Filed 19 Apr 19

Document and Entity Information

Document and Entity Information12 Months Ended
Dec. 31, 2018shares
Document And Entity Information [Line Items]
Document Type20-F
Document Period End DateDec. 31,
2018
Amendment Flagfalse
Document Fiscal Year Focus2018
Document Fiscal Period FocusFY
Trading SymbolTME
Entity Registrant NameTencent Music Entertainment Group
Entity Central Index Key0001744676
Current Fiscal Year End Date--12-31
Entity Well-known Seasoned IssuerNo
Entity Voluntary FilersNo
Entity Current Reporting StatusYes
Entity Filer CategoryNon-accelerated Filer
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Entity Common Stock, Shares Outstanding3,265,986,486
A Ordinary Shares
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding609,770,009
B Ordinary Shares
Document And Entity Information [Line Items]
Entity Common Stock, Shares Outstanding2,656,216,477

Consolidated Income Statements

Consolidated Income Statements - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Income Statement [Line Items]
Total revenues ¥ 18,985 ¥ 10,981 ¥ 4,361
Cost of revenues(11,708)(7,171)(3,129)
Gross profit7,277 3,810 1,232
Selling and marketing expenses(1,714)(913)(365)
General and administrative expenses(2,258)(1,521)(783)
Total operating expenses(3,972)(2,434)(1,148)
Interest income282 93 32
Other (losses)/gains, net(29)124 (13)
Share-based payments arising from issuance of ordinary shares to music label partners1,519
Operating profit2,039 1,593 103
Share of net profit/(loss) of investments accounted for using equity method(1)4 11
Fair value change on puttable shares(35)
Profit before income tax2,003 1,597 114
Income tax expense(171)(278)(29)
Profit for the year1,832 1,319 85
Attributable to:
Equity holders of the Company1,833 1,326 82
Non-controlling interests(1)(7)3
Profit for the year ¥ 1,832 ¥ 1,319 ¥ 85
Class A And Class B Ordinary Shares
Earnings per share for Class A and Class B ordinary shares
Basic ¥ 0.60 ¥ 0.51 ¥ 0.04
Diluted0.58 ¥ 0.50 ¥ 0.04
American Depositary Shares
Earnings per share for Class A and Class B ordinary shares
Basic1.19
Diluted ¥ 1.16
Online Music Services
Income Statement [Line Items]
Total revenues ¥ 5,536 ¥ 3,149 ¥ 2,144
Social Entertainment Services And Others
Income Statement [Line Items]
Total revenues ¥ 13,449 ¥ 7,832 ¥ 2,217

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Statement Of Comprehensive Income [Abstract]
Profit for the year ¥ 1,832 ¥ 1,319 ¥ 85
Other comprehensive income:
Fair value changes on financial assets at fair value through other comprehensive income(675)
Currency translation differences552 (143)42
Total Comprehensive income1,709 1,176 127
Attributable to:
Equity holders of the Company1,710 1,183 124
Non-controlling interests(1)(7)3
Total Comprehensive income ¥ 1,709 ¥ 1,176 ¥ 127

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Non-current assets
Property, plant and equipment ¥ 168 ¥ 127
Intangible assets1,763 1,717
Goodwill17,088 16,262
Investments accounted for using equity method236 378
Available-for-sale financial assets3,740
Other investments217
Financial assets at fair value through other comprehensive income3,331
Prepayments, deposits and other assets901 204
Deferred tax assets123 105
Total non-current assets23,827 22,533
Current assets
Inventories35 30
Accounts receivable1,483 1,161
Prepayments, deposits and other assets1,823 1,102
Other investments39
Short-term investments42
Cash and cash equivalents17,356 5,174
Total current assets20,778 7,467
Total assets44,605 30,000
EQUITY
Share capital2 2
Additional paid-in capital33,776 23,915
Other reserves903 997
Retained earnings3,040 1,227
Equity attributable to equity holders of the Company37,721 26,141
Non-controlling interests51 7
Total equity37,772 26,148
Non-current liabilities
Other payables241 21
Deferred tax liabilities354 304
Total non-current liabilities595 325
Current liabilities
Accounts payable1,830 1,045
Other payables and accruals2,742 1,312
Current tax liabilities235 192
Deferred revenue1,431 978
Total current liabilities6,238 3,527
Total liabilities6,833 3,852
Total equity and liabilities ¥ 44,605 ¥ 30,000

Consolidated Statements of Chan

Consolidated Statements of Changes in Equity - CNY (¥) ¥ in MillionsTotalIn associatesMusical Label PartnersShare CapitalAdditional Paid-In CapitalAdditional Paid-In CapitalIn associatesAdditional Paid-In CapitalMusical Label PartnersOther ReservesOther ReservesIn associates(Accumulated Deficits)/ Retained EarningsTotal Attributable to Equity Holders of the CompanyTotal Attributable to Equity Holders of the CompanyIn associatesTotal Attributable to Equity Holders of the CompanyMusical Label PartnersNon-Controlling InterestsNon-Controlling InterestsIn associates
Beginning balance at Dec. 31, 2015 ¥ 456 ¥ 1 ¥ 577 ¥ (122) ¥ 456
Comprehensive Income
Profit for the year85 82 82 ¥ 3
Currency translation differences42 42 42
Total Comprehensive income127 42 82 124 3
Issuance of ordinary shares for the reverse acquisition17,999 1 ¥ 17,992 17,993 6
Issuance of ordinary shares2,071 2,071 2,071
Deemed contribution (distribution) arising from carve out of Tencent PRC Music Business(189)(189)(189)
Share-based compensation-value of employee services170 170 170
Appropriation to statutory reserve17 (17)
Total transactions with equity holders at their capacity as equity holders for the year20,051 1 20,063 (2)(17)20,045 6
Ending balance at Dec. 31, 201620,634 2 20,063 617 (57)20,625 9
Comprehensive Income
Profit for the year1,319 1,326 1,326 (7)
Currency translation differences(143)(143)(143)
Total Comprehensive income1,176 (143)1,326 1,183 (7)
Deemed contribution (distribution) arising from carve out of Tencent PRC Music Business20 20 20
Issuance of ordinary shares in exchange for equity investments7,547 7,547 7,547
Distribution to Tencent(3,774)(3,774)(3,774)
Share-based compensation-value of employee services362 362 362
Share-based compensation - proceeds from shares issued79 79 79
Capital contribution from non-controlling interests5 5
Business combination99 99 99
Appropriation to statutory reserve42 (42)
Total transactions with equity holders at their capacity as equity holders for the year4,338 3,852 523 (42)4,333 5
Ending balance at Dec. 31, 201726,148 2 23,915 997 1,227 26,141 7
Comprehensive Income
Profit for the year1,832 1,833 1,833 (1)
Fair value changes on financial assets at fair value through other comprehensive income(675)(675)(675)
Currency translation differences552 552 552
Total Comprehensive income1,709 (123)1,833 1,710 (1)
Issuance of ordinary shares2,433 ¥ 241 ¥ 2,905 2,433 ¥ 1,027 ¥ 2,905 ¥ (827)2,433 ¥ 200 ¥ 2,905 ¥ 41
Share-based compensation-value of employee services840 840 840
Issuance of ordinary shares upon initial public offering3,496 3,496 3,496
Additional investment in a non-wholly owned subsidiary(4)(4)4
Appropriation to statutory reserve20 (20)
Total transactions with equity holders at their capacity as equity holders for the year9,915 9,861 29 (20)9,870 45
Ending balance at Dec. 31, 2018 ¥ 37,772 ¥ 2 ¥ 33,776 ¥ 903 ¥ 3,040 ¥ 37,721 ¥ 51

Consolidated Statements of Cash

Consolidated Statements of Cash Flows ¥ in Millions, $ in Millions12 Months Ended
Dec. 31, 2018CNY (¥)Dec. 31, 2017CNY (¥)Dec. 31, 2016CNY (¥)
Cash flows from operating activities
Cash generated from operations ¥ 5,604 ¥ 2,614 ¥ 908
Interest received249 93 32
Income taxes paid(221)(207)(67)
Net cash inflow from operating activities5,632 2,500 873
Cash flows from investing activities
Net cash acquired from/(payment for) business combination(1,090)(72)676
Cash acquired from business combinations under common control397
Payments for settlement of pre-acquisition dividends payables of CMC(19)(591)(510)
Purchase of property, plant and equipment(132)(75)(41)
Purchase of intangible assets(12)(2)
Net proceeds from short term investments11 261 371
Proceeds from disposal of investments accounted for using equity method57
Payments for acquisition of investments accounted for using equity method(140)(61)
Payments for acquisition of investments accounted for as financial assets at fair value through profit or loss(199)
Loan to a third party(5)
Purchase of additional equity interests in a subsidiary(1)
Net cash inflow/(outflow) from investing activities(1,190)(483)496
Cash flows from financing activities
Proceeds from issues of ordinary shares2,433 1,901
Proceeds from issues of puttable shares422
Proceeds from issues of ordinary shares to Music Label Partners1,386
Net proceeds from issues of ordinary shares upon initial public offering3,500
Deemed (distribution)/contributions arising from carve out of Tencent PRC Music Business20 (189)
Exercise of share options79
Net cash inflow from financing activities7,741 99 1,712
Net increase in cash and cash equivalents12,183 2,116 3,081
Cash and cash equivalents at beginning of the year5,174 3,071
Exchange losses on cash and cash equivalents(1)(13)(10)
Cash and cash equivalents at end of year ¥ 17,356 ¥ 5,174 ¥ 3,071

General information, organizati

General information, organization and basis of preparation12 Months Ended
Dec. 31, 2018
General Information Organization And Basis Of Preparation [Abstract]
General information, organization and basis of preparation1
General information, organization and basis of preparation
1.1
General information Tencent Music Entertainment Group (the “Company” or “TME”), formerly known as China Music Corporation (“CMC”), was incorporated under the laws of the Cayman Islands on June 6, 2012 as an exempted company with limited liability under the Companies Law (2010 Revision) of the Cayman Islands. The address of its registered office is Cricket Square, P.O. Box 2582, Grand Cayman KY1-1112 , The Company, its subsidiaries, its controlled structured entities (“Variable interest entities”, or “VIE”) and their subsidiaries (“Subsidiaries of VIEs”) are collectively referred to as the “Group”. The Group is principally engaged in operating online music entertainment platforms to provide music streaming, online karaoke and live streaming services in the People’s Republic of China (“PRC”). The Company does not conduct any substantive operations of its own but conducts its primary business operations through its wholly-owned subsidiaries, VIEs and subsidiaries of VIEs in the PRC.
1.2
Organization and principal activities Prior to the completion of the merger of the Company with the music business of Tencent in the PRC (“Tencent PRC Music Business”) through a reverse acquisition of the Company by Tencent PRC Music Business on July 12, 2016 as described below (the “Merger”), Tencent PRC Music Business, mainly comprise QQ Music and WeSing platforms, was operated through a number of entities controlled by Tencent while the Company prior to the Merger mainly operated two online platforms, namely Kugou and Kuwo (“CMC Music Business”). Immediately prior to the Merger, Tencent, through a wholly-owned subsidiary, Min River Investment Limited (“Min River”), held approximately 15.8% of the outstanding ordinary shares of the Company. On July 12, 2016, the Company and Min River entered into a share subscription agreement (the “Agreement”), pursuant to which the Company conditionally agreed to issue and sell to Min River, and Min River agrees to subscribe for and purchase from the Company, an aggregate of 1,290,862,550 Ordinary Shares (the “Consideration Shares”), representing 54.4% of the outstanding ordinary shares of the Company immediately after the issuance of Consideration Shares, in exchange for Tencent PRC Music Business’s related operating assets and liabilities. Upon the completion of the Merger, Min River held approximately 61.6% of the outstanding ordinary shares of the Company. The platforms of Tencent PRC Music Business are operated under subdomains of a domain controlled by Tencent. The Merger is accounted for as a reverse acquisition under International Financial Reporting Standard (“IFRS”) 3 (Revised) “Business Combination” as detailed in Note 2.1, under which Tencent PRC Music Business is regarded as the accounting acquirer, and these consolidated financial statements have been presented as a continuation of the financial statements of Tencent PRC Music Business. Immediately upon the completion of the Merger, Tencent and the Group entered into a business cooperation agreement (the “Business Cooperation Agreement”) and transferring the rights and obligations of existing contracts of Tencent PRC Music Business, which were signed by entities controlled by Tencent with other parties, to the Group. Pursuant to a special resolution in relation to the change of company name passing at the special general meeting of the Company on December 14, 2016, the name of the Company was changed from China Music Corporation to Tencent Music Entertainment Group with immediate effect.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued) As of December 31, 2018, the Company’s significant subsidiaries, VIEs, and subsidiaries of VIEs were as follows:
Place of incorporation
Date of Incorporation or acquisition
Equity Interest Held (direct or indirect)
Principal activities
Note
Subsidiaries
Tencent Music Entertainment Hong Kong Limited (“TME Hong Kong”) (formerly known as “Ocean Music Hong Kong Limited”)
Hong Kong
July 2016
100%
Investment holding and music content distribution
(i)
Tencent Music Entertainment (Beijing) Co., Ltd. (“TME Beijing”) (formerly known as “Ocean Interactive (Beijing) Information Technology Co., Ltd.”)
PRC
July 2016
100%
Technical support and consulting services
(i)
Yeelion Online Network Technology (Beijing) Co., Ltd. (‘‘Yeelion Online”)
PRC
July 2016
100%
Technical support and consulting services
(i), (ii)
Tencent Music Entertainment Technology (Shenzhen) Co., Ltd. (''TME Tech Shenzhen")
PRC
February 2017
100%
Online music and entertainment related services
(iv)
Variable Interest Entities
Guangzhou Kugou Computer Technology Co., Ltd. (“Guangzhou Kugou”)
PRC
July 2016
100%
Online music and entertainment related services
(i), (ii)
Beijing Kuwo Technology Co., Ltd.(“Beijing Kuwo”)
PRC
July 2016
100%
Online music and entertainment related services
(i), (ii)
Xizang Qiming Music Co., Ltd.(“Xizang Qiming”)
PRC
February 2018
100%
Music content investments
(v)
Subsidiaries of Variable Interest Entities
Tencent Music Entertainment (Shenzhen) Co., Ltd. (“TME Shenzhen”)
PRC
July 2016
100%
Online music and entertainment related services
(iii) Notes:
(i)
Representing the entities comprising the CMC Music Business immediately prior to the Merger completed on July 12, 2016.
(ii)
CMC Music Business acquired Yeelion Online and Guangzhou Kugou in December 2013 and April 2014, respectively. All these entities were deemed acquired by the Company on July 12, 2016 because of the Merger.
(iii)
In July 2016, Tencent Music Entertainment (Shenzhen) Co., Ltd. (“TME Shenzhen”) was established by the Group for the purpose of operating Tencent PRC Music Business.
(iv)
In February 2017, TME Tech Shenzhen was established by the Group for the purpose of operating Tencent PRC Music Business.
(v)
In February 2018, Xizang Qiming was established by the Group for the purpose of music content investments.
1
1General information, organization and basis of preparation (Continued)
2
1.2Organization and principal activities (Continued)
(i)
Apart from the significant subsidiaries, VIEs and subsidiaries of VIEs listed above, there are certain non-wholly owned subsidiaries of the Group, of which management of the Group considered that these non-wholly owned subsidiaries are not significant to the Group, accordingly, no summarized financial information of these non-wholly owned subsidiaries is presented separately. PRC laws and regulations prohibit or restrict foreign ownership of companies that provide Internet-based business, which include activities and services provided by the Group. The Group operates its business operations in the PRC through a series of contractual arrangements (“Structure Contracts”) entered into among the Company, wholly-owned subsidiaries of the Company, domestic entities (“Operating Entities”) that legally owned by individuals (“Nominee Shareholders”) authorized by the Group (collectively, “Contractual Arrangements”). The Structure Contracts including Exclusive Technology Services Agreement, Exclusive Business Cooperation Agreement, Loan Agreement, Exclusive Purchase Option Agreement, Equity Interest Pledge Agreement, and Powers of Attorney Agreement. Under the Contractual Arrangements, the Company has the power to control the management, and financial and operating policies of the VIEs, has exposure or rights to variable returns from its involvement with the VIEs, and has the ability to use its power over the VIEs to affect the amount of the returns. As a result, all these VIEs are accounted for as consolidated structured entities of the Company and their financial statements have also been consolidated by the Company. The Structured Contracts were in place prior to the Merger while have been updated at the time of the Merger. During the years ended December 31, 2017 and 2018, there was no change to the principal terms of the Structured Contracts. The principal terms of the Structured Contracts are further described below:
(a)
Contractual agreements with Beijing Kuwo Voting Trust Agreement Pursuant to the Voting Trust Agreement signed in July 2016, the shareholders of Beijing Kuwo each irrevocably granted Yeelion Online or any individual designated by Yeelion Online in writing as their attorney-in-fact to vote, the rights to vote on their behalf on all matters of Beijing Kuwo requiring shareholder approval under PRC laws and regulations and Beijing Kuwo's articles of association. The term of this agreement will remain effective as long as the shareholders continue to hold equity interests in Beijing Kuwo. Exclusive Technical Service Agreement Pursuant to the exclusive technical service agreement between Yeelion Online and Beijing Kuwo signed in July 2016, Yeelion Online or its designated party has the exclusive right to provide business support, technical services and consulting services in return for a service fee, which represents 90% of net operating income of Beijing Kuwo together with other service fees charged for other ad hoc services provided. Yeelion has the discretion to change the charge rate. During the term of the agreement, without Yeelion Online’s prior written consent, Beijing Kuwo shall not engage any third party for any of such services provided under this agreement. The term for the agreement is 20 years. Loan agreement Under the loan agreement between Yeelion Online and the shareholders of Beijing Kuwo in place at the time of the Merger, Yeelion Online provided interest-free loans to the shareholders of Beijing Kuwo solely for the subscription of newly registered capital of Beijing Kuwo. Yeelion Online has the sole discretion to determine the way of repayment, including requiring the shareholders to transfer their equity shares in Beijing Kuwo to Yeelion Online according to the terms indicated in the Exclusive Share Purchase Option as after mentioned. The term for the loan was extended to 20 years starting from July 2016.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued)
(a)
Contractual agreements with Beijing Kuwo (Continued) Exclusive option agreement Pursuant to the exclusive purchase option agreement amongst Yeelion Online, Beijing Kuwo and its shareholders, the shareholders of Beijing Kuwo granted Yeelion Online or its designated party, an exclusive irrevocable option to purchase, all or part of the equity interests held by its shareholders, when and to the extent permitted under PRC law, at a price equal to the proportional amount of registered capital of Beijing Kuwo. Without the consent of Yeelion Online or its designated party, the shareholders of Beijing Kuwo may not transfer, donate, pledge, or otherwise dispose of their equity shareholdings in any way. In addition, the shareholders granted TME Beijing or its designated party, an exclusive irrevocable option to purchase, all or part of the assets of Beijing Kuwo at a price equal to the carrying amount of Beijing Kuwo at the time of purchase. The exclusive purchase option agreement remains effective until the options are exercised. Equity interest pledge agreement Pursuant to the equity interest pledge agreement amongst Yeelion Online, Beijing Kuwo and its shareholders, the shareholders of Beijing Kuwo pledge all of their equity interests in Beijing Kuwo to Yeelion Online, to guarantee Beijing Kuwo and its shareholders' performance of their obligations under exclusive purchase option agreement, exclusive business cooperation agreement, loan agreement, and powers of attorney. If Beijing Kuwo and/or any of its shareholders breach their contractual obligations under this agreement, Yeelion Online, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Without Yeelion Online' s prior written consent, shareholders of Beijing Kuwo shall not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice Yeelion Online's interests. During the term of this agreement, Yeelion Online is entitled to receive all of the dividends and profits paid on the pledged equity interests. The equity interest pledge will be effective upon the completion of the registration of the pledge with the competent local branch of the State Administration for Industry and Commerce ("SAIC"), and will remain effective until Beijing Kuwo and its shareholders discharge all their obligations under the Contractual Arrangements. Capital subscription agreement Pursuant to the capital subscription agreement amongst Beijing Kuwo and Linzhi Lichuang Information Technology Co., Ltd. (“Linzhi Lichuang”), an affiliate of Tencent, signed in July 2016, Linzhi Lichuang shall provide capital to Beijing Kuwo for share subscription of Beijing Kuwo in connection with the Agreement. Linzhi Lichuang, as a shareholder of Beijing Kuwo, also signed aforementioned Contractual Agreements except for the loan agreement accordingly.
(b)
Contractual agreements with Guangzhou Kugou Agreement on authorization to exercise shareholders voting right Pursuant to the powers of attorney agreement signed in July 2016, the shareholders of Guangzhou Kugou each irrevocably granted TME Beijing or any individual designated by TME Beijing in writing as their attorney-in-fact to vote, the rights to vote on their behalf on all matters of Guangzhou Kugou requiring shareholder approval under PRC laws and regulations and Guangzhou Kugou's articles of association. The term of this agreement will remain effective as long as the shareholders continue to hold equity interests in Guangzhou Kugou.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued)
(b)
Contractual agreements with Guangzhou Kugou (Continued) Exclusive technical service agreement Pursuant to the exclusive technical service agreement between TME Beijing and Guangzhou Kugou signed in July 2016, TME Beijing or its designated party has the exclusive right to provide technical and consulting services in return for a service fee, which represents 90% of net operating income of Guangzhou Kugou, together with other service fees charged for other ad hoc services provided. TME Beijing has the discretion to change the charge rate. During the term of the agreement, without TME Beijing's prior written consent, Guangzhou Kugou shall not engage any third party for any of such services provided under this agreement. The term of this agreement is 20 years. Loan agreement Under the loan agreement between TME Beijing and the shareholders of Guangzhou Kugou, signed in April 2014, TME Beijing provided interest-free loans to the shareholders of Guangzhou Kugou solely for the subscription of newly registered capital of Guangzhou Kugou. The loans can be repaid only with the proceeds from the sale of all of the equity interest in Guangzhou Kugou to TME Beijing or its designated representative(s). The term of each loan is 20 years from the first withdrawal of such loan by Guangzhou Kugou’s shareholders. Exclusive purchase option agreement Pursuant to the exclusive purchase option agreement amongst TME Beijing, Guangzhou Kugou and its shareholders, the shareholders granted TME Beijing or its designated party, an exclusive irrevocable option to purchase, all or part of the equity interests held by its shareholders, when and to the extent permitted under PRC law, at a price equal to the proportional amount of registered capital of Guangzhou Kugou. Without the consent of TME Beijing or its designated party, the shareholders may not transfer, donate, pledge, or otherwise dispose of their equity shareholdings in any way. In addition, the shareholders granted TME Beijing or its designated party, an exclusive irrevocable option to purchase, all or part of the assets of Guangzhou Kugou at a price equal to the carrying amount of Guangzhou Kugou at the time of purchase. The exclusive purchase option agreement remains effective until the options are exercised. Equity interest pledge agreement Pursuant to the equity interest pledge agreement amongst TME Beijing, Guangzhou Kugou and its shareholders, the shareholders of Guangzhou Kugou pledge all of their equity interests in Guangzhou Kugou to TME Beijing, to guarantee Guangzhou Kugou and its shareholders' performance of their obligations under exclusive purchase option agreement, exclusive technical service agreement, loan agreement, and powers of attorney. If Guangzhou Kugou and/or any of its shareholders breach their contractual obligations under this agreement, TME Beijing, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Without TME Beijing's prior written consent, shareholders of Guangzhou Kugou shall not transfer or assign the pledged equity interests, or create or allow any encumbrance that would prejudice TME Beijing's interests. During the term of this agreement, TME Beijing is entitled to receive all the dividends and profits paid on the pledged equity interests. The equity interest pledge will be effective upon the completion of the registration of the pledge with the competent local branch of the State Administration for Industry and Commerce ("SAIC"), and will remain effective until Guangzhou Kugou and its shareholders discharge all their obligations under the contractual arrangements.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued)
(b)
Contractual agreements with Guangzhou Kugou (Continued) Capital subscription agreement Pursuant to the capital subscription agreement amongst Guangzhou Kugou and Linzhi Lichuang Information Technology Co., Ltd. (“Linzhi Lichuang”), an affiliate of Tencent, signed in July 2016, Linzhi Lichuang shall provide capital to Guangzhou Kugou for share subscription of Guangzhou Kugou in connection with the Agreement. Linzhi Lichuang, as a shareholder of Guangzhou Kugou, also signed aforementioned Contractual Agreements except for loan agreement accordingly. Similar Structure Contracts were also executed for other Operating Entities established or acquired by the Group similar to the above and consolidated by the Company.
(c)
Risks in relation to the VIEs In the opinion of the Company's management, the contractual arrangements discussed above have resulted in the Company, Yeelion Online, and TME Beijing having the power to direct activities that most significantly impact the VIEs, including appointing key management, setting up operating policies, exerting financial controls and transferring profit or assets out of the VIEs at its discretion. The Company has the power to direct activities of the VIEs and can have assets transferred out of the VIEs under its control. Therefore, the Company considers that there is no asset in any of the VIEs that can be used only to settle obligations of the VIEs, except for registered capital, capital reserve and PRC statutory reserves of the VIEs totaling RMB3,249 million and RMB4,432 million as of December 31, 2017 and 2018, respectively. Currently there is no contractual arrangement that could require the Company to provide additional financial support to the VIEs. As the Company is conducting its Internet-related business mainly through the VIEs, the Company may provide such support on a discretional basis in the future, which could expose the Company to a loss. As the VIEs organized in the PRC were established as limited liability companies under PRC law, their creditors do not have recourse to the general credit of TME Beijing and Yeelion Online for the liabilities of the VIEs, and TME Beijing and Yeelion Online does not have the obligation to assume the liabilities of these VIEs. The Company determines that the Contractual Arrangements are in compliance with PRC law and are legally enforceable. However, uncertainties in the PRC legal system could limit the Group's ability to enforce the Contractual Arrangements. On January 19, 2015, the Ministry of Commerce of the PRC ("MOFCOM"), released for public comment a proposed PRC law, the Draft FIE Law, that appears to include Consolidated VIEs within the scope of entities that could be considered as foreign invested enterprises, or FIEs, that would be subject to restrictions under existing PRC law on foreign investment in certain categories of industry. Specifically, the Draft FIE Law introduces the concept of "actual control" for determining whether an entity is considered to be an FIE. In addition to control through direct or indirect ownership or equity, the Draft FIE Law includes control through contractual arrangements within the definition of "actual control." The Draft FIE Law includes provisions that would exempt from the definition of foreign invested enterprises entities where the ultimate controlling shareholders are either entities organized under PRC law or individuals who are PRC citizens. The Draft FIE Law is silent as to what type of enforcement action might be taken against existing entities that operate in restricted or prohibited industries and are not controlled by entities organized under PRC law or individuals who are PRC citizens. If the restrictions and prohibitions on foreign invested enterprises included in the Draft FIE Law are enacted and enforced in their current form, the Company's ability to use the Contractual Arrangements and the Company's ability to conduct business through them could be severely limited.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued)
(c)
Risks in relation to the VIEs (Continued) The Company's ability to control VIEs also depends on rights provided to TME Beijing and Yeelion Online, under the powers of attorney agreement, to vote on all matters requiring shareholder approval. As noted above, the Company believes these powers of attorney agreements are legally enforceable, but they may not be as effective as direct equity ownership. In addition, if the corporate structure of the Group or the contractual arrangements between the TME Beijing or Yeelion Online, the VIEs and their respective shareholders were found to be in violation of any existing PRC laws and regulations, the relevant PRC regulatory authorities could:

