighted shares like Tencent Music Leisure Group (NYSE:TME) in its Q3 2022 investor letter. Headquartered in Shenzhen, China, Tencent Music Leisure Group (NYSE:TME) is a web-based music leisure platform. On November 7, 2022, Tencent Music Leisure Group (NYSE:TME) inventory closed at $3.9700 per share. One-month return of Tencent Music Leisure Group (NYSE:TME) was 0.25% and its shares misplaced 50.06% of their worth during the last 52 weeks. Tencent Music Leisure Group (NYSE:TME) has a market capitalization of $6.729 billion.

Bireme Capital made the next remark about Tencent Music Leisure Group (NYSE:TME) in its Q3 2022 investor letter:

“We made a couple of materials trades within the quarter. First, we bought our stake in Tencent Music Leisure Group (NYSE:TME), which we wrote about in our “CIO Nook” e-newsletter.

We bought our stake primarily due to the large underperformance of TME’s “Social Leisure” phase. That portion of the enterprise, which operates primarily by a gaggle karaoke app referred to as WeSing, misplaced 27% of its customers through the yr that we owned the inventory. This appears to have been induced primarily by competitors from different streaming platforms, comparable to TikTok (Douyin in China), a danger which we underestimated. Since this phase produces basically all of TME’s earnings, the lack of customers had a dramatic affect on our valuation of the enterprise.

Secondarily, we had anticipated development of Common Income Per Consumer (ARPU) of their music subscription enterprise, through which TME has 70% share in China. Regardless of this close to monopoly, competitors from upstart NetEase Cloud Music has been fierce. Over the past yr, NetEase gained materials market share by providing reductions of 15-20% off the usual 8 RMB month-to-month value. TME has been pressured to reply in form, and TME’s ARPU fell 11% YoY within the second quarter.

With customers falling dramatically in Social Leisure and ARPU development in query in On-line Music, there was merely nothing left to help our authentic bullish stance on the inventory. Even the autumn from $6 on the finish of 2021 to $4 per share in July was not sufficient to compensate for this transformation in our assessed worth, so we bought our place.”

Story continues

Dolby, Music

Dolby, Music

Tencent Music Leisure Group (NYSE:TME) shouldn’t be on our checklist of 30 Most Common Shares Amongst Hedge Funds. As per our database, 14 hedge fund portfolios held Tencent Music Leisure Group (NYSE:TME)  on the finish of the second quarter, which was 20 within the earlier quarter.

We mentioned Tencent Music Leisure Group (NYSE:TME) in one other article and shared one of the best Chinese language shares to put money into. As well as, please take a look at our hedge fund investor letters Q3 2022 web page for extra investor letters from hedge funds and different main traders.


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Disclosure: None. This text is initially revealed at Insider Monkey.

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