Movies & entertainment shares jumped on Thursday. Netease Music up 7% to a record new high; Tencent Music up 2%.

Tencent Music reached a merger agreement with Ximalaya, which is in line with TME-SW's investment strategy to strengthen its content ecosystem, and potentially enhancing its content offering in the long-form audio area, according to Nomura's research report.

Nomura raised its FY2026 revenue/ EPS forecasts for TME-SW by 20%/ 4% each, with rating kept at Buy, and lifted its target price for TME-SW's US stock from US$17.2 to US$21.5, corresponding to a FY2026 projected PE ratio of 22x and an estimated FY2025-FY2027 earnings CAGR of 22%.