revoke the Group’s business and operating licenses;

require the Group to discontinue or restrict its operations;

restrict the Group’s right to collect revenues;

block the Group’s websites;

require the Group to restructure the operations, re-apply for the necessary licenses or relocate its businesses, staff and assets;

impose additional conditions or requirements with which the Group may not be able to comply; or

take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. The following are major financial statements amounts and balances of the Group’s VIEs and subsidiaries of VIEs as of December 31, 2017 and 2018 and for the years ended December 31, 2016, 2017 and 2018.
As at December 31,
2017
2018
RMB’million
RMB’million
Total current assets
6,205
7,199
Total non-current assets
3,872
5,902
Total assets
10,077
13,101
Total current liabilities
(4,661
)
(5,664
)
Total non-current liabilities
(304
)
(562
)
Total liabilities
(4,965
)
(6,226
)
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Total net revenues
3,007
10,948
18,966
Net profit
61
340
1,333
Net cash inflow/(outflow) from operating activities
842
1,763
(334
)
Net cash inflow/(outflow) from investing activities
570
131
(1,244
)
Net cash flow from financing activities
-
-
-
Net increase/(decrease) in cash and cash equivalents
1,412
1,894
(1,578
)
Cash and cash equivalents, beginning of the year
-
1,412
3,306
Cash and cash equivalents, end of the year
1,412
3,306
1,728
The above financial statements amounts and balances have included intercompany transactions which have been eliminated on the Company's consolidated financial statements.
1
General information, organization and basis of preparation (Continued)
1.2
Organization and principal activities (Continued)
(c)
Risks in relation to the VIEs (Continued) As of December 31, 2017 and 2018, the total assets of Group's VIEs were mainly consisting of cash and cash equivalents, accounts receivable, prepayments, deposits and other current assets and intangible assets. As of December 31, 2017 and 2018, the total liabilities of VIEs were mainly consisting of accounts payable, accrued expenses and other current liabilities. The recognized revenue-producing assets held by the Group's VIEs include intangible assets acquired through business combination, prepaid content royalties and domain names, servers and leasehold improvements relating to office facilities. The balances of these assets as of December 31, 2017 and 2018 were included in the line of "Total non- current assets" in the table above. The unrecognized revenue-producing assets held by the Group's VIEs mainly consist of intellectual property, licenses, and trademarks that the Group relies on to operate its businesses.

Summary of Significant Accounti

Summary of Significant Accounting Policies12 Months Ended
Dec. 31, 2018
Disclosure Of Significant Accounting Policies [Abstract]
Summary of significant accounting policies2
Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1
Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with the International Financial Reporting Standards (“IFRSs”) as issued by International Accounting Standards Board (“IASB”). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of other investments, financial assets at fair value through other comprehensive income and short-term investments, which are carried at fair value. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
(a)
Carve out financial information of Tencent PRC Music Business As stated in Note 1.2 above, immediately prior to the Merger, the Tencent PRC Music Business was held and operated by a number of entities controlled by Tencent, and did not exist as a separate legally constituted group. Accordingly, the financial position and performance of the Tencent PRC Music Business for the period from January 1, 2016 to July 12, 2016 (the “Carve-out Period”) which included in the year ended December 31, 2016 is prepared using the carrying values of Tencent PRC Music Business on a standalone basis from Tencent’s perspective. During the Carve-out Period, the financial information of Tencent PRC Music Business is derived from the historical accounting records of Tencent on the following basis:
(i)
Income statement of the Tencent PRC Music Business for the Carve-out Period includes all revenues, related costs, expenses and charges directly generated or incurred by the Tencent PRC Music Business. Balance sheet of the Tencent PRC Music Business include the assets and liabilities that are directly related and clearly identified to the Tencent PRC Music Business.
2
Summary of significant accounting policies (Continued)
1
Basis of preparation (Continued)
(a)
Carve out financial information of Tencent PRC Music Business (Continued)
(ii)
Any funding received from/paid to Tencent and its group entities/operations other than the Tencent PRC Music Business in the Carve-out Period are treated as deemed capital contribution or return of contributions within the equity. Accounts receivable and other current assets, and accounts payable and other current liabilities received or settled by Tencent are also treated as deemed capital contribution or return of contributions within the equity.
(iii)
Certain common operating and administrative expense incurred by the Tencent PRC Music Business in conjunction with other business operations of Tencent, including financial, human resources, office administration and other support functions are reallocated to the Tencent PRC Music Business primarily based on certain pre- determined charge rates per headcount of the Tencent PRC Music Business, which management believes represent a reasonable allocation methodology as these charge rates are consistent across Tencent.
(iv)
The retained earnings/accumulated deficits within the equity represents the deficit or excess of total assets over total liabilities during the Carve-out Period. The financial information for the Carve-out Period may not necessarily be indicative of the Tencent PRC Music Business’ financial position, results of operating activities or cash flows had it operated as a separate entity throughout the Carve-out Period presented or for future periods.
(b)
Reverse Acquisition of CMC Under the reverse acquisition accounting, these consolidated financial statements represent the continuation of the financial statements of the Tencent PRC Music Business (being the legal acquiree and accounting acquirer) except for its capital structure, which reflect the following:
(i)
the assets and liabilities of the legal acquiree (the accounting acquirer) recognized and measured at their pre-combination carrying amounts;
(ii)
the assets and liabilities of the legal parent (the accounting acquiree) recognized and measured at their fair value as at July 12, 2016, the date of the reverse acquisition in accordance with IFRS 3;
(iii)
the retained earnings and other equity balances of the legal acquiree before the business combination; and
(iv)
the amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal acquiree (the accounting acquirer) outstanding immediately before the business combination to the fair value of the legal parent (accounting acquiree) measured at fair value as at July 12, 2016. However, the equity structure reflects the equity structure of the legal parent (the accounting acquiree), including the equity interests the legal parent issued to effect the Merger. Accordingly, the equity structure of the legal acquiree (the accounting acquirer) is restated using the exchange ratio established in the acquisition agreement to reflect 1,290,862,550 shares of the legal parent (the accounting acquiree) issued in the Merger. In applying the reverse acquisition accounting, the consideration deemed to be given by the Tencent PRC Music Business was RMB 17,999 million, which is the fair value of the Company immediately prior to the Merger. The separately identifiable assets and liabilities of the accounting acquiree recognized in the consolidated statement of financial position were at their fair value as at the date of the reverse acquisition. Goodwill arising from the Merger was recognized on the same date. The results and cash flows of the accounting acquiree are included in the Company's consolidated financial statements from the date of the Merger. Further details are disclosed in Note 24(a).
2
Summary of significant accounting policies (Continued)
2.2New and amendments to the accounting standards adopted and recent accounting pronouncements
(a)
New and amendments to the accounting standards adopted New and amendments to the standards that effective for the year ended December 31, 2018 do not have a material impact on these consolidated financial statements except IFRS 9 “Financial Instruments”, details of which are set out below: IFRS 9 “Financial instruments” addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Group has reviewed its financial assets and liabilities and adopted the IFRS 9 on January 1, 2018: Classification and measurement of financial instruments From January 1, 2018, the Group classifies its financial assets in the following categories:

those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and

those to be measured at amortized cost. The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. The Group reclassifies debt investments when and only when its business model for managing those assets changes. The effects of the reclassification upon the adoption of IFRS 9 are as below:
Financial assets
at fair value
Available-for-
through other
sale financial
comprehensive
Other
assets
income
investments
RMB’million
RMB’million
RMB’million
At December 31, 2017, as previously reported
3,740
-
-
Reclassification
(3,740
)
3,730
10
At January 1, 2018
-
3,730
10
Other investments represent the financial assets at fair value through profit or loss. There was no impact on the Group’s accounting for financial liabilities as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss, while the Group does not have any such liabilities.
2
Summary of significant accounting policies (Continued)
2.2New and amendments to the accounting standards adopted and recent accounting pronouncements (Continued)
(a)
New and amendments to the accounting standards adopted (Continued) Impairment of financial assets The new impairment model requires the recognition of impairment provisions based on expected credit losses rather than only incurred credit losses as is the case under IAS 39, which is the simplified method. It applies to financial assets classified at amortized cost, debt instruments measured at fair value through other comprehensive income, contract assets under IFRS 15, lease receivables, loan commitments and certain financial guarantee contracts. The changes in the loss allowance for account receivables under the new impairment model was immaterial.
(b)
Recent accounting pronouncements A number of new standards and amendments to standards have not come into effect for the financial year beginning January 1, 2018, and have not been early adopted by the Group in preparing these consolidated financial statements. IFRS 16 will result in almost all leases being recognized on the statement of financial position, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short term and low-value leases. The accounting for lessors will not be significantly changed. The standard will affect primarily the accounting for Group’s operating leases. The Group will apply the standard from its mandatory adoption date of January 1, 2019. The Group intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption. All right-of-use assets will be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses). The Group expects to recognize right-of-use assets of approximately RMB100 millions and lease liabilities of RMB97 millions on January 1, 2019. The Group expects that net profit after tax will not be materially changed as a result of adopting the new rules. The adoption of new standard will also result in certain reclassification of operating cash flows and financing cash flows. The Group’s activities as a lessor are not material and hence the Group does not expect any significant impact on the consolidated financial statements. IFRS 3 (amendment) clarifies the definition of business. Under the new amendment, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The new amendment is mandatory for which the acquisition date is on or after January 1, 2020. The Group does not intend to adopt this standard before its effective date. Apart from the above, other new standards and amendments to standards are not expected to have a significant effect on the consolidated financial information of the Group.
2
Summary of significant accounting policies (Continued)
2.3
Principles of consolidation and equity accounting
(a)
Subsidiaries Subsidiaries are all entities (including VIEs as stated in Note 1.2 above) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and balance sheet, respectively.
(b)
Associates Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (d) below), after initially being recognized at cost. Interests in associates are accounted for using the equity method of accounting (see (d) below), after initially being recognized at cost in the consolidated balance sheet.
(c)
Joint ventures Interests in joint ventures are accounted for using the equity method (see (d) below), after initially being recognised at cost in the consolidated balance sheet.
(d)
Equity accounting Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses of the investee in profit or loss, and the Group's share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. When the Group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group's interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group. The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in note 2.10 whenever there is an indication that the carrying amount may be impaired in accordance with note 2.11 (b).
2
Summary of significant accounting policies (Continued)
2.4
Business combinations The acquisition method of accounting is used to account for all business combinations except for the business combinations under common control as stated below, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

fair values of the assets transferred

liabilities incurred to the former owners of the acquired business

equity interests issued by the Group

fair value of any asset or liability resulting from a contingent consideration arrangement, and

fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by- acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets. Acquisition-related costs are expensed as incurred. The excess of the

consideration transferred,

amount of any non-controlling interest in the acquired entity, and

acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.
Business combination under common control The Group accounts for the business combination between entities under common control using the predecessor accounting. For predecessor accounting:

Assets and liabilities of the acquired entity are stated at predecessor carrying values. Fair value measurement is not required.

No new goodwill arises in predecessor accounting.

Any difference between the consideration given and the aggregate carrying value of the assets and liabilities of the acquired entity at the date of the transaction is included in equity in retained earnings or in a separate reserve. The Group does not restate any assets and liabilities of the acquired entity. The assets and liabilities of the acquired entity are consolidated using the predecessor’s amounts from the controlling party’s perspective. No new goodwill is recorded. Any difference between the cost of investment and the carrying value of the net assets is recorded in equity as merger reserve. The Group elects to incorporate the acquired entity’s results only from the date on which the business combination between entities under common control occurred. Consequently, the consolidated financial statements do not reflect the results of the acquired entity for the period before the transaction occurred. The corresponding amount for the previous year are also not restated.
2
Summary of significant accounting policies (Continued)
2.5
Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments and making strategic decisions. The Group's chief operating decision makers have been identified as the executive directors of the Company, who review the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group as a whole. For the purpose of internal reporting and management's operation review, the chief operating decision-makers and management personnel do not segregate the Group's business by product or service lines. Hence, the Group has only one operating segment. In addition, the Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group's assets and liabilities are substantially located in the PRC, substantially all revenues are earned and substantially all expenses are incurred in the PRC, no geographical segments are presented.
2.6
b)
Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currency of the Company is United States Dollars (“US$”). As the major operations of the Group are within the PRC, the Group presents its consolidated financial statements in Renminbi (“RMB”), unless otherwise stated.
c)
Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in the income statement. Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within fair value change on liabilities of puttable shares. All other foreign exchange gains and losses are presented in the income statement on a net basis within other (losses)/gains, net.
d)
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet

income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Currency translation differences arising are recognized in other comprehensive income.
2
Summary of significant accounting policies (Continued)
2.7
Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:
Servers and network equipment
3 - 5 years
Office furniture, equipment and others
3 - 5 years
Leasehold improvements
Shorter of expected lives of leasehold improvements and lease term The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2.10). Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the income statement.
2.8
Goodwill Goodwill is measured as described in Note 2.10. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units (“CGUs”) for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.
2.9
(a)
Domain name, trademark and Internet audio/video program transmission license Separately acquired domain name, trademark and Internet audio/video program transmission license are shown at historical cost. These assets acquired in a business combination are recognized at fair value at the acquisition date. Domain name, trademark and Internet audio/video program transmission license have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight- line method to allocate the cost of these assets and over their respective useful live of no more than 12 years. The useful lives of these assets are the periods over which they are expected to be available for use by the Group, and the management of the Group also take into account of past experience when estimating the useful lives.
2
Summary of significant accounting policies (Continued)
2.9
(b)
Other intangible assets acquired in a business combination Other intangible assets acquired in a business combination are recognized initially at fair value at the acquisition date and subsequently carried at the amount initially recognized less accumulated amortization and impairment loss, if any. Amortization is calculated using the straight-line method to allocate the costs of acquired intangible assets over the following estimated useful lives:
Online users
1 year
Corporate customer relationship
3 - 4 years
Supplier resources
3 - 6 years
Non-compete agreements
4 - 5 years
Copyrights
2 - 5 years
2.10
Impairment of non-financial assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment review on the goodwill of the Group is conducted by the management as at December 31 according to IAS 36 "Impairment of assets". An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
2.11
Investments and other financial assets
(a)
Classification and measurement From January 1, 2018, the Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

those to be measured at amortized cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. The Group reclassifies debt investments when and only when its business model for managing those assets changes. Purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
2
Summary of significant accounting policies (Continued)
2.11
Investments and other financial assets (Continued)
(a)
Classification and measurement (Continued) At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. Debt instruments Initial recognition and subsequent measurement of debt instruments depend on the Group’s business model for managing the asset and the contractual cash flow characteristics of the asset. There are three categories into which the Group classifies its debt instruments:

Amortized cost: Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are classified as and measured at amortized cost. A gain or loss on a debt investment measured at amortized cost which is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is recognized using the effective interest rate method.

Fair value through other comprehensive income: Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are classified as and measured at fair value through other comprehensive income. Movements in the carrying amount of these financial assets are taken through other comprehensive income, except for the recognition of impairment losses or reversals, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss and recognized in “other (losses)/gains, net” in the consolidated income statement. Interest income from these financial assets is recognized using the effective interest rate method. Foreign exchange gains and losses and impairment losses or reversals are presented in “other (losses)/gains, net”.

Fair value through profit or loss: Financial assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are classified as and measured at fair value through profit or loss. A gain or loss on a debt investment measured at fair value through profit or loss which is not part of a hedging relationship is recognized in profit or loss and presented in “other (losses)/ gains, net” for the period in which it arises. Equity instruments The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognized in “other (losses)/gains, net” fair value through other comprehensive income
2
Summary of significant accounting policies (Continued)
2.11
Investments and other financial assets (Continued)
(b)
Impairment From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised

Financial Risk Management

Financial Risk Management12 Months Ended
Dec. 31, 2018
Financial Risk Management [Abstract]
Financial Risk Management3
Financial risk management
3.1
Financial risk factors The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management strategy seeks to minimize the potential adverse effects on the financial performance of the Group. Risk management is carried out by the senior management of the Group.
(a)
Market risk
(ii)
Foreign exchange risk The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to RMB and US$. Foreign exchange risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency that is not the respective functional currency of the Group’s subsidiaries. The functional currency of the Company and majority of its overseas subsidiaries is USD whereas the functional currency of the subsidiaries which operate in the PRC is RMB. The Group currently does not hedge transactions undertaken in foreign currencies but manages its foreign exchange risk by performing regular reviews of the Group’s net foreign exchange exposures. If RMB had strengthened/weakened by 5% against US$ with all other variables held constant, the post-tax profit would have been RMB14 million higher/lower and RMB7 million higher/lower, for the years ended December 31, 2017 and 2018, respectively, as a result of net foreign exchange gains/losses on translation of net monetary assets denominated in RMB/US$ which is not the functional currencies of the respective Group’s entities.
(iii)
Price risk The Group is exposed to price risk because of investments held by the Group, which were classified as available-for-sale financial assets for 2017 and financial assets at fair value through other comprehensive income for 2018. The Group is not exposed to commodity price risk. The sensitivity analysis is determined based on the exposure to equity price risk of available-for-sale financial assets at the end of each reporting period. If equity prices of the respective instruments held by the Group had been 5% higher/lower, the other comprehensive income would have been approximately RMB187 million and RMB167 million higher/lower, for the years ended December 31, 2017 and 2018, respectively.
3
Financial risk management (Continued)
3.1
Financial risk factors (Continued)
(a)
Market risk (Continued)
(i ii )
Interest rate risk Other than term deposits with initial terms of over three months and cash and cash equivalents, the Group has no other significant interest-bearing assets. The directors of the Company do not anticipate there is any significant impact to interest-bearing assets resulted from the changes in interest rates, because the interest rates of these assets are not expected to change significantly.
(b)
Credit risk The Group is exposed to credit risk in relation to its cash and cash deposits (including term deposits) placed with banks and financial institutions, short-term investments, as well as accounts and other receivables. The carrying amount of each class of these financial assets represents the Group’s maximum exposure to credit risk in relation to the corresponding class of financial assets. The Group has policies in place to ensure that credit terms are granted to counterparties, including customers for contents sublicenses, advertising agencies, third parties platforms as well as entities under Tencent, with an appropriate credit history and the Group performs periodic credit evaluations of these counterparties. Management does not expect any loss arising from non- performance by these counterparties. Customers for contents sublicenses and the third parties platforms are reputable corporations with sound financial position. The credit quality of the advertising agencies are assessed on a regular basis based on historical settlement records and past experience. Provisions are made for past due balances when management considers the loss from the counterparties is likely. The Group’s historical experience in collection of receivables falls within the recorded allowances. In addition, deposits are only placed with reputable domestic or international financial institutions. There has been no recent history of default in relation to these financial institutions. Top five customers accounted for 21% of gross accounts receivable comprise of 12%, 3%, 2%, 2% and 2% from these top five customers as of December 31, 2018. Nevertheless no single external customer amount to more than 10% of the revenue of the Group for the year ended December 31, 2018.
(c)
Liquidity risk The Group aims to maintain sufficient cash and cash equivalents and short-term investments to meet financial obligations when due. Management monitors rolling forecasts of the Group’s liquidity requirements on the basis of expected cash flows and considering the maturities of financial assets and financial liabilities. As of December 31, 2017 and 2018, the Group did not have any external borrowings and majority of its financial liabilities, mainly comprise of accounts payable and other payables and accruals, are due for settlement contractually within 12 months and the contractual undiscounted cash outflow of the Group’s financial liabilities approximates their carrying amounts included in the consolidated balance sheet.
3.2
Capital risk management The Group’s objectives on managing capital are to safeguard the Group’s ability to continue as a going concern and support the sustainable growth of the Group in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to enhance shareholders’ value in the long term. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. In the opinion of the directors of the Company, the Group’s capital risk is low.
3
Financial risk management (Continued)
3.3
Fair value estimation The table below analyses the Group’s financial instruments carried at fair value as of December 31, 2017 and 2018 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:

Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and

Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The Group’s financial instruments carried at fair values comprised short-term investments, available-for-sale financial assets, financial assets at fair value through other comprehensive income and other investments stated in the consolidated balance sheets as of December 31, 2017 and 2018 were measured at level 2 and level 3 fair value hierarchy, respectively. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required for evaluating the fair value of a financial instrument are observable, the instrument is included in level 2. If one or more of the significant inputs are not based on observable market data, the instrument is included in level 3. The Group has a team of personnel who performs valuation on these level 3 instruments for financial reporting purposes. The team adopts various valuation techniques to determine the fair value of the Group’s level 3 instruments. External valuation experts may also be involved and consulted when it is necessary. The components of the level 3 instruments mainly include investments in private investment funds and unlisted companies. As these instruments are not traded in an active market, their fair values have been determined using various applicable valuation techniques, including discounted cash flows approach and comparable transactions approach, etc. Major assumptions used in the valuation include historical financial results, assumptions about future growth rates, estimates of weighted average cost of capital (WACC), recent market transactions, discount for lack of marketability and other exposure etc. The fair value of these instruments determined by the Group requires significant judgement, including the likelihood of non-performing by the investee companies, financial performance of the investee companies, market value of comparable companies as well as discount rate, etc. During the years ended December 31, 2017 and 2018, there was no transfer between level 1 and 2 for recurring fair value measurements. Movement of the available-for-sale financial assets and financial assets at fair value that using level 3 measurements have been presented in Note 14 and Note 15, respectively.

