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Tencent Music Entertainment (TME  fell 6.4% to $17.39 Wednesday following the release of its first earnings report since it went public.

The Chinese music streaming company reported earnings excluding extraordinary items of 8 cents per American depository share on revenue of $785 million, a 50.5% increase from a year earlier. The company was expected by analysts to report earnings of 2 cents per ADS on revenue of $779 million.

Tencent Music recorded a quarterly loss of $127 million, primarily due to a one-time, share-based accounting charge of $221 million related to its issuance of equity to music label partners Warner Music Group and Sony Music Entertainment.

Costs in the quarter rose 63%, trimming Tencent Music's gross margin to 34% from 38.9% a year earlier.

"Our initial public offering in December 2018 has launched us onto the international stage, elevated the global recognition towards our brand, and endorsed our successful track record," stated Cussion Kar Shun Pang, CEO of Tencent Music. "During the fourth quarter of 2018, we recorded strong growth across our business lines, including both online music and social entertainment services, and solidified our market leadership."

Tencent Music said paying users of its online music service rose 39.2% to 27 million in the fourth quarter.

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