Critical accounting estimates a

Critical accounting estimates and judgments12 Months Ended
Dec. 31, 2018
Default Root [Abstract]
Disclosure of changes in accounting policies, accounting estimates and errors [text block]4
Critical accounting estimates and judgments The preparation of financial statements requires the use of accounting estimates which, by definition, will seldom equal the actual results. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
(a)
Consolidation of VIEs As disclosed in Note 1.2, the Group exercises control over the VIEs and has the right to recognize and receive substantially all the economic benefits through the Contractual Arrangements. The Group considers that it controls the VIEs notwithstanding the fact that it does not hold direct equity interests in the VIEs, as it has power over the financial and operating policies of the VIEs and receive substantially all the economic benefits from the business activities of the VIEs through the Contractual Arrangements. Accordingly, all these VIEs are accounted for as controlled structured entities and their financial statements have also been consolidated by the Company.
4
Critical accounting estimates and judgments (Continued)
(b)
The estimates of the lifespans of durable virtual gifts Users purchase certain durable virtual gifts on the Group's online karaoke and live streaming platforms and the relevant revenue is recognized based on the estimated lifespans of the virtual gifts. The estimated lifespans are determined by the management based on the expected service period derived from historical data of user relationship period. Significant judgements are required in determining the expected user relationship periods, including but not limited to historical users' activities patterns and churn out rate. The Group has adopted a policy of assessing the estimated lifespans of virtual gifts on a regular basis whenever there is any indication of change in the expected user relationship periods. Any change in the estimates may result in the revenue being recognized on a different basis from that in prior periods.
(c)
Business combination In business combinations, the Group allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. See Note 24.
(d)
Share-based compensation arrangements The Group measures the cost of equity-settled transactions with employees and non- employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is estimated using a model which requires the determination of the appropriate inputs. The Group has to estimate the expected yearly percentage of grantees that will stay within the Group at the end of vesting periods of the options and awarded shares (the “Expected Retention Rate”) in order to determine the amount of share- based compensation expenses charged to the consolidated income statement. The assumptions and models used for estimating the fair value of share-based payment transactions are disclosed in Note 21.
(e)
Income taxes The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact current income tax and deferred income tax in the period in which such determination is made.

Revenue

Revenue12 Months Ended
Dec. 31, 2018
Revenue [Abstract]
Revenue5
Revenue During the years ended December 31, 2016, 2017 and 2018, revenue contributed from subscription packages amounted to RMB1,279 million, RMB 1,841 million and RMB2,499 million, respectively.
As of December 2017 and 2018, contracts costs related to contracts with customers are not material to the Group. Details of contract liabilities were disclosed in Note 23.

Other (losses)_gains, net

Other (losses)/gains, net12 Months Ended
Dec. 31, 2018
Other Gains Losses [Abstract]
Other (losses)/gains, net6
Other (losses)/gains, net
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Government grants (note)
9
30
52
Impairment provision for investments in associates
-
(2
)
(2
)
Net foreign exchange (losses)/gains
(23
)
18
(31
)
Gain on step-up acquisition arising from business combination (Note 24(b))
-
72
-
Fair value change of financial assets
-
-
(30
)
Others
1
6
(18
)
(13
)
124
(29
) Note: There are no unfulfilled conditions or contingencies related to these subsidies.

Expense by nature

Expense by nature12 Months Ended
Dec. 31, 2018
Default Root [Abstract]
Expense by nature7
Expense by nature
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Service costs (note i)
2,481
6,142
10,323
Advertising agency fees
151
188
204
Employee benefits expenses (note ii and note iii)
721
1,373
2,077
Promotion and advertising expenses
193
660
1,511
Operating lease rentals in respect of office buildings
23
48
56
Notes:
(i)
Service costs mainly comprise of licensing costs, revenue sharing fees paid to content creators and content delivery costs relating primarily to server, cloud services and bandwidth costs.
(ii)
During the years ended December 31, 2016, 2017 and 2018, the Group incurred expenses for the purpose of research and development of approximately RMB449 million, RMB797 million and RMB937 million, which comprised employee benefits expenses of RMB402 million, RMB724 million and RMB825 million, respectively. No significant development expenses had been capitalized for the years ended December 31, 2016, 2017 and 2018.
(iii)
Employee benefits expenses
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Wages, salaries and bonuses
335
723
1,228
Welfare, medical and other expenses
184
204
293
Share-based compensation expenses
170
384
487
Contribution to pension plans
32
62
69
721
1,373
2,077
Majority of the Group's contributions to pension plans are related to the local employees in the PRC. All local employees of the subsidiaries in the PRC participate in employee social security plans established in the PRC, which cover pension, medical and other welfare benefits. The plans are organized and administered by the governmental authorities. Other than the contributions made to these social security plans, the Group has no other material commitments owing to the employees. According to the relevant regulations, the portion of premium and welfare benefit contributions that should be borne by the companies within the Group as required by the above social security plans are principally determined based on percentages of the basic salaries of employees, subject to certain ceilings imposed. These contributions are paid to the respective labor and social welfare authorities and are expensed as incurred.

Taxation

Taxation12 Months Ended
Dec. 31, 2018
Major Components Of Tax Expense Income [Abstract]
Taxation8
Taxation
(a)
Income tax expense Income tax expense is recognized based on management’s best knowledge of the income tax rates expected for the financial year.
(iv)
Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gains. Additionally, upon payment of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.
8
Taxation (Continued)
(a)
Income tax expense (Continued)
(v)
Hong Kong Under the current tax laws of Hong Kong, TME HK is subject to Hong Kong profits tax at 16.5% on its taxable income generated from the operations in Hong Kong. Dividends from TME HK is exempted from withholding tax.
(iii)
PRC Under the Corporate Income Tax (“CIT”) Law, foreign invested enterprises and domestic enterprises are subject to a unified CIT rate of 25%. In accordance with the implementation rules of the CIT Law, a qualified “High and New Technology Enterprise” (“HNTE”) is eligible for a preferential tax rate of 15% and a “Software Enterprise” (“SE”) is entitled to an exemption from income taxation for the first two years, counting from the year the enterprise makes profit, and a reduction of half tax rate for the next three years. Guangzhou Kugou and Beijing Kuwo have been recognized as HNTE under the CIT law by relevant government authorities and were entitled to preferential tax rate of 15% for the years ended December 31, 2016, 2017 and 2018. Guangzhou Fanxing Entertainment Information Technology Co., Ltd. has been recognized as HNTE under the CIT law by the relevant government authority and was entitled to preferential tax rate of 15% for the years ended December 31, 2017 and 2018. Yeelion Online was qualified as SE and has enjoyed the relevant tax holiday starting from the year ended December 31, 2017 (i.e. its first profitable year in 2017). TME Tech Shenzhen was established in Qianhai, Bonded Zone of Shenzhen in 2017, which was subject to an applicable tax rate of 15%, as it met the requirements set out by local tax authorities, and accordingly income tax for TME Tech Shenzhen was provided and paid at the preferential tax rate of 15% for the year ended December 31, 2017. In 2018, TME Tech Shenzhen was further assessed by the relevant government authorities as a SE and has been entitled to the relevant tax holiday since year ended December 31, 2017. Income tax for TME Tech Shenzhen has been provided for at its tax holiday treatment and tax refund for the income tax paid for 2017 was recognized in 2018. The CIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently such enterprise is subject to the PRC income tax at the rate of 25% on its global income. The Implementing Rules of the CIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group believes that it is unlikely that its operations outside of the PRC should be considered as a resident enterprise for PRC tax purposes. The income tax expense of the Group are analyzed as follows:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Current income tax
105
353
255
Deferred income tax (note b)
(76
)
(75
)
(84
)
Total income tax expense
29
278
171
The taxation on the Group’s profit before income tax differs from the theoretical amount that would arise using the tax rate of 25% for the years ended December 31, 2016, 2017 and 2018, being the tax rate of the major subsidiaries of the Group before enjoying preferential tax treatments, as follows:
8
Taxation (Continued)
(a)
Income tax expense (Continued)
(iii)
PRC (Continued)
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Profit before income tax expense
114
1,597
2,003
Tax calculated at a tax rate of 25%
28
399
501
Effects of different tax rates applicable to different subsidiaries of the Group
28
(56
)
396
Effects of tax holiday on assessable profit of certain subsidiaries
-
(39
)
(530
)
Effects of tax holiday of a subsidiary recognized for prior year
-
-
(116
)
Effects of preferential tax rate on assessable profit of certain subsidiaries
(20
)
(161
)
(230
)
Expense not deductible for tax purposes
63
107
156
Income not subject to tax
(44
)
(10
)
(2
)
Unrecognized deferred income tax assets
36
81
37
Utilization of previously unrecognized tax assets
(48
)
(45
)
(40
)
Others
(14
)
2
(1
)
29
278
171
The aggregate amount and per share effect of the tax holiday are as follows:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Effects of tax holiday on assessable profit of certain subsidiaries
-
39
646
Per share effect—basic
-
0.01
0.21
Per share effect—diluted
-
0.01
0.20
The Group’s profit before tax consists of:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Non-PRC
(178
)
266
(1,579
)
PRC
292
1,331
3,582
114
1,597
2,003
8
Taxation (Continued)
(b)
Deferred income tax
As of December 31,
2017
2018
RMB’million
RMB’million
The deferred tax assets comprise temporary differences attributable to:
Prepayment and other investments
6
39
Deferred revenue
24
30
Accruals
45
40
Deemed distribution
25
19
Others
6
3
Total deferred tax assets
106
131
Set-off of deferred tax liabilities pursuant to set-off provisions
(1
)
(8
)
Net deferred tax assets
105
123
The deferred tax liabilities comprise temporary differences attributable to:
Intangible assets acquired in business combinations
298
362
Others
7
-
Total deferred tax liabilities
305
362
Set-off of deferred tax liabilities pursuant to set-off provisions
(1
)
(8
)
Net deferred liabilities
304
354
The recovery of deferred income tax:
As of December 31,
2017
2018
RMB’million
RMB’million
Deferred tax assets:
to be recovered after more than 12 months
26
44
to be recovered within 12 months
79
79
105
123
Deferred tax liabilities:
to be recovered after more than 12 months
250
284
to be recovered within 12 months
54
70
304
354
8
Taxation (Continued)
(b)
Deferred income tax (Continued) The movements of deferred income tax assets were as follows:
Prepayment and other investments
Deferred revenue
Accruals
Deemed distribution
Others
Total
RMB’million
RMB’million
RMB’million
RMB’million
RMB’million
RMB’million
At January 1, 2016
-
-
-
-
-
-
Credited to income statement
-
31
11
-
1
43
Recognized in equity
-
-
-
36
-
36
Business combination (Note 24)
-
4
-
-
4
8
At December 31, 2016
-
35
11
36
5
87
Credited/(charged) to income statement
6
(11
)
34
(11
)
1
19
At December 31, 2017
6
24
45
25
6
106
Credited/(charged) to income statement
33
6
(5
)
(6
)
(3
)
25
At December 31, 2018
39
30
40
19
3
131
The Group only recognizes deferred income tax assets for cumulative tax losses if it is probable that future taxable amounts will be available to utilize those tax losses. Management will continue to assess the recognition of deferred income tax assets in future reporting periods. As of December 31, 2017 and 2018, the Group did not recognize deferred income tax assets of RMB125 and RMB116 million respectively in respect of cumulative tax losses amounting to, RMB496 million and RMB511 million respectively. These tax losses will expire from 2019 to 2023. The movements of deferred income tax liabilities were as follows:
Intangible assets RMB’million
Others RMB’million
Total RMB’million
At January 1, 2016
-
-
-
(Credited)/charged to income statement
(36
)
3
(33
)
Business combination (Note 24)
383
-
383
At December 31, 2016
347
3
350
(Credited)/charged to income statement
(58
)
2
(56
)
Business combination (Note 24)
11
-
11
At December 31, 2017
300
5
305
(Credited)/charged to income statement
(54
)
(5
)
(59
)
Business combination (Note 24)
116
-
116
At December 31, 2018
362
-
362

Earning per share

Earning per share12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]
Earning per share9
Earning per share
(e)
Basic earnings per share Basic earnings per share (“EPS”) is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year.
(f)
Diluted earnings per share For the calculation of diluted earnings per share, net income attributable to ordinary shareholders for basic earnings per share is adjusted by the effect of dilutive securities, including share-based awards in respect of share options and restricted share units (“RSU”), under the treasury stock method. Potentially dilutive securities have been excluded from the computation of diluted net income per share if their inclusion is anti-dilutive. The following table sets forth the computation of basic and diluted net income per share:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Basic income per share calculation
Numerator:
Profit for the year attributable to the Company (in millions of RMB)
82
1,326
1,833
Denominator:
Weighted average number of Class A and Class B ordinary shares outstanding
1,831,604,053
2,593,157,207
3,076,314,670
Basic earnings per share (in RMB)
0.04
0.51
0.60
Basic earnings per ADS (in RMB)
1.19
Diluted net income per share calculation
Numerator:
Profit for the year attributable to the Company (in millions of RMB)
82
1,326
1,833
Denominator:
Weighted average number of Class A and Class B ordinary shares outstanding
1,831,604,053
2,593,157,207
3,076,314,670
Adjustments for share options and RSU
67,815,772
46,309,205
82,906,218
Number of shares used in computing diluted earnings per share attributable to the Company
1,899,419,825
2,639,466,412
3,159,220,888
Diluted earnings per share (in RMB)
0.04
0.50
0.58
Diluted earnings per ADS (in RMB)
1.16
Note: One ADS represented two Class A ordinary shares of the Company.

Property Plant And Equipment

Property Plant And Equipment12 Months Ended
Dec. 31, 2018
Disclosure Of Property Plant And Equipment [Abstract]
Property Plant And Equipment10
Servers and network equipment RMB million
Leasehold improve -ments RMB million
Office furniture, equipment and others RMB million
Total RMB million
At January 1, 2016
Cost
-
-
4
4
Accumulated depreciation
-
-
(1
)
(1
)
Net book amount
-
-
3
3
Year ended December 31, 2016
Opening net book amount
-
-
3
3
Additions
31
6
4
41
Business combination (Note 24)
52
36
8
96
Disposals
(1
)
-
(1
)
(2
)
Depreciation charge
(17
)
(10
)
(3
)
(30
)
Closing net book amount
65
32
11
108
At December 31, 2016
Cost
82
42
15
139
Accumulated depreciation
(17
)
(10
)
(4
)
(31
)
Net book amount
65
32
11
108
Year ended December 31, 2017
Opening net book amount
65
32
11
108
Additions
43
33
7
83
Disposals
(1
)
-
(1
)
(2
)
Depreciation charge
(35
)
(22
)
(5
)
(62
)
Closing net book amount
72
43
12
127
At December 31, 2017
Cost
123
75
22
220
Accumulated depreciation
(51
)
(32
)
(10
)
(93
)
Net book amount
72
43
12
127
10
Property, plant and equipment (Continued)
Servers and network equipment RMB million
Leasehold improve -ments RMB million
Office furniture, equipment and others RMB million
Total RMB million
Year ended December 31, 2018
Opening net book amount
72
43
12
127
Additions
95
10
11
116
Business combination (Note 24)
-
3
1
4
Disposals
(1
)
-
-
(1
)
Depreciation charge
(45
)
(25
)
(8
)
(78
)
Closing net book amount
121
31
16
168
At December 31, 2018
Cost
217
88
30
335
Accumulated depreciation
(96
)
(57
)
(14
)
(167
)
Net book amount
121
31
16
168
During the years ended December 31, 2016, 2017 and 2018, depreciation was charged to the income statements as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Cost of revenues
15
33
47
Selling and marketing expenses
2
2
1
General and administrative expenses
13
27
30
30
62
78

Intangible Assets

Intangible Assets12 Months Ended
Dec. 31, 2018
Disclosure Of Intangible Assets [Abstract]
Intangible Assets11
Intangible assets
Domain name, trademark and Internet audio/video program transmission license RMB’million
Copyrights RMB’million
Supplier resources RMB’million
Customer relationships RMB’million
Non-compete agreement RMB’million
Others RMB’million
Total RMB’million
At January 1, 2016
Cost
-
-
-
-
-
-
-
Accumulated amortization
-
-
-
-
-
-
-
Closing Net book amount
-
-
-
-
-
-
-
Year ended December 31, 2016
Opening net book amount
-
-
-
-
-
-
-
Additions
-
-
-
-
-
-
-
Business combination (Note 24)
1,340
-
315
235
131
192
2,213
amortization charge
(55
)
-
(23
)
(29
)
(14
)
(85
)
(206
)
Closing net book amount
1,285
-
292
206
117
107
2,007
At December 31, 2016
-
Cost
1,340
-
315
235
131
197
2,218
Accumulated amortization
(55
)
-
(23
)
(29
)
(14
)
(90
)
(211
)
Net book amount
1,285
-
292
206
117
107
2,007
Year ended December 31, 2017
-
Opening net book amount
1,285
-
292
206
117
107
2,007
Additions
-
-
-
-
-
4
4
Business combination (Note 24)
-
-
16
3
1
4
24
Disposals
-
-
-
-
-
(1
)
(1
)
amortization charge
(116
)
-
(49
)
(61
)
(29
)
(62
)
(317
)
Closing net book amount
1,169
-
259
148
89
52
1,717
At December 31, 2017
Cost
1,340
-
331
238
131
81
2,121
Accumulated amortization
(171
)
-
(72
)
(90
)
(42
)
(29
)
(404
)
Net book amount
1,169
-
259
148
89
52
1,717
Year ended December 31, 2018
Opening net book amount
1,169
-
259
148
89
52
1,717
Additions
-
4
-
-
-
11
15
Business combination (Note 24)
-
281
4
-
3
35
323
Disposals
-
-
-
-
-
(1
)
(1
)
amortization charge
(116
)
(13
)
(51
)
(62
)
(29
)
(20
)
(291
)
Closing net book amount
1,053
272
212
86
63
77
1,763
At December 31, 2018
Cost
1,340
285
335
238
134
125
2,457
Accumulated amortization
(287
)
(13
)
(123
)
(152
)
(71
)
(48
)
(694
)
Net book amount
1,053
272
212
86
63
77
1,763
During the years ended December 31, 2016, 2017 and 2018, amortization was charged to the income statements as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Cost of revenues
27
60
78
Selling and marketing expenses
109
109
62
General and administrative expenses
70
148
151
206
317
291

Goodwill

Goodwill12 Months Ended
Dec. 31, 2018
Changes In Goodwill [Abstract]
Goodwill12
Goodwill
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Balance as of January 1,
-
15,762
16,262
Goodwill acquired (Note 24)
15,762
500
826
Balance as of December 31,
15,762
16,262
17,088
Goodwill is tested for impairment on an annual basis or when there are indications the carrying amount may be impaired. In 2017 and 2018, the Group had only one operating segment, for the purpose of impairment testing, goodwill is regarded as attributable to the Group as a whole. The Group carries out its impairment testing on goodwill by comparing the recoverable amounts of groups of CGUs to their carrying amounts. Value-in-use is calculated based on discounted cash flows. The discounted cash flows calculations of each group of CGUs use cash flow projections developed based on financial budgets approved by management of the Group covering a five-year period. Cash flows beyond the five-year period are extrapolated using an estimated annual growth of not more than 3%. Pre-tax discount rates ranging from 15% to 17.5% are adopted, which reflects market assessment of time value and the specific risks relating to the industry that the Group operates. The financial projections were determined by the management based on past performance and its expectation for market development. No impairment is recognized for the years ended December 31, 2017 and 2018.

Investments accounted for using

Investments accounted for using equity method12 Months Ended
Dec. 31, 2018
Investments Accounted For Using Equity Method
Investments accounted for using equity method13
Investments accounted for using equity method
As of December 31,
2017 RMB’million
2018 RMB’million
Investments in associates
324
190
Investments in joint ventures
54
46
378
236
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Share of profit/(loss) of investments accounted for using equity method:
Associates
12
13
12
Joint ventures
(1
)
(9
)
(13
)
11
4
(1
)
13
Investments accounted for using equity method (Continued) Movement of investments in associates and joint ventures is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
292
378
Additions
-
89
99
Business combination (Note 24)
290
1
3
Share of profit/(loss)
11
4
(1
)
Disposal
(12
)
-
(50
)
Step acquisition accounted for as business combination under common control (Note 25)
-
-
(184
)
Step acquisition (Note 24)
-
-
(14
)
Impairment provision
-
(2
)
(2
)
Currency translation differences
3
(6
)
7
At end of the year
292
378
236
The principal associates and joint ventures of the Group are set out below:
Place of
business/
% of ownership interest
country of
As of December 31,
Name of entity
incorporation
2017
2018
%
%
United Entertainment Corporation
Cayman
30.00
%
NA
Liquid State Limited
Hong Kong
50.00
%
50.00
%
Beijing New Sound Entertainment Ltd.
China
70.00
%
48.00
%
Beijing Quku Technology Co., Ltd.
China
38.00
%
38.00
%
Beijing Tianhaoshengshi Entertainment Culture Co., Ltd.
China
43.90
%
-
Beijing Tianhaoshengshi Music Cultural Ltd.
China
-
45.00
%
Shenzhen United Entertainment Equity Investment Center (Limited Partnership)
China
50.00
%
NA
The tables below provide summarized financial information of the Group’s investments accounted for using equity method. The information disclosed reflects the amounts presented in the financial statements of the relevant associates and joint ventures and not the Company’s share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policies.
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Revenue
260
403
362
Cost of revenue
(141
)
(280
)
(163
)
Income from operations
65
16
6
Net income
38
17
(5
)
Current assets
709
786
948
Non-current assets
160
201
91
Current liabilities
168
200
222
Non-current liabilities
5
1
-
There are no material contingent liabilities relating to the Group’s interests in the investments accounted for using equity method.

Available For Sale Financial As

Available For Sale Financial Assets12 Months Ended
Dec. 31, 2018
Investments Accounted For Using Equity Method [Abstract]
Available For Sale Financial Assets14
Available-for-sale financial assets
As of December 31,
2017
2018
RMB’million
RMB’million
Equity investments in unlisted securities
3,740
-
Movement of available-for-sale financial assets is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
10
3,740
Additions (note)
-
7,547
-
Business combination (Note 24)
10
-
-
Deemed distribution (note)
-
(3,774
)
-
Currency translation differences
-
(43
)
-
Reclassified to financial assets at fair value through other comprehensive income(Note 2.2(a))
-
-
(3,730
)
Reclassified to other investments(Note 2.2(a))
-
-
(10
)
At the end of the year
10
3,740
-
Note: In December 2017, the Group entered into a share subscription agreement (“Spotify Subscription Agreement”) with Spotify Technology S.A. (“Spotify”) to subscribe for 8,552,440 ordinary shares or approximately 4.92% of issued ordinary shares of Spotify, at valuation of RMB7,547 million (US$1,142 million), by issuance of 282,830,698 ordinary shares of the Company as consideration. Immediately after the completion of the subscription, the Company transferred 50% of its ordinary shares in Spotify amounting to approximately RMB3,774 million to its controlling shareholder, Tencent, as part of the distribution of stock dividend as described below. On December 7, 2017, the board of directors of the Company resolved to offer 255,185,879 ordinary shares as fully paid stock dividend to all shareholders of the Company on a pro rata basis and after giving effect to the wavier of stock dividend by Spotify and Tencent, as detailed below, 88,726,036 ordinary shares as fully paid stock dividend have been issued to the Company’s shareholders other than Spotify and Tencent. The stock dividend paid was credited to share capital at the par value of the stock dividend paid with corresponding debited to additional paid-in capital of the same mount. Pursuant to the Spotify Subscription Agreement, Spotify has waived its right to receive any bonus shares of the Company. In consideration for the waiver to receive stock dividend by Tencent, a certain number of ordinary shares of Spotify acquired by the Company were transferred to Tencent at US$1, which are accounted for as distribution in equity (Note 19).

Financial Assets at Fair Value

Financial Assets at Fair Value12 Months Ended
Dec. 31, 2018
Disclosure Of Financial Assets [Abstract]
Financial Assets at Fair Value15
Financial assets at fair value
(a)
Financial assets at fair value through other comprehensive income Movement of financial assets at fair value through other comprehensive income is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Listed equity investments
At beginning of the year
-
-
-
Reclassification from available-for-sale financial assets (note)
-
-
3,730
Fair value change
-
-
(675
)
Currency translation differences
-
-
276
At end of the year
-
-
3,331
Note: The Group’s financial assets at fair value through other comprehensive income represented its equity investment in Spotify. Spotify was listed on the New York Stock Exchange in April 2018.
(b)
Other investments Other investments represent financial assets at fair value through profit or loss. Movement of other investments is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
-
-
Reclassification from available-for-sale financial assets
-
-
10
Addition (note)
-
-
276
Fair value change
-
-
(30
)
At end of the year
-
-
256
Note: During the year ended December 31, 2018, the Group acquired a minority stake in an entertainment and media company at a consideration of RMB160 million and invested in minority interest in certain music related media projects of Tencent Group in aggregate amount of RMB116 million.

Prepayments deposits and other

Prepayments deposits and other receivables12 Months Ended
Dec. 31, 2018
Prepayments Deposits And Other Receivables [Abstract]
Prepayments deposits and other receivables16
Prepayments, deposits and other receivables
As of December 31,
2017
2018
RMB’million
RMB’million
Included in non-current assets
Prepaid contents royalties
191
901
Receivables from an associate, Jiyun
13
-
204
901
Included in current assets
Prepaid contents royalties
831
1,450
Value-added tax recoverable
82
85
Prepaid vendors deposits and other receivables
30
75
Prepaid promotion and other expenses
61
130
Receivable from Tencent (Note 29(b))
59
28
Others
39
55
1,102
1,823

Accounts receivable

Accounts receivable12 Months Ended
Dec. 31, 2018
Trade And Other Receivables [Abstract]
Accounts receivable17
Accounts receivable
As of December 31,
2017
2018
RMB’million
RMB’million
Accounts receivable
1,170
1,490
Less: provision for impairment of trade receivables
(9
)
(7
)
Accounts receivable, net
1,161
1,483
Ageing analysis of the accounts receivables based on invoice date:
Up to 3 months
1,123
1,304
3 to 6 months
31
144
Over 6 months
16
42
1,170
1,490
Ageing analysis of the accounts receivables that past due but not impaired:
Up to 6 months
44
94
Over 6 months
7
20
51
114
Movements in the provision for impairment of accounts receivable that were assessed for impairment collectively are as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At January 1
-
6
9
Provision for impairment recognized in income statement
7
6
3
Receivables written off during the year as uncollectible
(1
)
(3
)
(5
)
At December 31
6
9
7
As of December 31, 2017 and 2018, the amounts of accounts receivable that were past due and impaired were insignificant to the Group.

Cash and cash equivalents

Cash and cash equivalents12 Months Ended
Dec. 31, 2018
Cash And Cash Equivalents [Abstract]
Cash and cash equivalents18
Cash and cash equivalents
As of December 31,
2017
2018
RMB’million
RMB’million
Cash at bank
3,419
7,557
Term deposits with initial terms within three months
1,755
9,799
5,174
17,356
The effective interest rate of term deposits of the Group with initial terms within three months during the years ended December 31, 2017 and 2018 was 2.91% and 3.24%, respectively.

Share capital

Share capital12 Months Ended
Dec. 31, 2018
Equity [Abstract]
Share capital19 Share capital
Number of shares
Share capital RMB’million
Additional paid-in capital RMB’million
Balance January 1, 2016 '(US$0.000083 par value; 1,800,000,000 shares authorized)
1,290,862,550
1
-
Issuance of ordinary shares for the reverse acquisition (Note 24(a))
1,080,239,767
1
17,992
Issuance of stock ordinary shares (note (i))
172,712,345
-
2,071
Balance December 31, 2016 '(US$0.000083 par value; 4,800,000,000 shares authorized)
2,543,814,662
2
20,063
Issuance of ordinary shares (note (i))
15,939,000
-
-
Issuance of stock dividend (Note 14)
88,726,036
-
-
Exercise of share options (note (i))
39,262,654
-
79
Issuance of ordinary shares in exchange for ordinary shares in an investee (Note 14)
282,830,698
-
7,547
Distribution to Tencent (Note 14)
-
-
(3,774
)
Balance December 31, 2017 '(US$0.000083 par value; 4,800,000,000 shares authorized)
2,970,573,050
2
23,915
Issuance of ordinary shares (note ii)
97,381,238
-
2,433
Issuance of ordinary shares for acquiring the remaining interest in UEC (Note 25)
23,084,008
-
1,027
Issuance of puttable ordinary (note iii)
24,757,517
-
-
Issuance of ordinary shares to Music Label Partners (note iv)
68,131,015
-
2,905
Issuance of ordinary shares upon initial public offering (note v)
82,059,658
-
3,496
Balance December 31, 2018 (US$0.000083 par value; 4,800,000,000 shares authorized)
3,265,986,486
2
33,776
As of December 31, 2018, analysis of the Company’s issued shares is as follows:
Number of shares
Share capital RMB’million
Class A ordinary shares
609,770,009
-
Class B ordinary shares
2,656,216,477
2
3,265,986,486
2
19
Share capital (Continued) Notes:
(i)
These shares rank pari passu in all respects with the shares in issue.
( i i)
During January to March 2018, 97,318,238 ordinary shares of the Company were allotted and issued to certain existing shareholders and new financial investors for an aggregated consideration of US$382 million (equivalents to approximately RMB2,433 million). These shares rank pari passu in all respects with the shares in issue. The excess over the par value was credited to the additional paid-in capital.
(iii )
Issuance of puttable ordinary shares During January to March 2018, the Company allotted and issued 24,757,517 ordinary shares of the Company to certain investors for an aggregate consideration of US$123 million (equivalents to approximately RMB775 million). The consideration comprised cash proceeds of US$67 million (equivalents to approximately RMB422 million) and business cooperation arrangements, in form of contents cooperation, valued at approximately US$56 million (equivalents to approximately RMB353 million). These shares rank pari passu in all respects with the shares in issue except that there is lock up period of 3 years on these shares and the holders have the right to sell their shares to the Company during the lock up period at a pre-determined price (“Put Right”). This arrangement is accounted for as compound instrument under share-based compensation arrangement with debt component, representing the holders’ right to demand payment by exercise the Put Right, which is accounted for as cash-settled share-based compensation and the residual is equity component accounted for as equity-settled shared-based compensation. The present value of the outflows of cash in relation to the Put Right of approximately US$67 million (equivalents to approximately RMB422 million) is recognized as a liability (Note 22) and subsequently measured at fair value. The residual balance of approximately US$56 million (equivalents to approximately RMB353 million) is accounted for as an equity-settled share-based compensation and recognized in equity.
(iv)
Share Issuances to Music Label Partners On October 3, 2018, the Company issued a total of 68,131,015 ordinary shares to WMG China LLC (“Warner”), an affiliate of Warner Music Group, and Sony Music Entertainment (“Sony”) for an aggregate cash consideration of approximately US$200 million. Under the share subscription agreements, shares held by Warner and certain shares held by Sony are subject to a lock-up until the earlier of the third anniversary of the completion of the IPO of the Company or October 1, 2021, subject to limited exceptions. The remaining shares held by Sony are subject to a lock-up until the earlier of the end of 180 days after the Company’s prospectus issued on December 12, 2018 or April 1, 2019, subject to limited exceptions. Warner and Sony can request the Company to repurchase the shares held by them at their subscription price if there is no qualified IPO by the end of 2019. The Company expects this share issuance will help deepen its strategic cooperation with its major music label partners and better align the interests with them to create long-term value. The excess fair value of the shares issued, taking into account the related terms and conditions, over the consideration received of approximately US$221 million (equivalents to approximately RMB1,519 million) was accounted for as share-based accounting charge expensed immediately upon the share issuances under IFRS 2 “Share-based Payment”.
19
Share capital (Continued) Notes: (Continued)
( v)
Dual-class ordinary share structure The Company adopted a dual-class ordinary share structure effective immediately prior to the completion of the IPO. Ordinary shares of the Company are divided into Class A ordinary shares and Class B ordinary shares. Holders of the Class A ordinary shares and Class B ordinary shares will have the same rights except for voting and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to 15 votes and is convertible into one Class A ordinary share. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any non-affiliate to such holder, each of such Class B ordinary share will be immediately converted into one Class A ordinary share. All the Company’s issued ordinary shares held by the Company’s shareholders other than the then existing shareholders as of December 8, 2017 and its respective affiliates that holding any ordinary shares in the Company immediately prior to the completion of the IPO (“Pre-2018 Shareholders”) have been re-designated as Class A ordinary shares, and all issued ordinary shares held by the Pre-2018 Shareholders have been re-designated as Class B ordinary shares immediately prior to the completion of the IPO. On December 12, 2018, 41,029,829 ADSs were offered by the Company upon the listing of the ADSs on the New York Stock Exchange (the “Offering”), which represented 82,059,658 Class A ordinary shares of the Company.

Other Reserves

Other Reserves12 Months Ended
Dec. 31, 2018
Disclosure Of Reserves Within Equity [Abstract]
Other Reserves20
Other reserves
Share-based compensa -tion reserve RMB’million
Contribution from/ (distribution to) ultimate holding company RMB’million
PRC statutory reserve RMB’million
Foreign currency translation reserve RMB’million
Fair value reserve RMB’million
Others RMB’million
Total other reserves RMB’million
At January 1, 2016
-
577
-
-
-
-
577
Currency translation differences
-
-
-
42
-
-
42
Shared-based compensation
142
28
-
-
-
-
170
Deemed distribution
-
(189
)
-
-
-
-
(189
)
Profit appropriations to PRC statutory reserves
-
-
17
-
-
-
17
At December 31, 2016
142
416
42
-
-
617
Currency translation differences
-
-
-
(143
)
-
-
(143
)
Deemed contribution
99
20
-
-
-
-
119
Share based compensation
335
27
-
-
-
-
362
Profit appropriations to PRC statutory reserves
-
-
42
-
-
-
42
At December 31, 2017
576
463
59
(101
)
-
-
997
Currency translation differences
-
-
-
552
-
-
552
Fair value changes on financial assets at fair value through other comprehensive income
-
-
-
-
(675
)
-
(675
)
Acquisition of remaining interests in associates
-
-
-
-
-
(831
)
(831
)
Share based compensation
840
840
Profit appropriations to PRC statutory reserves
-
-
20
-
-
-
20
At December 31, 2018
1,416
463
79
451
(675
)
(831
)
903

Share Based Compensation

Share Based Compensation12 Months Ended
Dec. 31, 2018
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Abstract]
Share Based Compensation21
Share based compensation
(a)
Share-based compensation plans of the Company The Group has adopted three share-based compensation plans, namely, the 2014 Share Incentive Plan, the 2017 Restricted Share Scheme and the 2017 Option Plan.
(i)
2014 Share Incentive Plan 2014 Share Incentive Plan was approved by the then board of directors of the Company in October 2014 prior to the Reverse Acquisition. According to the 2014 Share Incentive Plan, 96,704,847 ordinary shares have been reserved to be issued to any qualified employees, directors, non-employee directors, and consultants as determined by the board of directors of the Company. The options will be exercisable only if option holder continues employment or provide services through each vesting date. The maximum term of any issued stock option is ten years from the grant date. Some granted options follow the first category vesting schedule, one-fourth (1/4) of which shall vest and become exercisable upon the first anniversary of the date of grant and one-eighth (1/8) of which shall vest and become exercisable on each half of a year anniversary thereafter. Some granted options follow the second category vesting schedule, one-fourth (1/4) of which shall vest upon the first anniversary of the grant date and one-sixteenth (1/16) of which shall vest on each three months thereafter. Under the second category vesting schedule, in the event of the Company’s completion of an IPO or termination of the option holder’s employment agreement by the Company without cause, the vesting schedule shall be accelerated by a one year period (which means that the whole vesting schedule shall be shortened from four years to three years). For the third category vesting schedule, all options shall vest upon the first anniversary of the grant date, and in the event of the Company’s completion of an IPO. The option holders may elect at any time to exercise any part or all of the vested options before the expiry date.
Number of options
Weighted- average exercise price
Weighted- average grant date fair value
(US$)
(US$)
Outstanding as of January 1, 2016
-
-
-
Arising from business combination
98,821,647
0.25
2.04
Forfeited
(2,116,800
)
0.29
1.98
Outstanding as of December 31, 2016
96,704,847
0.25
2.05
Vested and expected to vest as of December 31, 2016
87,734,832
0.24
2.04
Exercisable as of December 31, 2016
59,808,852
0.25
2.03
Non vested as of December 31, 2016
36,895,995
0.24
2.08
Outstanding as of January 1, 2017
96,704,847
0.25
2.05
Exercised
(39,262,654
)
0.30
1.98
Forfeited
(3,943,920
)
0.24
2.08
Outstanding As of December 31, 2017
53,498,273
0.21
2.09
Vested and expected to vest As of December 31, 2017
49,573,551
0.21
2.09
Exercisable As of December 31, 2017
33,196,944
0.18
2.11
Non vested As of December 31, 2017
20,301,329
0.26
2.06
21
Share based compensation (Continued)
(a)
Share-based compensation plans of the Company (Continued)
(i)
2014 Share Incentive Plan (Continued)
Weighted-
Weighted-
average grant
Number of
average
date fair
options
exercise price
value
(US$)
(US$)
Outstanding as of January 1, 2018
53,498,273
0.21
2.09
Anti-dilution adjustments
4,731,938
-
-
Forfeited
(1,494,002
)
0.24
2.05
Outstanding as of December 31, 2018
56,736,209
0.19
1.94
Vested and expected to vest as of December 31, 2018
55,921,341
0.19
1.94
Exercisable as of December 31, 2018
50,155,161
0.18
1.94
Non vested as of December 31, 2018
6,581,048
0.25
1.91
Note: The fair values of employee stock options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model are presented below:
2016
2017
Risk free interest rate
1.5
%
1.5
%
Expected dividend yield
0
%
0
%
Expected volatility range
64%-65%
64%-65%
Exercise multiples
2.2-2.8
2.2-2.8
Contractual life
10 years
10 years
The Binomial Model requires the input of highly subjective assumptions. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield was estimated based on the Company’s expected dividend policy over the expected life of the options. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of similar U.S. and Hong Kong public companies for a period equal to the expected life preceding the grant date. The exercise multiples was estimated based on the vesting and contractual terms of the awards and management’s expectation of exercise behavior of the grantees.
21
Share based compensation (Continued)
(a)
Share-based compensation plans of the Company (Continued)
(i)
2014 Share Incentive Plan (Continued) Share options outstanding at the end of the year have the following expiry date and exercise prices:
Grant Date
Expiry date
Exercise price
Share options December 31, 2017
Share options December 31, 2018
March 1, 2015
February 28, 2025
US$0.000076
2,348,099
2,348,099
March 1, 2015
February 28, 2025
US$0.27
2,630,000
2,714,940
March 1, 2015
February 28, 2025
US$0.000076
11,924,136
12,945,345
March 1, 2015
February 28, 2025
US$0.27
9,939,200
10,776,631
March 30, 2015
March 29, 2025
US$0.27
3,444,042
3,748,650
July 1, 2015
June 30, 2025
US$0.27
200,000
75,100
October 1, 2015
September 30, 2025
US$0.27
780,600
791,880
December 31, 2015
December 30, 2025
US$0.27
2,933,281
3,036,686
December 31, 2015
December 30, 2025
US$0.000076
212,000
230,750
March 1, 2016
February 28, 2026
US$0.27
761,000
746,643
March 31, 2016
March 30, 2026
US$0.27
340,500
370,040
June 1, 2016
May 30, 2026
US$0.27
6,521,513
7,098,340
June 30, 2016
June 29, 2026
US$0.000076
600,000
653,070
June 30, 2016
June 29, 2026
US$0.27
10,863,902
11,200,035
Total
53,498,273
56,736,209
Weighted average remaining contractual life of options outstanding at end of period:
7.22
6.23
(ii)
2017 Restricted Share Scheme and 2017 Option Plan Followed the completion of the Reverse Acquisition, the Company have reserved certain ordinary shares to be issued to any qualified employees of Tencent PRC Music Business transferred to the Group. In October 2016, the Group agreed to grant certain restricted shares and share options of the Company to certain employees of Tencent PRC Music Business that transferred to the Group, mutual understanding of the key terms and conditions of relevant restricted shares and share options have been reached between the Company and qualified employees. 7,172,472 restricted shares and 12,034,480 share options have been granted during 2016 while formal grant letters were signed subsequently in May 2017. The Group recognizes the share-based compensation expenses of these restricted shares and share options since October 2016. Pursuant to the restricted shares agreements under 2017 Restricted Share Scheme, subject to grantee's continued services to the Group through the applicable vesting date, some restricted shares follow the first category of vesting schedule, one-fourth(l/4) of which shall vest eighteen months after grant date, and one-fourth (1/4) every year after. Other granted restricted shares shall follow the second vesting schedule, half (1/2) shall vest six months after grant date, and the other half shall vest six months thereafter.
21
Share based compensation (Continued)
(a)
Share-based compensation plans of the Company (Continued)
(ii)
2017 Restricted Share Scheme and 2017 Option Plan (Continued) Movements in the number of RSUs for the years ended December 31, 2017 and 2018 are as follows:
Number of awarded shares
Year ended December 31,
2016
2017
2018
Outstanding as of January 1
-
7,172,472
8,141,664
Anti-dilution adjustments
-
-
719,968
Granted
7,172,472
1,234,514
5,335,010
Forfeited
-
(265,322
)
(472,542
)
Outstanding as of December 31
7,172,472
8,141,664
13,724,100
Expected to vest as of December 31
4,583,524
5,797,563
10,318,030
The fair value of the restricted shares was calculated based on the fair value of ordinary shares of the Company. The weighted average fair value of restricted shares granted during the years ended December 31, 2016, 2017 and 2018 was US$2.14 per share (equivalent to approximately RMB13.98 per share), US$3.26 per share (equivalent to approximately RMB21.27 per share) and US$6.12 per share (equivalent to approximately RMB42.06 per share), respectively. Share options granted are generally subject to a four batches vesting schedule as determined by the board of directors of the grant. One-fourth (1/4) of which shall vest nine months or eighteen months after grant date, respectively, as provided in the grant agreement, and one-fourth (1/4) of which vest upon every year thereafter. The vested options shall become exercisable in the event of the Company’s completion of an IPO.
21
Share based compensation (Continued)
Number of options
Weighted- average exercise price
Weighted- average grant date fair value
(US$)
(US$)
Outstanding as of January 1, 2016
-
-
-
Granted
12,034,480
2.53
1.03
Outstanding as of December 31, 2016
12,034,480
2.53
1.03
Vested and expected to vest as of December 31, 2016
7,944,083
2.53
1.03
Exercisable as of December 31, 2016
-
-
-
Non vested as of December 31, 2016
12,034,480
2.53
1.03
Outstanding as of January 1, 2017
12,034,480
2.53
1.03
Granted
15,315,256
1.35
3.10
Forfeited
(388,350
)
0.29
3.39
Outstanding as of December 31, 2017
26,961,386
1.89
2.17
Vested and expected to vest as of December 31, 2017
18,362,420
1.87
2.18
Exercisable as of December 31, 2017
-
-
-
Non vested as of December 31, 2017
26,961,386
1.89
2.17
Outstanding as of January 1, 2018
26,961,386
1.89
2.17
Anti-dilution adjustments
2,384,714
-
-
Granted
7,777,224
6.76
3.27
Forfeited
(1,037,021
)
1.35
1.85
Outstanding as of December 31, 2018
36,086,303
2.75
2.24
Vested and expected to vest as of December 31, 2018
28,604,121
2.58
2.38
Exercisable as of December 31, 2018
7,252,971
1.76
1.75
Non vested as of December 31, 2018
28,833,332
3.00
2.47
(a)
Share-based compensation plans of the Company (Continued)
(ii)
2017 Restricted Share Scheme and 2017 Option Plan (Continued) The fair value of share options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model are presented below:
Year ended December 31,
2016
2017
2018
Risk free interest rate
1.6
%
2.1-2.5%
2.97%-3.21%
Expected dividend yield
0
%
0
%
0
%
Expected volatility
55
%
55%-60%
50%-60%
Exercise multiples
2.8
2.2-2.8
2.8
Contractual life
10 years
10 years
10 years
21 Share based compensation Share options outstanding at the end of the year have the following expiry date and exercise prices:
Share options As of December 31,
Grant Date
Expiry date
Exercise price
2017
2018
June 16, 2017
June 15, 2027
US$2.32
12,034,480
13,098,930
August 31, 2017
August 30,2027
US$0.27
7,666,803
7,768,593
December 20, 2017
December 19, 2027
US$2.32
7,260,103
7,902,280
April 16, 2018
April 15, 2028
US$4.04
-
1,300,000
October 17, 2018
October 16, 2028
US$7.14
-
6,016,500
Total
26,961,386
36,086,303
Weighted average remaining contractual life of options outstanding at end of year:
9.21
8.62
(b)
Share-based compensation plans of Tencent Tencent operates a number of share-based compensation plans (including share option scheme and share award scheme) covering certain employees of the Group. Share options granted are generally subject to a four-year or five-year vesting schedule as determined by the board of directors of Tencent. Under the four-year vesting schedule, share options in general vest one-fourth (1/4) upon the first anniversary of the grant date, and one-fourth (1/4) every year after. Under the five-year vesting schedule, depending on the nature and purpose of the grant, share options in general vest one-fifth (1/5) upon the first or second anniversary of the grant date, respectively, as provided in the grant agreement, and one-fifth (1/5) every year after.
21
Share based compensation (Continued)
(b)
Share-based compensation plans of Tencent (Continued) RSUs are subject to a three-year or four-year vesting schedule, and each year after the grant date, one-third (1/3) or one-fourth (1/4) shall vest accordingly. No outstanding share options or RSUs will be exercisable or subject to vesting after the expiry of a maximum of seven years from the date of grant. Movements in the number of share options of Tencent relevant to the Group outstanding is as follows:
Weighted-
Average
average grant
Number of
exercise price
date fair value
shares
(HK$)
(HK$)
Outstanding as of January 1, 2016
67,500
55.18
50.90
Granted
53,160
174.86
55.42
Exercised
(35,000
)
54.14
51.09
Outstanding as of December 31, 2016
85,660
129.88
53.63
Vested and expected to vest as of December 31, 2016
67,803
119.12
53.52
Exercisable as of December 31, 2016
22,500
26.08
56.00
Non vested as of December 31, 2016
63,160
166.85
52.79
Outstanding as of January 1, 2017
85,660
129.88
53.63
Granted
32,410
272.36
81.70
Exercised
(32,735
)
64.88
53.28
Outstanding as of December 31, 2017
85,335
208.93
64.43
Vested and expected to vest as of December 31, 2017
57,795
208.52
64.25
Exercisable as of December 31, 2017
8,055
174.86
55.42
Non vested as of December 31, 2017
77,280
212.48
65.37
Outstanding as of January 1, 2018
85,335
208.93
64.43
Exercised
(10,235
)
150.16
47.30
Outstanding as of December 31, 2018
75,100
216.94
66.76
Vested and expected to vest as of December 31, 2018
63,462
214.53
66.11
Exercisable as of December 31, 2018
24,212
207.49
64.21
Non vested as of December 31, 2018
50,888
221.43
67.97
The fair values of employee stock options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model for the years ended December 31, 2016 and 2017 are presented below:
Year ended December 31,
2016
2017
Risk free interest rate
0.69
%
1.39
%
Expected dividend yield
0.32
%
0.33
%
Expected volatility range
35
%
30
%
Exercise multiples
2.5
7
Contractual life
7 years
7 years
21
Share based compensation (Continued)
(b)
Share-based compensation plans of Tencent (Continued) Share options outstanding at the end of the year have the following expiry date and exercise prices:
Share options
As of December 31,
Grant Date
Expiry date
Exercise price
2017
2018
July 10, 2014
July 9, 2021
HK$124.30
5,000
-
July 6, 2016
July 5, 2023
HK$174.86
47,925
42,690
July 10, 2017
July 9, 2024
HK$272.36
32,410
32,410
Total
85,335
75,100
Movements in the number of awarded shares for the years ended December 31, 2017 and 2018 are as follows:
Number of awarded shares Year ended December 31,
2016
2017
2018
Outstanding as of January 1
797,355
731,814
430,418
Granted
222,800
24,503
-
Forfeited
(1,707
)
(9,013
)
(4,718
)
Vested and transferred
(286,634
)
(316,886
)
(237,752
)
Outstanding as of December 31
731,814
430,418
187,948
Expected to vest as of December 31
658,633
361,943
166,321
The fair value of the awarded shares was calculated based on the market price of the Tencent’s shares at the respective grant date. The expected dividends during the vesting period have been taken into account when assessing the fair value of these awarded shares. The weighted average fair value of awarded shares granted during the years ended December 31, 2016 and 2017 was HK$172.56 per share (equivalent to approximately RMB144.25 per share) and HK$271.6 per share (equivalent to approximately RMB 227.03 per share), respectively. The outstanding awarded shares as of December 31, 2018 were divided into two to five tranches on an equal basis as at their grant dates. The first tranche can be exercised immediately or after a specified period ranging from four months to four years from the grant date, and the remaining tranches will become exercisable in each subsequent year. The optionee may elect at any time while remains an employee, to exercise any part or all of the vested options before the expiry date.
(c)
Expected retention rate of grantees The Group has to estimate the expected yearly percentage of grantees that will stay within the Group at the end of vesting periods of the options and awarded shares (the “Expected Retention Rate”) in order to determine the amount of share-based compensation expenses charged to the consolidated income statement. As at December 31, 2017 and 2018, the Expected Retention Rate of the Group was assessed to be 90%.

Other Payables and Accruals

Other Payables and Accruals12 Months Ended
Dec. 31, 2018
Other Payables And Accruals [Abstract]
Other Payables and Accruals22
Other payables and accruals
As of December 31,
2017 RMB’million
2018 RMB’million
Included in non-current liabilities
Investment payables
-
169
Contingent consideration (Note 24)
-
32
Government grants
21
13
Deferred revenue (Note 23)
-
27
21
241
Included in current liabilities
Dividend payable
31
12
Accrued expenses (note)
752
1,467
Advances from customers
69
106
Investment payables
303
389
Contingent consideration (Note 24)
-
31
Other tax liabilities
37
103
Present value of liability of puttable shares
-
494
Other deposits
40
71
Others
80
69
1,312
2,742
Note: Accrued expenses mainly comprise of payroll and welfare, advertising and marketing, operating lease rental and other operating expenses.

Deferred revenue

Deferred revenue12 Months Ended
Dec. 31, 2018
Disclosure Of Deferred Revenue [Abstract]
Deferred revenue23
Deferred revenue
As of December 31,
2017 RMB’million
2018 RMB’million
Non-current
-
27
Current
978
1,431
978
1,458
Deferred revenue mainly represents contract liabilities in relation to the service fees prepaid by customers for time-based virtual gifts, membership subscriptions, and digital music albums or Revenue recognized for the years ended December 31, 2016, 2017 and 2018 related to carried-forward contract liabilities amounted to RMB126 million, RMB372 million and RMB978 million, respectively.

Business Combination

Business Combination12 Months Ended
Dec. 31, 2018
Disclosure Of Business Combinations [Abstract]
Business Combination24
Business combination
(a)
(a)Acquisition of CMC in 2016 As detailed in Notes 1.2 and 2.1, the Merger is accounted for as a reverse acquisition under IFRS 3 of which Tencent PRC Music Business is regarded as the accounting acquirer, whereas the CMC music business is regarded as the accounting acquiree. As a result of the Merger, the Group is expected to increase its presence in online music industry in China. Goodwill arising from the Merger was attributable to increased presence in the online music in China, operating synergies and economies of scale expected from the combined operations of the Group and CMC. The goodwill recognized was not expected to be deductible for income tax purpose. In applying the reverse acquisition accounting, the consideration deemed to be given by the Tencent PRC Music Business was RMB17,999 million, which is the fair value of the Company immediately prior to the Merger using income approach, the discounted cash flow model. The following table summarizes the consideration transferred and the amount of identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the non-controlling interest in CMC at the acquisition date.
RMB’million
Purchase consideration
17,999
Fair value of non-controlling interest
6
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
676
Short-term investments
632
Accounts and other receivables
207
Intangible assets
2,213
Available-for-sale financial assets
10
Property, equipment and software
96
Prepayments, deposits and other assets
744
Dividend payable
(1,251
)
Other payables, accruals and other current liabilities
(640
)
Deferred revenue
(26
)
Deferred tax liabilities
(383
)
Other liabilities
(35
)
Goodwill
15,762
The revenue and profit before income tax of accounting acquiree, CMC that have been included in the consolidated financial statements for the year ended December 31, 2016 since July 12, 2016 amounted to RMB2,474 million and RMB731 million, respectively. The Group’s pro forma financial performance for the year ended December 31, 2016 as if the Merger had occurred on January 1, 2016 is presented below:
RMB’million
(Unaudited)
Revenue
6,143
Online music services
2,417
Social entertainment services and others
3,726
Gross profit
1,728
Operating profit
58
Profit before income tax
73
Profit after tax
41
24
Business combination (Continued)
( a )
Acquisition of CMC in 2016 (Continued) The Group did not have any material pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and profit before income tax. These pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what operating results would have been had the acquisition taken place as of the beginning of the periods presented and may not be indicative of future operating results. Transaction costs of the acquisition of CMC were not significant and were charged to general and administrative expenses in the consolidated income statement during the year ended December 31, 2016.
(b)
Acquisition of Ultimate Music Inc. in 2017 In October 2017, the Group completed the acquisition of 100% ordinary shares of Ultimate Music Inc. (the “Ultimate”). Ultimate is principally engaged in online music operations. According to the terms agreed among the sellers and the Group, the purchase consideration of the acquisition comprise of (i) an aggregate amount of approximately RMB463 million to be settled unconditionally, including cash and certain ordinary shares of the Company to be issued before June 30, 2018 ("Unconditional Consideration"), and (ii) cash of US$26 million to be paid in certain instalments in 4 years and approximately 26,543,339 or ordinary shares of the Company to be issued in several tranches in coming years, subject to certain services condition mainly relating to the continuing employment of sellers management after acquisition ("Contingent Consideration"). The Contingent Consideration will be forfeited if the employment terminates, therefore, it was accounted for as post-acquisition employment compensation while the unconditional consideration was accounted for as purchase consideration. As a result of the acquisition, the Group is expected to increase its presence in online music industry in China. Goodwill arising from the acquisition was attributable to expected operating synergies as well as an increase in coverage of the online music market in China. The goodwill recognized was not expected to be deductible for income tax purpose. The following table summarizes the consideration transferred and the amount of identified assets acquired and liabilities assumed at the acquisition date.
RMB’million
Purchase consideration
463
Fair value of existing interest in Ultimate
72
535
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
33
Accounts and other receivables
9
Intangible assets
24
Prepayments, deposits and other assets
21
Deferred revenue
(1
)
Other payables and accruals
(41
)
Deferred tax liabilities
(10
)
Goodwill
500
The revenue and the results contributed by Ultimate to the Group for the period since the completion date were insignificant. The Group’s revenue and results for the year would not be materially different should the acquisition of Ultimate otherwise occur on January 1, 2017. Transaction costs of the acquisition of Ultimate were not significant and were charged to general and administrative expenses in the consolidated income statement during the year ended December 31, 2017.
24
Business combination (Continued)
(c)
Acquisition of a music content company in 2018 In October 2018, the Company acquired the entire equity interest of a music contents production company at a cash consideration comprising of a fixed amount and a variable amount, settlement in certain tranches, to enhance its music contents library. The variable amount is determined based on certain operation and financial performance of the acquiree and up to RMB400 million. As of the acquisition date, the fixed consideration was recognized at its present value and the variable consideration was recognized at fair value of approximately RMB63 million determined by management. As a result of the acquisition, the Group is expected to increase its presence in online music industry in China. Goodwill arising from the acquisition was attributable to an increase in coverage of the online music market of China. The goodwill recognized was not expected to be deductible for income tax purpose. The following table summarizes the amount of identified assets acquired and liabilities assumed at the acquisition date.
RMB’million
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
68
Accounts and other receivables
101
Intangible assets
297
Prepayments, deposits and other assets
162
Deferred revenue
(18
)
Other payables and accruals
(57
)
Deferred tax liabilities
(105
)
Goodwill
798
1,246
The revenue and the results contributed by the acquiree to the Group for the period since the completion date were insignificant. The Group’s revenue and results for the year would not be materially different should the acquisition otherwise occur on January 1, 2018.
Transaction costs were not significant and were charged to general and administrative expenses in the consolidated income statement during the year ended December 31, 2018.
( d )
Other acquisitions in 2018 During the year ended December 31, 2018, the Group also acquired certain insignificant subsidiaries.

Acquisition of subsidiaries acc

Acquisition of subsidiaries accounted for as business combination under common control12 Months Ended
Dec. 31, 2018
Disclosure Of Business Combinations [Abstract]
Acquisition of subsidiaries accounted for as business combination under common control25
Acquisition of subsidiaries accounted for as business combination under common control On September 1, 2018, the Company acquired all the remaining interest of an associate, UEC, from Tencent and other shareholders, which included a director of the Company, for an aggregated consideration comprising of 12,781,204 and 10,302,804 ordinary shares of the Company, respectively amounting to approximately US$151 million (equivalents to approximately RMB1,027 million). 460,724 share options of the Company were also granted to employee of UEC to replace their outstanding share options. Upon completion of the acquisition, UEC became a wholly-owned subsidiary of the Company.
25
Acquisition of subsidiaries accounted for as business combination under common control (Continued) As the Company and UEC are under common control of Tencent, the acquisition to the extent of the acquired interest from Tencent was accounted for as a business combination under common control. Accordingly, the Group incorporate the book value of the assets and liabilities of UEC in its financial statements which mainly comprise of cash and cash equivalents of RMB397 million, accounts receivable of RMB39 million, accounts payable of RMB16 million, other payables and accruals of RMB34 million, other net assets of RMB20 million and non-controlling interests of RMB22 million. Any difference between the purchase price paid to Tencent and the attributable portion of net book value of net assets acquired was recognized in equity as merger reserve. The acquisition of the remaining interest from other shareholders was accounted for as a transaction with non-controlling interests. Any difference between the purchase price paid to other shareholders and the attributable portion of net book value of net assets acquired was recognized in equity as capital reserve. The Group accounts for the business combination between entities under common control using the predecessor accounting. The Group elects to incorporate the acquired entity’s results only from the date on which the business combination between entities under common control occurred. Consequently, the consolidated financial statements do not reflect the results of the acquired entity for the period before the transaction occurred. The corresponding amount for the previous year are also not restated.

Cash flow information

Cash flow information12 Months Ended
Dec. 31, 2018
Disclosure Of Cash Flow Information [Abstract]
Cash flow information26
Cash flow information
(a)
Cash generated from operations
2016
2017
2018
RMB’million
RMB’million
RMB’million
Profit before income tax
114
1,597
2,003
Adjustments for:
Depreciation and amortization
236
379
369
Impairment provision for investments in associates (Note 6)
-
2
2
Provision for doubtful accounts (Note 17)
7
6
3
Non-cash employee benefits expense – share based payments (Note 7)
170
362
487
Non-cash share-based payments arising from issues of ordinary shares to music label partners(Note 19(iv))
-
-
1,519
Fair value losses on other investments
-
-
30
Net (gains)/losses in relation to equity investments
(4
)
(72
)
20
Share of (profit)/loss of associates and joint ventures (Note 13)
(11
)
(4
)
1
Interest income
(32
)
(93
)
(282
)
Fair value change on puttable shares
-
-
35
Net exchange differences (Note 6)
23
(18
)
31
Increase in accounts receivable
(266
)
(447
)
(182
)
Increase in inventories
(11
)
(16
)
(4
)
Increase/(decrease) in other operating assets
193
(137
)
(789
)
Increase in accounts payables
315
4
780
Increase in other operating liabilities
174
1,051
1,581
Cash generated from operations
908
2,614
5,604
26
Cash flow information (Continued)
(b)
Non-cash investing and financing activities
2016 RMB’million
2017 RMB’million
2018 RMB’million
Issuance of ordinary shares to music label partners
-
-
1,519
Issuance of ordinary shares for business combinations
17,999
-
-
Issuance of ordinary shares for equity investments
-
7,547
1,027
Distribution to Tencent
-
(3,774
)
-
Other payable for business combinations
-
277
-
Issuing restricted shares for business combinations
-
149
-
Settlement of dividend by issuance of shares
138
58
-
Other receivables from disposal of long term investments
16
-
-
Other payable for acquisition of investments in Joint ventures
-
46
-
Insurance of ordinary shares for licensing of contents
30
-
-

Financial instruments by catego

Financial instruments by category12 Months Ended
Dec. 31, 2018
Disclosure Of Financial Instruments [Abstract]
Financial instruments by category27
Financial instruments by category The Group holds the following financial instruments:
Financial assets
Loans and receivables RMB’million
Other investments RMB’million
Financial assets at fair value through other comprehensive income RMB’million
Available- for-sale financial assets RMB’million
Total RMB’million
As at December 31, 2017
Accounts receivable (Note 17)
1,161
-
-
-
1,161
Other receivables (Note 16)
133
-
-
-
133
Available-for-sale financial assets (Note 14)
-
-
-
3,740
3,740
Cash and cash equivalents (Note 18)
5,174
-
-
-
5,174
6,468
-
-
3,740
10,208
As at December 31, 2018
Accounts receivable (Note 17)
1,483
-
-
-
1,483
Other receivables (Note 16)
80
-
-
-
80
Cash and cash equivalents (Note 18)
17,356
-
-
-
17,356
Other investments
-
256
-
-
256
Financial assets at fair value through other comprehensive income
-
-
3,331
-
3,331
18,919
256
3,331
-
22,506
27
Financial instruments by category (Continued)
Financial liabilities
Liabilities at amortized cost RMB’million
As at December 31, 2017
Accounts payable
1,045
Other payables and accruals (note)
787
1,832
As at December 31, 2018
Accounts payable
1,830
Other payables and accruals (note)
1,902
3,732
Note: Other payables and accruals exclude prepayment received from customers and others, staff costs, welfare accruals, other tax liabilities, government grant and deferred revenue.

Commitments

Commitments12 Months Ended
Dec. 31, 2018
Capital Commitments [Abstract]
Commitments28
Commitments
(a)
Non-cancellable operating leases The following table summarizes future minimum commitments of the Group under non-cancelable operating arrangements, which are mainly related to leased facilities and rental of bandwidth:
2017 RMB’million
2018 RMB’million
Within one year
61
212
Later than one year but not later than five years
44
93
105
305
(b)
Contents royalty The Group is subject to the following minimum royalty payments associated with its license agreements:
2017
2018
RMB’million
RMB’million
Within one year
1,821
3,599
Later than one year but not later than five years
3,102
2,284
More than 5 years
-
2
4,923
5,885
(c)
Capital commitments As of December 31, 2017 and 2018, the Company had commitments for non-cancelable agreements to leasehold improvements of RMB4 million and RMB1 million, respectively.
(d)
Investment commitments As of December 31, 2017 and 2018, the Group had commitments of approximately RMB52 million and RMB 94 million to invest in certain entities to hold the equity interest in such entities.

Related Party Transactions

Related Party Transactions12 Months Ended
Dec. 31, 2018
Disclosure Of Transactions Between Related Parties [Abstract]
Related Party Transactions29
Related party transactions The table below sets forth the major related parties and their relationships with the Group as of December 31, 2018:
Name of related parties
Relationship with the Group
Tencent and its subsidiaries other than the entities controlled by the Group (“Tencent Group”)
The Company’s principal owner
Beijing Quku Techsnology Co., Ltd.
The Company’s associate
Beijing Tianhao Shengshi Music Cultural Ltd.
The Company’s associate
Nanjing Jiyun Cultural Development Ltd.
The Company’s associate, before May 31, 2018
UEC and its subsidiaries
The Company’s associate, before August 31, 2018
(b)
Transactions For the years ended December 31, 2017 and 2018, significant related party transactions were as follows:
2016 RMB’million
2017 RMB’million
2018 RMB’million
Revenue
Online music services to Tencent Group
90
33
51
Online music services to associates of Tencent Group
-
-
18
Social entertainment services and others to the Company’s associates and associates of Tencent Group
15
20
63
Expenses
Operation expenses recharged by Tencent Group
428
493
589
Advertising agency cost to Tencent Group
151
187
207
Content royalties to the Company’s associates and associates of Tencent Group
18
45
88
Other channel cost to associates of Tencent Group
-
-
14
Pursuant to the Business Cooperation Agreement signed upon the Merger, the Group is entitled to the revenue generated from music copyrights sublicensing contracts signed by Tencent Group prior to the merger. As at December 31, 2016, 2017 and 2018, there were no accounts receivable arising from such arrangement. During the year ended December 31, 2017, certain contents of the Group have been used by Tencent Group and no revenue was recognized for such usage. These related party transactions were conducted at prices and terms as agreed by parties involved.
29
Related party transactions (Continued)
(c)
Balances with related parties
2017
2018
RMB’million
RMB’million
Included in accounts receivable from related parties:
Tencent Group (note)
651
971
The Company's associates and associates of Tencent Group
8
39
Included in prepayments, deposits and other assets from related parties:
Tencent Group
59
28
The Company's associates and associates of Tencent Group
26
16
Included in accounts payable to related parties:
Tencent Group
104
529
The Company's associates
5
1
Included in other payables and accruals to related parties:
Tencent Group
59
135
Outstanding balances are unsecured and are repayable on demand. Note: The balance is mainly arising from user payments collected through various payment channels of Tencent Group pursuant to the Business Cooperation Agreement signed upon the Merger.
(d)
Key management personnel compensation
2016
2017
2018
RMB’million
RMB’million
RMB’million
Short-term employee benefits
24
46
64
Share-based compensation
54
107
223
78
153
287

Contingent liabilities

Contingent liabilities12 Months Ended
Dec. 31, 2018
Disclosure Of Contingent Liabilities [Abstract]
Contingent liabilities30
Contingent liabilities The Group is involved in a number of claims pending in various courts, in arbitration, or otherwise unresolved as of December 31, 2018. These claims are mainly related to alleged copyright infringement as well as routine and incidental matters to its business, among others. Adverse results in these claims may include awards of damages and may also result in, or even compel, a change in the Company’s business practices, which could impact the Company’s future financial results. The Group has made accruals in “Other payables and accruals” in the consolidated balance sheet as of December 31, 2018 and recognized related expenses for the year ended December 31, 2018. The Company is unable to estimate the reasonably possible loss or a range of reasonably possible losses for proceedings in the early stages or where there is a lack of clear or consistent interpretation of laws specific to the industry-specific complaints among different jurisdictions. Although the results of unsettled litigations and claims cannot be predicted with certainty, the Company does not believe that, as of December 31, 2018, there was at least a reasonable possibility that the Company may have incurred a material loss, or a material loss in excess of the accrued expenses, with respect to such loss contingencies. The losses accrued include judgments handed down by the court and out-of-court settlements after December 31, 2018, but related to cases arising on or before December 31, 2018. The Company is in the process of appealing certain judgments for which losses have been accrued. However, the ultimate timing and outcome of pending litigation is inherently uncertain. Therefore, although management considers the likelihood of a material loss for all pending claims, both asserted and unasserted, to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in excess of management’s expectations, the Company’s consolidated financial statements of a particular reporting period could be materially adversely affected. 30 On December 6, 2018, the Company became aware of an arbitration (the “Arbitration”) filed by an individual named Mr. Hanwei Guo (the “Claimant”) before the China International Economic and Trade Arbitration Commission, or CIETAC. The Arbitration named Mr. Guomin Xie (the Co- President and a director of the Company), CMC, and certain affiliates of CMC as respondents (collectively, the “Respondents”). In 2012, Mr Xie co-founded CMC and the Claimant become an investor in CMC’s business by acquiring substantial stakes in entities including CMC, Ocean Interactive (Beijing) Technology Co., Ltd. (“Ocean Technology”) and Ocean Interactive (Beijing) Culture Co., Ltd. (“Ocean Culture”). The Claimant alleged that Mr. Xie defrauded and threatened him into signing a series of agreements in late 2013 to relinquish his substantial investment interests in multiple entities, including CMC, Ocean Culture and Ocean Technology (together, the Ocean Music entities”), and transferring his equity interests in the Ocean Music Entities to Mr. Xie, CMC and certain other Respondents at below-market value. The Claimant seeks an award from CIETAC ruling, among other things, that (i) such agreements, pursuant to which the Claimant allegedly transferred his interests in the Ocean Music Entities to Mr. Xie, CMC and other Respondents, be declared invalid; (ii) Mr. Xie, CMC and other applicable Respondents return to Claimant all of his initial equity interests in the Ocean Music Entities; and (iii) the Respondents pay damages in the amount of RMB100 million (US$14.6 million). In addition, the Claimant filed a Petition for an Order to Take Discovery (the “Discovery Petition”) with the U.S. District Court of the Southern District of New York (the “District Court”) on December 5, 2018, whereby he seeks to subpoena certain documents in support of his allegations in the Arbitration from Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Morgan Stanley & Co. LLC, each of which is an underwriter of the Company in the Offering on December 12, 2018, for use in the Arbitration. The Company and the underwriters opposed the Claimant’s Discovery Petition by filing Oppositions in the District Court on December 21, 2018. On February 25, 2019, the Discovery Petition was denied by the District Court. On March 27, 2019, the Claimant filed a notice of appeal with the United States Court of Appeals for the Second Circuit regarding the denial of the Discovery Petition. As of date of this report, the Company is not aware of any such order granted by the United States Court of Appeals. CMC was acquired by Tencent in 2016 and subsequently was renamed as Tencent Music Entertainment Group. As a result of the merger of CMC’s operations and Tencent’s former music businesses in 2016, Ocean Culture and Ocean technology also became the Company’s PRC consolidated entities.
The Arbitration is currently pending for hearing as of the report date. Although both the Company and Mr. Xie intend to contest the Claimant’s claims vigorously, the Company is of the view that this pending Arbitration is still at an early stage and therefore it is unable to determine the likelihood of an unfavorable outcome of such Arbitration.

Events occurring after the repo

Events occurring after the reporting period12 Months Ended
Dec. 31, 2018
Disclosure Of Nonadjusting Events After Reporting Period [Abstract]
Events occurring after the reporting period31
Events occurring after the reporting period There were no material subsequent events during the period from 31 December 2018 to the approval date of these financial statements by the Board of Directors on April 19, 2019.

Approval of these consolidated

Approval of these consolidated financial statements12 Months Ended
Dec. 31, 2018
Approval Of Consolidated Financial Statements [Abstract]
Approval of these consolidated financial statements32
These consolidated financial statements were approved for issue by the board of directors of the Company on April 19, 2019.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)12 Months Ended
Dec. 31, 2018
Disclosure Of Significant Accounting Policies [Abstract]
Basis of preparation2.1
Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with the International Financial Reporting Standards (“IFRSs”) as issued by International Accounting Standards Board (“IASB”). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of other investments, financial assets at fair value through other comprehensive income and short-term investments, which are carried at fair value. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4.
(a)
Carve out financial information of Tencent PRC Music Business As stated in Note 1.2 above, immediately prior to the Merger, the Tencent PRC Music Business was held and operated by a number of entities controlled by Tencent, and did not exist as a separate legally constituted group. Accordingly, the financial position and performance of the Tencent PRC Music Business for the period from January 1, 2016 to July 12, 2016 (the “Carve-out Period”) which included in the year ended December 31, 2016 is prepared using the carrying values of Tencent PRC Music Business on a standalone basis from Tencent’s perspective. During the Carve-out Period, the financial information of Tencent PRC Music Business is derived from the historical accounting records of Tencent on the following basis:
(i)
Income statement of the Tencent PRC Music Business for the Carve-out Period includes all revenues, related costs, expenses and charges directly generated or incurred by the Tencent PRC Music Business. Balance sheet of the Tencent PRC Music Business include the assets and liabilities that are directly related and clearly identified to the Tencent PRC Music Business.
2
Summary of significant accounting policies (Continued)
1
Basis of preparation (Continued)
(a)
Carve out financial information of Tencent PRC Music Business (Continued)
(ii)
Any funding received from/paid to Tencent and its group entities/operations other than the Tencent PRC Music Business in the Carve-out Period are treated as deemed capital contribution or return of contributions within the equity. Accounts receivable and other current assets, and accounts payable and other current liabilities received or settled by Tencent are also treated as deemed capital contribution or return of contributions within the equity.
(iii)
Certain common operating and administrative expense incurred by the Tencent PRC Music Business in conjunction with other business operations of Tencent, including financial, human resources, office administration and other support functions are reallocated to the Tencent PRC Music Business primarily based on certain pre- determined charge rates per headcount of the Tencent PRC Music Business, which management believes represent a reasonable allocation methodology as these charge rates are consistent across Tencent.
(iv)
The retained earnings/accumulated deficits within the equity represents the deficit or excess of total assets over total liabilities during the Carve-out Period. The financial information for the Carve-out Period may not necessarily be indicative of the Tencent PRC Music Business’ financial position, results of operating activities or cash flows had it operated as a separate entity throughout the Carve-out Period presented or for future periods.
(b)
Reverse Acquisition of CMC Under the reverse acquisition accounting, these consolidated financial statements represent the continuation of the financial statements of the Tencent PRC Music Business (being the legal acquiree and accounting acquirer) except for its capital structure, which reflect the following:
(i)
the assets and liabilities of the legal acquiree (the accounting acquirer) recognized and measured at their pre-combination carrying amounts;
(ii)
the assets and liabilities of the legal parent (the accounting acquiree) recognized and measured at their fair value as at July 12, 2016, the date of the reverse acquisition in accordance with IFRS 3;
(iii)
the retained earnings and other equity balances of the legal acquiree before the business combination; and
(iv)
the amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal acquiree (the accounting acquirer) outstanding immediately before the business combination to the fair value of the legal parent (accounting acquiree) measured at fair value as at July 12, 2016. However, the equity structure reflects the equity structure of the legal parent (the accounting acquiree), including the equity interests the legal parent issued to effect the Merger. Accordingly, the equity structure of the legal acquiree (the accounting acquirer) is restated using the exchange ratio established in the acquisition agreement to reflect 1,290,862,550 shares of the legal parent (the accounting acquiree) issued in the Merger. In applying the reverse acquisition accounting, the consideration deemed to be given by the Tencent PRC Music Business was RMB 17,999 million, which is the fair value of the Company immediately prior to the Merger. The separately identifiable assets and liabilities of the accounting acquiree recognized in the consolidated statement of financial position were at their fair value as at the date of the reverse acquisition. Goodwill arising from the Merger was recognized on the same date. The results and cash flows of the accounting acquiree are included in the Company's consolidated financial statements from the date of the Merger. Further details are disclosed in Note 24(a).
New and amendments to the accounting standards adopted and recent accounting pronouncements2.2New and amendments to the accounting standards adopted and recent accounting pronouncements
(a)
New and amendments to the accounting standards adopted New and amendments to the standards that effective for the year ended December 31, 2018 do not have a material impact on these consolidated financial statements except IFRS 9 “Financial Instruments”, details of which are set out below: IFRS 9 “Financial instruments” addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The Group has reviewed its financial assets and liabilities and adopted the IFRS 9 on January 1, 2018: Classification and measurement of financial instruments From January 1, 2018, the Group classifies its financial assets in the following categories:

those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss), and

those to be measured at amortized cost. The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. The Group reclassifies debt investments when and only when its business model for managing those assets changes. The effects of the reclassification upon the adoption of IFRS 9 are as below:
Financial assets
at fair value
Available-for-
through other
sale financial
comprehensive
Other
assets
income
investments
RMB’million
RMB’million
RMB’million
At December 31, 2017, as previously reported
3,740
-
-
Reclassification
(3,740
)
3,730
10
At January 1, 2018
-
3,730
10
Other investments represent the financial assets at fair value through profit or loss. There was no impact on the Group’s accounting for financial liabilities as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss, while the Group does not have any such liabilities.
2
Summary of significant accounting policies (Continued)
2.2New and amendments to the accounting standards adopted and recent accounting pronouncements (Continued)
(a)
New and amendments to the accounting standards adopted (Continued) Impairment of financial assets The new impairment model requires the recognition of impairment provisions based on expected credit losses rather than only incurred credit losses as is the case under IAS 39, which is the simplified method. It applies to financial assets classified at amortized cost, debt instruments measured at fair value through other comprehensive income, contract assets under IFRS 15, lease receivables, loan commitments and certain financial guarantee contracts. The changes in the loss allowance for account receivables under the new impairment model was immaterial.
(b)
Recent accounting pronouncements A number of new standards and amendments to standards have not come into effect for the financial year beginning January 1, 2018, and have not been early adopted by the Group in preparing these consolidated financial statements. IFRS 16 will result in almost all leases being recognized on the statement of financial position, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short term and low-value leases. The accounting for lessors will not be significantly changed. The standard will affect primarily the accounting for Group’s operating leases. The Group will apply the standard from its mandatory adoption date of January 1, 2019. The Group intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption. All right-of-use assets will be measured at the amount of the lease liability on adoption (adjusted for any prepaid or accrued lease expenses). The Group expects to recognize right-of-use assets of approximately RMB100 millions and lease liabilities of RMB97 millions on January 1, 2019. The Group expects that net profit after tax will not be materially changed as a result of adopting the new rules. The adoption of new standard will also result in certain reclassification of operating cash flows and financing cash flows. The Group’s activities as a lessor are not material and hence the Group does not expect any significant impact on the consolidated financial statements. IFRS 3 (amendment) clarifies the definition of business. Under the new amendment, to be considered a business, an acquisition would have to include an input and a substantive process that together significantly contribute to the ability to create outputs. The new amendment is mandatory for which the acquisition date is on or after January 1, 2020. The Group does not intend to adopt this standard before its effective date. Apart from the above, other new standards and amendments to standards are not expected to have a significant effect on the consolidated financial information of the Group.
Principles of consolidation and equity accounting2.3
Principles of consolidation and equity accounting
(a)
Subsidiaries Subsidiaries are all entities (including VIEs as stated in Note 1.2 above) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and balance sheet, respectively.
(b)
Associates Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (d) below), after initially being recognized at cost. Interests in associates are accounted for using the equity method of accounting (see (d) below), after initially being recognized at cost in the consolidated balance sheet.
(c)
Joint ventures Interests in joint ventures are accounted for using the equity method (see (d) below), after initially being recognised at cost in the consolidated balance sheet.
(d)
Equity accounting Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group's share of the post-acquisition profits or losses of the investee in profit or loss, and the Group's share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. When the Group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group's interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group. The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in note 2.10 whenever there is an indication that the carrying amount may be impaired in accordance with note 2.11 (b).
Business combinations2.4
Business combinations The acquisition method of accounting is used to account for all business combinations except for the business combinations under common control as stated below, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

fair values of the assets transferred

liabilities incurred to the former owners of the acquired business

equity interests issued by the Group

fair value of any asset or liability resulting from a contingent consideration arrangement, and

fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition-by- acquisition basis either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets. Acquisition-related costs are expensed as incurred. The excess of the

consideration transferred,

amount of any non-controlling interest in the acquired entity, and

acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.
Business combination under common control The Group accounts for the business combination between entities under common control using the predecessor accounting. For predecessor accounting:

Assets and liabilities of the acquired entity are stated at predecessor carrying values. Fair value measurement is not required.

No new goodwill arises in predecessor accounting.

Any difference between the consideration given and the aggregate carrying value of the assets and liabilities of the acquired entity at the date of the transaction is included in equity in retained earnings or in a separate reserve. The Group does not restate any assets and liabilities of the acquired entity. The assets and liabilities of the acquired entity are consolidated using the predecessor’s amounts from the controlling party’s perspective. No new goodwill is recorded. Any difference between the cost of investment and the carrying value of the net assets is recorded in equity as merger reserve. The Group elects to incorporate the acquired entity’s results only from the date on which the business combination between entities under common control occurred. Consequently, the consolidated financial statements do not reflect the results of the acquired entity for the period before the transaction occurred. The corresponding amount for the previous year are also not restated.
Segment reporting2.5
Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers, who are responsible for allocating resources and assessing performance of the operating segments and making strategic decisions. The Group's chief operating decision makers have been identified as the executive directors of the Company, who review the consolidated results of operations when making decisions about allocating resources and assessing performance of the Group as a whole. For the purpose of internal reporting and management's operation review, the chief operating decision-makers and management personnel do not segregate the Group's business by product or service lines. Hence, the Group has only one operating segment. In addition, the Group does not distinguish between markets or segments for the purpose of internal reporting. As the Group's assets and liabilities are substantially located in the PRC, substantially all revenues are earned and substantially all expenses are incurred in the PRC, no geographical segments are presented.
Foreign currency translation2.6
b)
Functional and presentation currency Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The functional currency of the Company is United States Dollars (“US$”). As the major operations of the Group are within the PRC, the Group presents its consolidated financial statements in Renminbi (“RMB”), unless otherwise stated.
c)
Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in the income statement. Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within fair value change on liabilities of puttable shares. All other foreign exchange gains and losses are presented in the income statement on a net basis within other (losses)/gains, net.
d)
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet

income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and

all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate. Currency translation differences arising are recognized in other comprehensive income.
Property, plant and equipment2.7
Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:
Servers and network equipment
3 - 5 years
Office furniture, equipment and others
3 - 5 years
Leasehold improvements
Shorter of expected lives of leasehold improvements and lease term The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 2.10). Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the income statement.
Goodwill2.8
Goodwill Goodwill is measured as described in Note 2.10. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units (“CGUs”) for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the operating segments.
Other intangible assets2.9
(a)
Domain name, trademark and Internet audio/video program transmission license Separately acquired domain name, trademark and Internet audio/video program transmission license are shown at historical cost. These assets acquired in a business combination are recognized at fair value at the acquisition date. Domain name, trademark and Internet audio/video program transmission license have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight- line method to allocate the cost of these assets and over their respective useful live of no more than 12 years. The useful lives of these assets are the periods over which they are expected to be available for use by the Group, and the management of the Group also take into account of past experience when estimating the useful lives.
2
Summary of significant accounting policies (Continued)
2.9
(b)
Other intangible assets acquired in a business combination Other intangible assets acquired in a business combination are recognized initially at fair value at the acquisition date and subsequently carried at the amount initially recognized less accumulated amortization and impairment loss, if any. Amortization is calculated using the straight-line method to allocate the costs of acquired intangible assets over the following estimated useful lives:
Online users
1 year
Corporate customer relationship
3 - 4 years
Supplier resources
3 - 6 years
Non-compete agreements
4 - 5 years
Copyrights
2 - 5 years
Impairment of non-financial assets2.10
Impairment of non-financial assets Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment review on the goodwill of the Group is conducted by the management as at December 31 according to IAS 36 "Impairment of assets". An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
Investments and other financial assets2.11
Investments and other financial assets
(a)
Classification and measurement From January 1, 2018, the Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

those to be measured at amortized cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. The Group reclassifies debt investments when and only when its business model for managing those assets changes. Purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
2
Summary of significant accounting policies (Continued)
2.11
Investments and other financial assets (Continued)
(a)
Classification and measurement (Continued) At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. Debt instruments Initial recognition and subsequent measurement of debt instruments depend on the Group’s business model for managing the asset and the contractual cash flow characteristics of the asset. There are three categories into which the Group classifies its debt instruments:

Amortized cost: Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are classified as and measured at amortized cost. A gain or loss on a debt investment measured at amortized cost which is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is recognized using the effective interest rate method.

Fair value through other comprehensive income: Financial assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are classified as and measured at fair value through other comprehensive income. Movements in the carrying amount of these financial assets are taken through other comprehensive income, except for the recognition of impairment losses or reversals, interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss and recognized in “other (losses)/gains, net” in the consolidated income statement. Interest income from these financial assets is recognized using the effective interest rate method. Foreign exchange gains and losses and impairment losses or reversals are presented in “other (losses)/gains, net”.

Fair value through profit or loss: Financial assets that do not meet the criteria for amortized cost or fair value through other comprehensive income are classified as and measured at fair value through profit or loss. A gain or loss on a debt investment measured at fair value through profit or loss which is not part of a hedging relationship is recognized in profit or loss and presented in “other (losses)/ gains, net” for the period in which it arises. Equity instruments The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established. Changes in the fair value of financial assets at fair value through profit or loss are recognized in “other (losses)/gains, net” fair value through other comprehensive income
2
Summary of significant accounting policies (Continued)
2.11
Investments and other financial assets (Continued)
(b)
Impairment From January 1, 2018, the Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For accounts receivable and contract assets, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized since initial recognition. Impairment on deposits and other receivables is measured as either 12-month expected credit losses or lifetime expected credit losses, depending on whether there has been a significant increase in credit risk since initial recognition. If a significant increase in credit risk of a deposit or receivable has occurred since initial recognition, the impairment is measured as lifetime expected credit losses. The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
(c)
Accounting policies applied until December 31, 2017 The Group has applied IFRS 9 retrospectively, but has elected not to restate comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the Group’s previous accounting policy. Until December 31, 2017, the Group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, and available-for- sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period. See Note 27 for details about each type of financial asset.
(i)
Financial assets at fair value through profit or loss The Group classifies financial assets at fair value through profit or loss if they are acquired principally for the purpose of selling in the short term, i.e. are held for trading. They are presented as current assets if they are expected to be sold within 12 months after the end of the reporting period; otherwise they are presented as non- current assets. The Group's short-term investments were classified as financial assets at fair value through profit or loss.
(ii)
Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. If collection of the amounts is expected in one year or less they are classified as current assets. If not, they are presented as non-current assets. The Group's loans and receivables comprise of trade and other receivables and cash and cash equivalents.
(iii)
Available-for-sale financial assets Investments are designated as available-for-sale financial assets if they do not have fixed maturities and fixed or determinable payments, and management intends to hold them for the medium to long-term. Financial assets that are not classified into any of the other categories (at fair value through profit or loss, loans and receivables or held-to-maturity investments) are also included in the available-for-sale category.
2
Summary of significant accounting policies (Continued)
2.11
Investments and other financial assets (Continued)
(c)
Accounting policies applied until December 31, 2017 (Continued) The financial assets are presented as non-current assets unless they mature, or management intends to dispose of them within 12 months of the end of the reporting period. Purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognized in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities. At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the income statement. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value are recognized as follows:

for “financial assets at fair value through profit or loss” – in profit or loss within other gains/losses

for “available-for-sale financial assets” that are monetary securities denominated in a foreign currency – translation differences related to changes in the amortized cost of the security are recognized in the income statement and other changes in the carrying amount are recognized in other comprehensive income

for other monetary and non-monetary securities classified as available-for-sale – in other comprehensive income. Dividends on financial assets at fair value through profit or loss and available-for-sale equity instruments are recognized in the income statement when the Group’s right to receive payments is established. Interest income from financial assets at fair value through profit or loss and on loans and receivables calculated using the effective interest method are recognized as interest income in the income statement. Details on how the fair value of financial instruments is determined are disclosed in Note 3.3. The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.
(i)
Assets carried at amortized cost For loans and receivables, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in income statement. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Group may measure impairment on the basis of an instrument's fair value using an observable market price. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the reversal of the previously recognized impairment loss is recognized in income statement. Impairment testing of accounts receivable is described in Note 17.
(ii)
Assets classified as available-for-sale If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss-measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in income statement-is removed from equity and recognized in the income statement. Impairment losses on equity instruments that were recognized in income statement are not reversed through profit or loss in a subsequent period. If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can be objectively related to an event occurring after the impairment loss was recognized in the income statement, the impairment loss is reversed through income statement.
(d)
Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet where the Company currently has a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The Company has also entered into arrangements that do not meet the criteria for offsetting but still allow for the related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a contract.
Inventories2.12
Inventories, mainly consisting of merchandise for sale, are primarily accounted for using the weighted average method and are stated at the lower of cost and net realizable value.
Accounts receivable2.13
Accounts receivable are amounts due from customers for goods sold or services performed in the ordinary course of business. Accounts receivable is generally due for settlement within 30 to 90 days and therefore are all classified as current.
Short-term investments2.14
Short-term investments are investments issued by commercial banks in the PRC with a variable interest rate indexed to performance of underlying assets. Since these investments’ maturity dates are within one year, they are classified as current assets.
Cash and cash equivalents2.15
Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other short-term deposits with original maturities of three months or less.
Share capital2.16
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Accounts and other payables2.17
Accounts and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 1 year of recognition. Accounts and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
Current and deferred income tax2.18
The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
(a)
Current income tax The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
(b)
Deferred income tax Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
2
Summary of significant accounting policies (Continued)
2.18
(c)
Offsetting Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
( d )
Uncertain tax positions In determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes, interest or penalties may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgment regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made.
Employee benefits2.19
(a)
Employee leave entitlements Employee entitlements to annual leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period. Employee entitlements to sick and maternity leave are not recognized until the time of leave.
(b)
Pension obligations The Group participates in various defined contribution retirement benefit plans which are available to all relevant employees. These plans are generally funded through payments to schemes established by governments or trustee-administered funds. A defined contribution plan is a pension plan under which the Group pays contributions on a mandatory, contractual or voluntary basis into a separate fund. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee services in the current and prior periods. The Group's contributions to the defined contribution plans are expensed as incurred and not reduced by contributions forfeited by those employees who leave the plan prior to vesting fully in the contributions.
Share-based payments2.20
The Group operates a number of equity-settled share-based compensation plan (including share option schemes and share award schemes), under which the Group receives services from employees as consideration for equity instruments (including stock options and restricted shares units (“RSUs”)) of the Group. In addition, the controlling shareholder, Tencent, also operates certain share based compensation plans (mainly share option schemes and share award schemes) which may cover the employees of the Group. Share awards granted to the employees of the Group are measured at the grant date based on the fair value of equity instruments and are recognized as an expense over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied, and credited to equity as “share-based compensation reserve” if it is related to equity instruments of the Company or as “contribution from ultimate holding company” if it is related to equity instruments of Tencent. For grant of share options, the total amount to be expensed is determined by reference to the fair value of the options granted by using Binomial model (the “Binomial Model”). The determination of the fair value is affected by the share price as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, expected forfeiture rate, risk- free interest rates, contract life and expected dividends. For grant of award shares, the total amount to be expensed is determined by reference to the fair value of the Company or market price of Tencent’s shares at the grant date. Forfeitures are estimated at the time of grant and revised in the subsequent periods if actual forfeitures differ from those estimates.
Provisions2.21
Provisions for legal claims and service warranties are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Revenue recognition2.22
The Group generates revenues primarily from provision of music entertainment services, such as paid music, virtual gifts sales and content sublicensing, and online advertising. Revenue is recognized when or as the control of the services or goods is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the services and goods may be transferred over time or at a point in time.
(a)
Revenue from online music services Online music services revenues primarily include revenues from paid subscriptions, sale of digital music singles and albums, content sublicensing and online advertising. The Group provides to users certain subscription packages which entitle paying subscribers a fixed amount of non-accumulating downloads per month and unlimited "ad-free" streaming of the Group's full music content offerings with certain privilege features on its music platforms. The subscription fee for these packages is time-based and is collected upfront from subscribers. The terms of time-based subscriptions range from one month to twelve months. The receipt of subscription fee is initially recorded as deferred revenue. The Group satisfies its various performance obligations by providing services throughout the subscription period and revenue is recognized accordingly. The Group also provides its users to purchase early release access to certain new digital music singles and albums. These singles and albums can be downloaded and streamed only through the Group's platform. Such music singles and albums will be made available to all users to access after the initial launch period which is generally 3 months. The Group considers that it provides the early access to the newly launched singles and albums within its platform as opposed to providing functional intellectual property to the users. As a result, the performance obligation of providing early access is satisfied over time. The above services can be paid directly by users by way of online payment channels or through various third party platforms. The Group records revenue on gross basis according to the criteria stated in (c) below and recognizes service fees levied by online payment channels or third party platforms ("Channel Fees") as the cost of revenues in the same period as the related revenue is recognized. The Group sublicenses certain of the Group's music content to other music platforms for a fixed period of time, typically one year, that falls within the original license period. The Group is obliged to replicate the licensed content library for any subsequent changes in the contents, including any new contents or removal of existing contents, updated by the contents partners any time during the sublicense period. As a result, the Group determines sublicense of contents as a single performance obligation. Revenues from sublicensing the contents is recognized over the sublicense period. The Group only recognizes revenue when it is highly probable that this will not result in a significant reversal of revenue when any uncertainty is resolved. The Group do not adjust the promised amount of consideration for the effects of any significant financing component as the sublicense period is typically one year.
2
Summary of significant accounting policies (Continued)
2.22
(a)
Revenue from online music services (Continued) Advertising revenue is primarily generated through display ads on the Group's platforms. Advertising contracts are signed to establish the fixed prices and advertising services to be provided based on cost per display ("CPD") or cost per mille ("CPM") arrangements. When the collectability is reasonably assured, advertising revenues from the CPD arrangements that are display ads for an agreed period of time, are recognized ratably over the contract period of display based on a time-based measure of progress as the performance obligation is expended evenly over the period, while revenue from the CPM arrangements are recognized based on the number of times that the advertisement has been displayed. The Group allocates revenue to each performance obligation on a relative stand-alone selling price basis which is determined with reference to the prices charged to customers. The Group also entered into contracts with advertising agencies third-party or entities controlled by Tencent, which represent the Group in negotiation and contracting with advertisers. The Group shares with these advertising agencies a portion of the revenues the Group derives from the advertisers. Revenues are recognized on a gross or net basis based on assessment according to the criteria stated in (c) below. If revenue for advertising through these advertising agencies are recorded at the gross amount, the portion remitted to advertising agencies, including any cash incentive in the form of commissions, is recorded as cost of revenues. If revenue for advertising through these advertising agencies are recorded at the net amount, cash incentives, in the form of commissions to any advertising agencies based on volume and performance, are accounted for as a reduction of revenue, based on expected performance.
(b)
Revenue from social entertainment services and others The Group offers virtual gifts to users for free or sell virtual gifts to users on the Group's online karaoke and live streaming platforms. The virtual gifts are sold to users at different specified prices as pre-determined by the Group. The utilization of each virtual gift sold to users is considered as the performance obligation and the Group allocates revenue to each performance obligation on a relative stand-alone selling price basis, which are determined based on the prices charged to customers. Virtual gifts are categorized as consumable, time-based and durable. Consumable items are consumed upon purchase and use while time-based items could be used for a fixed period. The Group does not have further obligations to the user after the virtual gifts are consumed immediately or after the stated period for time-based items. The revenue for the sale of consumable virtual gifts on the online karaoke and online broadcasting platforms is recognized immediately when a virtual item is consumed or, in the case of a time-based virtual item, recognized ratably over the useful life of the items, which generally does not exceed one year. The Group does not have further obligations to the user after the virtual gifts are consumed. The Group recognizes the revenue for sale of durable virtual gifts over their estimated lifespans of no longer than six months, which are determined by the management based on the expected service period derived from past experiences, given there is an implicit obligation of the Group to maintain the virtual gifts operated on its platforms. The Group may share with performers a portion of the revenues derived from the sale of the virtual gifts on the online karaoke and live streaming platforms. Revenues for the sale of virtual gifts are recorded at the gross amount with the portion remitted to performers is recorded as cost of revenues as the Group considers itself the primary obligor in the sale of virtual gifts with the latitude in establishing prices, and the rights to determine the specifications or change the virtual gifts. In addition to virtual item sales, the Group also generates revenue from online karaoke and live streaming services by selling premium memberships that provide paying users with certain privileges. The fees for these packages are time-based ranging from one month to twelve months and are collected up-front from subscribers. The receipt of subscription fee is initially recorded as deferred revenue. The Group satisfies its performance obligation by providing services over the subscription period and revenue is recognized ratably over the subscription period.
2
Summary of significant accounting policies (Continued)
2.22
(c)
Principal agent consideration The Group reports the revenue on a gross or net basis depending on whether the Group is acting as a principal or an agent in a transaction. The determination of whether to report the revenues of the Group on a gross or net basis is based on an evaluation of whether various factors, including but not limited to whether the Group (i) is the primary obligor in the arrangement; (ii) has latitude in establishing the selling price; (iii) changes the product or performs part of the service; (iv) has involvement in the determination of product and service specifications. The Group does not disclose the information about the remaining performance obligations as the performance obligations of the Group have an expected duration of one year or less.
(d)
Contract liabilities and contract costs
A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.
Contract costs includes incremental costs of obtaining a contract and costs to fulfil a contract.
Interest income2.23
Interest income Interest income is recognized using the effective interest method.
Cost of revenues2.24
Cost of revenues mainly consists of service costs, advertising agency fees, channel fees, amortization of intangible assets, salaries and benefits for operation personnel (including related share-based compensation) and others. Service costs include royalty payments to music content providers and revenue sharing with performers on the online karaoke and live streaming platforms. Payment arrangements with music content providers are mainly calculated under pre-determined revenue sharing based on actual usage of content. Certain arrangements require the Group to pay certain non-recoupable royalty in advance. The Group expenses the non-recoupable royalty on a straight-line basis over the relevant contractual periods and accrues additional royalty costs when revenue sharing during a contractual period is expected to exceed the non-recoupable royalty amounts.
Sales and marketing expenses2.25
Selling and marketing expenses mainly consist of advertising expenses to acquire user traffic for our online music show platforms, salaries and commissions for our sales and marketing personnel (including related share-based compensation) and intangible assets amortization. Advertising costs are included in "Selling and marketing" and are expensed when the service is received.
General and Administrative Expenses2.2 6
General and administrative expenses General and administrative expenses mainly consist of salaries and benefits for management and administrative personnel and research and development personnel (including related share-based compensation), rental and depreciation expenses related to facilities and equipment used by our research and development team, professional service expense, amortization of intangible assets, allowance for doubtful debts and other general corporate expenses. The Group recognizes research and development related costs as expense when incurred as the amount of costs qualifying for capitalization has been immaterial.
Government grants2.27
Government grants Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Leases2.28
Leases Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases (Note 28). Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease. Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classified as operating leases (Note 28). Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease.
Dividends distribution2.29
Dividend distribution to the Company's shareholders is recognized as a liability in the consolidated financial statements in the period in which the dividends are approved by the Company's shareholders or directors, where appropriate. Distribution of non-cash assets to the Company's shareholders is recognized and measured at the fair value of the non-cash assets to be distributed. Any difference between the fair value and the carrying amount of the non-cash assets to be distributed is recognized in the income statement.

General information, organiza_2

General information, organization and basis of preparation (Table)12 Months Ended
Dec. 31, 2018
General Information Organization And Basis Of Preparation [Abstract]
Summary of Significant Subsidiaries, VIEs, and Subsidiaries of VIEsAs of December 31, 2018, the Company’s significant subsidiaries, VIEs, and subsidiaries of VIEs were as follows:
Place of incorporation
Date of Incorporation or acquisition
Equity Interest Held (direct or indirect)
Principal activities
Note
Subsidiaries
Tencent Music Entertainment Hong Kong Limited (“TME Hong Kong”) (formerly known as “Ocean Music Hong Kong Limited”)
Hong Kong
July 2016
100%
Investment holding and music content distribution
(i)
Tencent Music Entertainment (Beijing) Co., Ltd. (“TME Beijing”) (formerly known as “Ocean Interactive (Beijing) Information Technology Co., Ltd.”)
PRC
July 2016
100%
Technical support and consulting services
(i)
Yeelion Online Network Technology (Beijing) Co., Ltd. (‘‘Yeelion Online”)
PRC
July 2016
100%
Technical support and consulting services
(i), (ii)
Tencent Music Entertainment Technology (Shenzhen) Co., Ltd. (''TME Tech Shenzhen")
PRC
February 2017
100%
Online music and entertainment related services
(iv)
Variable Interest Entities
Guangzhou Kugou Computer Technology Co., Ltd. (“Guangzhou Kugou”)
PRC
July 2016
100%
Online music and entertainment related services
(i), (ii)
Beijing Kuwo Technology Co., Ltd.(“Beijing Kuwo”)
PRC
July 2016
100%
Online music and entertainment related services
(i), (ii)
Xizang Qiming Music Co., Ltd.(“Xizang Qiming”)
PRC
February 2018
100%
Music content investments
(v)
Subsidiaries of Variable Interest Entities
Tencent Music Entertainment (Shenzhen) Co., Ltd. (“TME Shenzhen”)
PRC
July 2016
100%
Online music and entertainment related services
(iii) Notes:
(i)
Representing the entities comprising the CMC Music Business immediately prior to the Merger completed on July 12, 2016.
(ii)
CMC Music Business acquired Yeelion Online and Guangzhou Kugou in December 2013 and April 2014, respectively. All these entities were deemed acquired by the Company on July 12, 2016 because of the Merger.
(iii)
In July 2016, Tencent Music Entertainment (Shenzhen) Co., Ltd. (“TME Shenzhen”) was established by the Group for the purpose of operating Tencent PRC Music Business.
(iv)
In February 2017, TME Tech Shenzhen was established by the Group for the purpose of operating Tencent PRC Music Business.
(v)
In February 2018, Xizang Qiming was established by the Group for the purpose of music content investments.
Summary of Condensed Separate Financial StatementsThe following are major financial statements amounts and balances of the Group’s VIEs and subsidiaries of VIEs as of December 31, 2017 and 2018 and for the years ended December 31, 2016, 2017 and 2018.
As at December 31,
2017
2018
RMB’million
RMB’million
Total current assets
6,205
7,199
Total non-current assets
3,872
5,902
Total assets
10,077
13,101
Total current liabilities
(4,661
)
(5,664
)
Total non-current liabilities
(304
)
(562
)
Total liabilities
(4,965
)
(6,226
)
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Total net revenues
3,007
10,948
18,966
Net profit
61
340
1,333
Net cash inflow/(outflow) from operating activities
842
1,763
(334
)
Net cash inflow/(outflow) from investing activities
570
131
(1,244
)
Net cash flow from financing activities
-
-
-
Net increase/(decrease) in cash and cash equivalents
1,412
1,894
(1,578
)
Cash and cash equivalents, beginning of the year
-
1,412
3,306
Cash and cash equivalents, end of the year
1,412
3,306
1,728

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Significant Accounting Policies [Abstract]
Disclosure of Effects of the Reclassification Upon the Adoption of IFRS9The effects of the reclassification upon the adoption of IFRS 9 are as below:
Financial assets
at fair value
Available-for-
through other
sale financial
comprehensive
Other
assets
income
investments
RMB’million
RMB’million
RMB’million
At December 31, 2017, as previously reported
3,740
-
-
Reclassification
(3,740
)
3,730
10
At January 1, 2018
-
3,730
10
Disclosure Of Estimated Useful Lives Property Plant And Equipment ExplanatoryDepreciation is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows:
Servers and network equipment
3 - 5 years
Office furniture, equipment and others
3 - 5 years
Leasehold improvements
Shorter of expected lives of leasehold improvements and lease term
Disclosure of Estimated Useful Lives of Acquired Intangible AssetsOther intangible assets acquired in a business combination are recognized initially at fair value at the acquisition date and subsequently carried at the amount initially recognized less accumulated amortization and impairment loss, if any. Amortization is calculated using the straight-line method to allocate the costs of acquired intangible assets over the following estimated useful lives:
Online users
1 year
Corporate customer relationship
3 - 4 years
Supplier resources
3 - 6 years
Non-compete agreements
4 - 5 years
Copyrights
2 - 5 years

Other (losses)_gains, net (Tabl

Other (losses)/gains, net (Tables)12 Months Ended
Dec. 31, 2018
Other Gains Losses [Abstract]
Summary of Other (losses)/gains, netYear ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Government grants (note)
9
30
52
Impairment provision for investments in associates
-
(2
)
(2
)
Net foreign exchange (losses)/gains
(23
)
18
(31
)
Gain on step-up acquisition arising from business combination (Note 24(b))
-
72
-
Fair value change of financial assets
-
-
(30
)
Others
1
6
(18
)
(13
)
124
(29
)

Expense by nature (Tables)

Expense by nature (Tables)12 Months Ended
Dec. 31, 2018
Default Root [Abstract]
Summary of Expense by NatureNotes:
(i)
Service costs mainly comprise of licensing costs, revenue sharing fees paid to content creators and content delivery costs relating primarily to server, cloud services and bandwidth costs.
(ii)
During the years ended December 31, 2016, 2017 and 2018, the Group incurred expenses for the purpose of research and development of approximately RMB449 million, RMB797 million and RMB937 million, which comprised employee benefits expenses of RMB402 million, RMB724 million and RMB825 million, respectively. No significant development expenses had been capitalized for the years ended December 31, 2016, 2017 and 2018.
(iii)
Employee benefits expenses
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Wages, salaries and bonuses
335
723
1,228
Welfare, medical and other expenses
184
204
293
Share-based compensation expenses
170
384
487
Contribution to pension plans
32
62
69
721
1,373
2,077

Taxation (Tables)

Taxation (Tables)12 Months Ended
Dec. 31, 2018
Major Components Of Tax Expense Income [Abstract]
Summary of Income Tax ExpenseThe income tax expense of the Group are analyzed as follows:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Current income tax
105
353
255
Deferred income tax (note b)
(76
)
(75
)
(84
)
Total income tax expense
29
278
171
Summary of Reconciliation of Income TaxThe taxation on the Group’s profit before income tax differs from the theoretical amount that would arise using the tax rate of 25% for the years ended December 31, 2016, 2017 and 2018, being the tax rate of the major subsidiaries of the Group before enjoying preferential tax treatments, as follows:
8
Taxation (Continued)
(a)
Income tax expense (Continued)
(iii)
PRC (Continued)
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Profit before income tax expense
114
1,597
2,003
Tax calculated at a tax rate of 25%
28
399
501
Effects of different tax rates applicable to different subsidiaries of the Group
28
(56
)
396
Effects of tax holiday on assessable profit of certain subsidiaries
-
(39
)
(530
)
Effects of tax holiday of a subsidiary recognized for prior year
-
-
(116
)
Effects of preferential tax rate on assessable profit of certain subsidiaries
(20
)
(161
)
(230
)
Expense not deductible for tax purposes
63
107
156
Income not subject to tax
(44
)
(10
)
(2
)
Unrecognized deferred income tax assets
36
81
37
Utilization of previously unrecognized tax assets
(48
)
(45
)
(40
)
Others
(14
)
2
(1
)
29
278
171
Summary of Amount and Per Share Effect of Tax HolidayThe aggregate amount and per share effect of the tax holiday are as follows:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Effects of tax holiday on assessable profit of certain subsidiaries
-
39
646
Per share effect—basic
-
0.01
0.21
Per share effect—diluted
-
0.01
0.20
Summary of Profit Before TaxThe Group’s profit before tax consists of:
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Non-PRC
(178
)
266
(1,579
)
PRC
292
1,331
3,582
114
1,597
2,003
Summary of Deferred Tax Assets and Deferred Tax LiabilitiesAs of December 31,
2017
2018
RMB’million
RMB’million
The deferred tax assets comprise temporary differences attributable to:
Prepayment and other investments
6
39
Deferred revenue
24
30
Accruals
45
40
Deemed distribution
25
19
Others
6
3
Total deferred tax assets
106
131
Set-off of deferred tax liabilities pursuant to set-off provisions
(1
)
(8
)
Net deferred tax assets
105
123
The deferred tax liabilities comprise temporary differences attributable to:
Intangible assets acquired in business combinations
298
362
Others
7
-
Total deferred tax liabilities
305
362
Set-off of deferred tax liabilities pursuant to set-off provisions
(1
)
(8
)
Net deferred liabilities
304
354
Summary of Recovery of Deferred Income TaxThe recovery of deferred income tax:
As of December 31,
2017
2018
RMB’million
RMB’million
Deferred tax assets:
to be recovered after more than 12 months
26
44
to be recovered within 12 months
79
79
105
123
Deferred tax liabilities:
to be recovered after more than 12 months
250
284
to be recovered within 12 months
54
70
304
354
Summary of Movements of Deferred Income Tax AssetsThe movements of deferred income tax assets were as follows:
Prepayment and other investments
Deferred revenue
Accruals
Deemed distribution
Others
Total
RMB’million
RMB’million
RMB’million
RMB’million
RMB’million
RMB’million
At January 1, 2016
-
-
-
-
-
-
Credited to income statement
-
31
11
-
1
43
Recognized in equity
-
-
-
36
-
36
Business combination (Note 24)
-
4
-
-
4
8
At December 31, 2016
-
35
11
36
5
87
Credited/(charged) to income statement
6
(11
)
34
(11
)
1
19
At December 31, 2017
6
24
45
25
6
106
Credited/(charged) to income statement
33
6
(5
)
(6
)
(3
)
25
At December 31, 2018
39
30
40
19
3
131
Summary of Movements of Deferred Income Tax LiabilitiesThe movements of deferred income tax liabilities were as follows:
Intangible assets RMB’million
Others RMB’million
Total RMB’million
At January 1, 2016
-
-
-
(Credited)/charged to income statement
(36
)
3
(33
)
Business combination (Note 24)
383
-
383
At December 31, 2016
347
3
350
(Credited)/charged to income statement
(58
)
2
(56
)
Business combination (Note 24)
11
-
11
At December 31, 2017
300
5
305
(Credited)/charged to income statement
(54
)
(5
)
(59
)
Business combination (Note 24)
116
-
116
At December 31, 2018
362
-
362

Earning per share (Tables)

Earning per share (Tables)12 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]
Summary of Earning per shareThe following table sets forth the computation of basic and diluted net income per share:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Basic income per share calculation
Numerator:
Profit for the year attributable to the Company (in millions of RMB)
82
1,326
1,833
Denominator:
Weighted average number of Class A and Class B ordinary shares outstanding
1,831,604,053
2,593,157,207
3,076,314,670
Basic earnings per share (in RMB)
0.04
0.51
0.60
Basic earnings per ADS (in RMB)
1.19
Diluted net income per share calculation
Numerator:
Profit for the year attributable to the Company (in millions of RMB)
82
1,326
1,833
Denominator:
Weighted average number of Class A and Class B ordinary shares outstanding
1,831,604,053
2,593,157,207
3,076,314,670
Adjustments for share options and RSU
67,815,772
46,309,205
82,906,218
Number of shares used in computing diluted earnings per share attributable to the Company
1,899,419,825
2,639,466,412
3,159,220,888
Diluted earnings per share (in RMB)
0.04
0.50
0.58
Diluted earnings per ADS (in RMB)
1.16

Property Plant And Equipment (T

Property Plant And Equipment (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Property Plant And Equipment [Abstract]
Property, plant and equipmentServers and network equipment RMB million
Leasehold improve -ments RMB million
Office furniture, equipment and others RMB million
Total RMB million
At January 1, 2016
Cost
-
-
4
4
Accumulated depreciation
-
-
(1
)
(1
)
Net book amount
-
-
3
3
Year ended December 31, 2016
Opening net book amount
-
-
3
3
Additions
31
6
4
41
Business combination (Note 24)
52
36
8
96
Disposals
(1
)
-
(1
)
(2
)
Depreciation charge
(17
)
(10
)
(3
)
(30
)
Closing net book amount
65
32
11
108
At December 31, 2016
Cost
82
42
15
139
Accumulated depreciation
(17
)
(10
)
(4
)
(31
)
Net book amount
65
32
11
108
Year ended December 31, 2017
Opening net book amount
65
32
11
108
Additions
43
33
7
83
Disposals
(1
)
-
(1
)
(2
)
Depreciation charge
(35
)
(22
)
(5
)
(62
)
Closing net book amount
72
43
12
127
At December 31, 2017
Cost
123
75
22
220
Accumulated depreciation
(51
)
(32
)
(10
)
(93
)
Net book amount
72
43
12
127
10
Property, plant and equipment (Continued)
Servers and network equipment RMB million
Leasehold improve -ments RMB million
Office furniture, equipment and others RMB million
Total RMB million
Year ended December 31, 2018
Opening net book amount
72
43
12
127
Additions
95
10
11
116
Business combination (Note 24)
-
3
1
4
Disposals
(1
)
-
-
(1
)
Depreciation charge
(45
)
(25
)
(8
)
(78
)
Closing net book amount
121
31
16
168
At December 31, 2018
Cost
217
88
30
335
Accumulated depreciation
(96
)
(57
)
(14
)
(167
)
Net book amount
121
31
16
168
Summary of depreciation charged to income statementsDuring the years ended December 31, 2016, 2017 and 2018, depreciation was charged to the income statements as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Cost of revenues
15
33
47
Selling and marketing expenses
2
2
1
General and administrative expenses
13
27
30
30
62
78

Intangible Assets (Tables)

Intangible Assets (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Intangible Assets [Abstract]
Summary of Intangible AssetsError extracting Word content
Summary of Amortization of Intangible Assets AllocatedDuring the years ended December 31, 2016, 2017 and 2018, amortization was charged to the income statements as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Cost of revenues
27
60
78
Selling and marketing expenses
109
109
62
General and administrative expenses
70
148
151
206
317
291

Goodwill (Tables)

Goodwill (Tables)12 Months Ended
Dec. 31, 2018
Changes In Goodwill [Abstract]
Summary of GoodwillYear ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Balance as of January 1,
-
15,762
16,262
Goodwill acquired (Note 24)
15,762
500
826
Balance as of December 31,
15,762
16,262
17,088

Investments accounted for usi_2

Investments accounted for using equity method (Tables)12 Months Ended
Dec. 31, 2018
Investments Accounted For Using Equity Method [Abstract]
Summary of Investments Accounted for Using Equity MethodAs of December 31,
2017 RMB’million
2018 RMB’million
Investments in associates
324
190
Investments in joint ventures
54
46
378
236
Summary of Share of Profits/(Losses) of Investments Accounted for Using Equity MethodYear ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Share of profit/(loss) of investments accounted for using equity method:
Associates
12
13
12
Joint ventures
(1
)
(9
)
(13
)
11
4
(1
)
13
Investments accounted for using equity method (Continued)
Summary of Movement of Investments in Associates and Joint VenturesMovement of investments in associates and joint ventures is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
292
378
Additions
-
89
99
Business combination (Note 24)
290
1
3
Share of profit/(loss)
11
4
(1
)
Disposal
(12
)
-
(50
)
Step acquisition accounted for as business combination under common control (Note 25)
-
-
(184
)
Step acquisition (Note 24)
-
-
(14
)
Impairment provision
-
(2
)
(2
)
Currency translation differences
3
(6
)
7
At end of the year
292
378
236
Summary of Principal Associates and Joint VenturesThe principal associates and joint ventures of the Group are set out below:
Place of
business/
% of ownership interest
country of
As of December 31,
Name of entity
incorporation
2017
2018
%
%
United Entertainment Corporation
Cayman
30.00
%
NA
Liquid State Limited
Hong Kong
50.00
%
50.00
%
Beijing New Sound Entertainment Ltd.
China
70.00
%
48.00
%
Beijing Quku Technology Co., Ltd.
China
38.00
%
38.00
%
Beijing Tianhaoshengshi Entertainment Culture Co., Ltd.
China
43.90
%
-
Beijing Tianhaoshengshi Music Cultural Ltd.
China
-
45.00
%
Shenzhen United Entertainment Equity Investment Center (Limited Partnership)
China
50.00
%
NA
Summary of Financial Information of Group’s Investments Accounted for Using Equity MethodThe tables below provide summarized financial information of the Group’s investments accounted for using equity method. The information disclosed reflects the amounts presented in the financial statements of the relevant associates and joint ventures and not the Company’s share of those amounts. They have been amended to reflect adjustments made by the entity when using the equity method, including fair value adjustments and modifications for differences in accounting policies.
Year ended December 31,
2016 RMB’million
2017 RMB’million
2018 RMB’million
Revenue
260
403
362
Cost of revenue
(141
)
(280
)
(163
)
Income from operations
65
16
6
Net income
38
17
(5
)
Current assets
709
786
948
Non-current assets
160
201
91
Current liabilities
168
200
222
Non-current liabilities
5
1
-

Available For Sale Financial _2

Available For Sale Financial Assets (Tables)12 Months Ended
Dec. 31, 2018
Investments Accounted For Using Equity Method [Abstract]
Available for sale Equity Securities ExplanatoryAs of December 31,
2017
2018
RMB’million
RMB’million
Equity investments in unlisted securities
3,740
-
Schedule of Available for Sale Financial AssetsMovement of available-for-sale financial assets is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
10
3,740
Additions (note)
-
7,547
-
Business combination (Note 24)
10
-
-
Deemed distribution (note)
-
(3,774
)
-
Currency translation differences
-
(43
)
-
Reclassified to financial assets at fair value through other comprehensive income(Note 2.2(a))
-
-
(3,730
)
Reclassified to other investments(Note 2.2(a))
-
-
(10
)
At the end of the year
10
3,740
-

Financial Assets at Fair Value

Financial Assets at Fair Value (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Financial Assets [Abstract]
Summary of Financial Assets at Fair Value Through Other Comprehensive IncomeMovement of financial assets at fair value through other comprehensive income is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
Listed equity investments
At beginning of the year
-
-
-
Reclassification from available-for-sale financial assets (note)
-
-
3,730
Fair value change
-
-
(675
)
Currency translation differences
-
-
276
At end of the year
-
-
3,331
Note: The Group’s financial assets at fair value through other comprehensive income represented its equity investment in Spotify. Spotify was listed on the New York Stock Exchange in April 2018.
Summary of Movement of Other InvestmentOther investments represent financial assets at fair value through profit or loss. Movement of other investments is analyzed as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At beginning of the year
-
-
-
Reclassification from available-for-sale financial assets
-
-
10
Addition (note)
-
-
276
Fair value change
-
-
(30
)
At end of the year
-
-
256
Note: During the year ended December 31, 2018, the Group acquired a minority stake in an entertainment and media company at a consideration of RMB160 million and invested in minority interest in certain music related media projects of Tencent Group in aggregate amount of RMB116 million.

Prepayments deposits and othe_2

Prepayments deposits and other receivables (Tables)12 Months Ended
Dec. 31, 2018
Prepayments Deposits And Other Receivables [Abstract]
Schedule of Prepayments, deposits and other receivablesAs of December 31,
2017
2018
RMB’million
RMB’million
Included in non-current assets
Prepaid contents royalties
191
901
Receivables from an associate, Jiyun
13
-
204
901
Included in current assets
Prepaid contents royalties
831
1,450
Value-added tax recoverable
82
85
Prepaid vendors deposits and other receivables
30
75
Prepaid promotion and other expenses
61
130
Receivable from Tencent (Note 29(b))
59
28
Others
39
55
1,102
1,823

Accounts receivable (Tables)

Accounts receivable (Tables)12 Months Ended
Dec. 31, 2018
Trade And Other Receivables [Abstract]
Summary of Accounts Receivable and Ageing AnalysisAs of December 31,
2017
2018
RMB’million
RMB’million
Accounts receivable
1,170
1,490
Less: provision for impairment of trade receivables
(9
)
(7
)
Accounts receivable, net
1,161
1,483
Ageing analysis of the accounts receivables based on invoice date:
Up to 3 months
1,123
1,304
3 to 6 months
31
144
Over 6 months
16
42
1,170
1,490
Ageing analysis of the accounts receivables that past due but not impaired:
Up to 6 months
44
94
Over 6 months
7
20
51
114
Summary of Provision for Impairment of Accounts ReceivablesMovements in the provision for impairment of accounts receivable that were assessed for impairment collectively are as follows:
Year ended December 31,
2016
2017
2018
RMB’million
RMB’million
RMB’million
At January 1
-
6
9
Provision for impairment recognized in income statement
7
6
3
Receivables written off during the year as uncollectible
(1
)
(3
)
(5
)
At December 31
6
9
7

Cash and Cash Equivalents (Tabl

Cash and Cash Equivalents (Tables)12 Months Ended
Dec. 31, 2018
Cash And Cash Equivalents [Abstract]
Schedule of Cash and cash equivalentsAs of December 31,
2017
2018
RMB’million
RMB’million
Cash at bank
3,419
7,557
Term deposits with initial terms within three months
1,755
9,799
5,174
17,356

Share capital (Tables)

Share capital (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Classes Of Share Capital [Abstract]
Schedule of Classes of Share CapitalNumber of shares
Share capital RMB’million
Additional paid-in capital RMB’million
Balance January 1, 2016 '(US$0.000083 par value; 1,800,000,000 shares authorized)
1,290,862,550
1
-
Issuance of ordinary shares for the reverse acquisition (Note 24(a))
1,080,239,767
1
17,992
Issuance of stock ordinary shares (note (i))
172,712,345
-
2,071
Balance December 31, 2016 '(US$0.000083 par value; 4,800,000,000 shares authorized)
2,543,814,662
2
20,063
Issuance of ordinary shares (note (i))
15,939,000
-
-
Issuance of stock dividend (Note 14)
88,726,036
-
-
Exercise of share options (note (i))
39,262,654
-
79
Issuance of ordinary shares in exchange for ordinary shares in an investee (Note 14)
282,830,698
-
7,547
Distribution to Tencent (Note 14)
-
-
(3,774
)
Balance December 31, 2017 '(US$0.000083 par value; 4,800,000,000 shares authorized)
2,970,573,050
2
23,915
Issuance of ordinary shares (note ii)
97,381,238
-
2,433
Issuance of ordinary shares for acquiring the remaining interest in UEC (Note 25)
23,084,008
-
1,027
Issuance of puttable ordinary (note iii)
24,757,517
-
-
Issuance of ordinary shares to Music Label Partners (note iv)
68,131,015
-
2,905
Issuance of ordinary shares upon initial public offering (note v)
82,059,658
-
3,496
Balance December 31, 2018 (US$0.000083 par value; 4,800,000,000 shares authorized)
3,265,986,486
2
33,776
As of December 31, 2018, analysis of the Company’s issued shares is as follows:
Number of shares
Share capital RMB’million
Class A ordinary shares
609,770,009
-
Class B ordinary shares
2,656,216,477
2
3,265,986,486
2

Other Reserves (Tables)

Other Reserves (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Reserves Within Equity [Abstract]
Schedule of Other ReserveShare-based compensa -tion reserve RMB’million
Contribution from/ (distribution to) ultimate holding company RMB’million
PRC statutory reserve RMB’million
Foreign currency translation reserve RMB’million
Fair value reserve RMB’million
Others RMB’million
Total other reserves RMB’million
At January 1, 2016
-
577
-
-
-
-
577
Currency translation differences
-
-
-
42
-
-
42
Shared-based compensation
142
28
-
-
-
-
170
Deemed distribution
-
(189
)
-
-
-
-
(189
)
Profit appropriations to PRC statutory reserves
-
-
17
-
-
-
17
At December 31, 2016
142
416
42
-
-
617
Currency translation differences
-
-
-
(143
)
-
-
(143
)
Deemed contribution
99
20
-
-
-
-
119
Share based compensation
335
27
-
-
-
-
362
Profit appropriations to PRC statutory reserves
-
-
42
-
-
-
42
At December 31, 2017
576
463
59
(101
)
-
-
997
Currency translation differences
-
-
-
552
-
-
552
Fair value changes on financial assets at fair value through other comprehensive income
-
-
-
-
(675
)
-
(675
)
Acquisition of remaining interests in associates
-
-
-
-
-
(831
)
(831
)
Share based compensation
840
840
Profit appropriations to PRC statutory reserves
-
-
20
-
-
-
20
At December 31, 2018
1,416
463
79
451
(675
)
(831
)
903

Share Based Compensation (Table

Share Based Compensation (Tables)12 Months Ended
Dec. 31, 2018
2014 Share Incentive Plan
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Line Items]
Schedule of Number, Weighted Average Exercise Prices and Weighted Average Grant Date Fair Value of Share OptionsThe option holders may elect at any time to exercise any part or all of the vested options before the expiry date.
Number of options
Weighted- average exercise price
Weighted- average grant date fair value
(US$)
(US$)
Outstanding as of January 1, 2016
-
-
-
Arising from business combination
98,821,647
0.25
2.04
Forfeited
(2,116,800
)
0.29
1.98
Outstanding as of December 31, 2016
96,704,847
0.25
2.05
Vested and expected to vest as of December 31, 2016
87,734,832
0.24
2.04
Exercisable as of December 31, 2016
59,808,852
0.25
2.03
Non vested as of December 31, 2016
36,895,995
0.24
2.08
Outstanding as of January 1, 2017
96,704,847
0.25
2.05
Exercised
(39,262,654
)
0.30
1.98
Forfeited
(3,943,920
)
0.24
2.08
Outstanding As of December 31, 2017
53,498,273
0.21
2.09
Vested and expected to vest As of December 31, 2017
49,573,551
0.21
2.09
Exercisable As of December 31, 2017
33,196,944
0.18
2.11
Non vested As of December 31, 2017
20,301,329
0.26
2.06
Weighted-
Weighted-
average grant
Number of
average
date fair
options
exercise price
value
(US$)
(US$)
Outstanding as of January 1, 2018
53,498,273
0.21
2.09
Anti-dilution adjustments
4,731,938
-
-
Forfeited
(1,494,002
)
0.24
2.05
Outstanding as of December 31, 2018
56,736,209
0.19
1.94
Vested and expected to vest as of December 31, 2018
55,921,341
0.19
1.94
Exercisable as of December 31, 2018
50,155,161
0.18
1.94
Non vested as of December 31, 2018
6,581,048
0.25
1.91
Summary of Assumptions Used to Determine Fair value of Share OptionsThe fair values of employee stock options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model are presented below:
2016
2017
Risk free interest rate
1.5
%
1.5
%
Expected dividend yield
0
%
0
%
Expected volatility range
64%-65%
64%-65%
Exercise multiples
2.2-2.8
2.2-2.8
Contractual life
10 years
10 years
Schedule of Share Options OutstandingShare options outstanding at the end of the year have the following expiry date and exercise prices:
Grant Date
Expiry date
Exercise price
Share options December 31, 2017
Share options December 31, 2018
March 1, 2015
February 28, 2025
US$0.000076
2,348,099
2,348,099
March 1, 2015
February 28, 2025
US$0.27
2,630,000
2,714,940
March 1, 2015
February 28, 2025
US$0.000076
11,924,136
12,945,345
March 1, 2015
February 28, 2025
US$0.27
9,939,200
10,776,631
March 30, 2015
March 29, 2025
US$0.27
3,444,042
3,748,650
July 1, 2015
June 30, 2025
US$0.27
200,000
75,100
October 1, 2015
September 30, 2025
US$0.27
780,600
791,880
December 31, 2015
December 30, 2025
US$0.27
2,933,281
3,036,686
December 31, 2015
December 30, 2025
US$0.000076
212,000
230,750
March 1, 2016
February 28, 2026
US$0.27
761,000
746,643
March 31, 2016
March 30, 2026
US$0.27
340,500
370,040
June 1, 2016
May 30, 2026
US$0.27
6,521,513
7,098,340
June 30, 2016
June 29, 2026
US$0.000076
600,000
653,070
June 30, 2016
June 29, 2026
US$0.27
10,863,902
11,200,035
Total
53,498,273
56,736,209
Weighted average remaining contractual life of options outstanding at end of period:
7.22
6.23
2017 Restricted Share Scheme and 2017 Option Plan
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Line Items]
Schedule of Number, Weighted Average Exercise Prices and Weighted Average Grant Date Fair Value of Share OptionsThe vested options shall become exercisable in the event of the Company’s completion of an IPO.
Number of options
Weighted- average exercise price
Weighted- average grant date fair value
(US$)
(US$)
Outstanding as of January 1, 2016
-
-
-
Granted
12,034,480
2.53
1.03
Outstanding as of December 31, 2016
12,034,480
2.53
1.03
Vested and expected to vest as of December 31, 2016
7,944,083
2.53
1.03
Exercisable as of December 31, 2016
-
-
-
Non vested as of December 31, 2016
12,034,480
2.53
1.03
Outstanding as of January 1, 2017
12,034,480
2.53
1.03
Granted
15,315,256
1.35
3.10
Forfeited
(388,350
)
0.29
3.39
Outstanding as of December 31, 2017
26,961,386
1.89
2.17
Vested and expected to vest as of December 31, 2017
18,362,420
1.87
2.18
Exercisable as of December 31, 2017
-
-
-
Non vested as of December 31, 2017
26,961,386
1.89
2.17
Outstanding as of January 1, 2018
26,961,386
1.89
2.17
Anti-dilution adjustments
2,384,714
-
-
Granted
7,777,224
6.76
3.27
Forfeited
(1,037,021
)
1.35
1.85
Outstanding as of December 31, 2018
36,086,303
2.75
2.24
Vested and expected to vest as of December 31, 2018
28,604,121
2.58
2.38
Exercisable as of December 31, 2018
7,252,971
1.76
1.75
Non vested as of December 31, 2018
28,833,332
3.00
2.47
Summary of Assumptions Used to Determine Fair value of Share OptionsThe fair value of share options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model are presented below:
Year ended December 31,
2016
2017
2018
Risk free interest rate
1.6
%
2.1-2.5%
2.97%-3.21%
Expected dividend yield
0
%
0
%
0
%
Expected volatility
55
%
55%-60%
50%-60%
Exercise multiples
2.8
2.2-2.8
2.8
Contractual life
10 years
10 years
10 years
Schedule of Share Options OutstandingShare options outstanding at the end of the year have the following expiry date and exercise prices:
Share options As of December 31,
Grant Date
Expiry date
Exercise price
2017
2018
June 16, 2017
June 15, 2027
US$2.32
12,034,480
13,098,930
August 31, 2017
August 30,2027
US$0.27
7,666,803
7,768,593
December 20, 2017
December 19, 2027
US$2.32
7,260,103
7,902,280
April 16, 2018
April 15, 2028
US$4.04
-
1,300,000
October 17, 2018
October 16, 2028
US$7.14
-
6,016,500
Total
26,961,386
36,086,303
Weighted average remaining contractual life of options outstanding at end of year:
9.21
8.62
Schedule of Movements in Number of RSUs and Awarded SharesMovements in the number of RSUs for the years ended December 31, 2017 and 2018 are as follows:
Number of awarded shares
Year ended December 31,
2016
2017
2018
Outstanding as of January 1
-
7,172,472
8,141,664
Anti-dilution adjustments
-
-
719,968
Granted
7,172,472
1,234,514
5,335,010
Forfeited
-
(265,322
)
(472,542
)
Outstanding as of December 31
7,172,472
8,141,664
13,724,100
Expected to vest as of December 31
4,583,524
5,797,563
10,318,030
Share-based Compensation Plans | Tencent Holdings Limited
Disclosure Of Terms And Conditions Of Sharebased Payment Arrangement [Line Items]
Schedule of Number, Weighted Average Exercise Prices and Weighted Average Grant Date Fair Value of Share OptionsMovements in the number of share options of Tencent relevant to the Group outstanding is as follows:
Weighted-
Average
average grant
Number of
exercise price
date fair value
shares
(HK$)
(HK$)
Outstanding as of January 1, 2016
67,500
55.18
50.90
Granted
53,160
174.86
55.42
Exercised
(35,000
)
54.14
51.09
Outstanding as of December 31, 2016
85,660
129.88
53.63
Vested and expected to vest as of December 31, 2016
67,803
119.12
53.52
Exercisable as of December 31, 2016
22,500
26.08
56.00
Non vested as of December 31, 2016
63,160
166.85
52.79
Outstanding as of January 1, 2017
85,660
129.88
53.63
Granted
32,410
272.36
81.70
Exercised
(32,735
)
64.88
53.28
Outstanding as of December 31, 2017
85,335
208.93
64.43
Vested and expected to vest as of December 31, 2017
57,795
208.52
64.25
Exercisable as of December 31, 2017
8,055
174.86
55.42
Non vested as of December 31, 2017
77,280
212.48
65.37
Outstanding as of January 1, 2018
85,335
208.93
64.43
Exercised
(10,235
)
150.16
47.30
Outstanding as of December 31, 2018
75,100
216.94
66.76
Vested and expected to vest as of December 31, 2018
63,462
214.53
66.11
Exercisable as of December 31, 2018
24,212
207.49
64.21
Non vested as of December 31, 2018
50,888
221.43
67.97
Summary of Assumptions Used to Determine Fair value of Share OptionsThe fair values of employee stock options were valued using the Binomial option-pricing model. Assumptions used in the Binomial option-pricing model for the years ended December 31, 2016 and 2017 are presented below:
Year ended December 31,
2016
2017
Risk free interest rate
0.69
%
1.39
%
Expected dividend yield
0.32
%
0.33
%
Expected volatility range
35
%
30
%
Exercise multiples
2.5
7
Contractual life
7 years
7 years
Schedule of Share Options OutstandingShare options outstanding at the end of the year have the following expiry date and exercise prices:
Share options
As of December 31,
Grant Date
Expiry date
Exercise price
2017
2018
July 10, 2014
July 9, 2021
HK$124.30
5,000
-
July 6, 2016
July 5, 2023
HK$174.86
47,925
42,690
July 10, 2017
July 9, 2024
HK$272.36
32,410
32,410
Total
85,335
75,100
Schedule of Movements in Number of RSUs and Awarded SharesMovements in the number of awarded shares for the years ended December 31, 2017 and 2018 are as follows:
Number of awarded shares Year ended December 31,
2016
2017
2018
Outstanding as of January 1
797,355
731,814
430,418
Granted
222,800
24,503
-
Forfeited
(1,707
)
(9,013
)
(4,718
)
Vested and transferred
(286,634
)
(316,886
)
(237,752
)
Outstanding as of December 31
731,814
430,418
187,948
Expected to vest as of December 31
658,633
361,943
166,321

Other Payables and Accruals (Ta

Other Payables and Accruals (Tables)12 Months Ended
Dec. 31, 2018
Other Payables And Accruals [Abstract]
Schedule of Other Payables and AccrualsAs of December 31,
2017 RMB’million
2018 RMB’million
Included in non-current liabilities
Investment payables
-
169
Contingent consideration (Note 24)
-
32
Government grants
21
13
Deferred revenue (Note 23)
-
27
21
241
Included in current liabilities
Dividend payable
31
12
Accrued expenses (note)
752
1,467
Advances from customers
69
106
Investment payables
303
389
Contingent consideration (Note 24)
-
31
Other tax liabilities
37
103
Present value of liability of puttable shares
-
494
Other deposits
40
71
Others
80
69
1,312
2,742
Note: Accrued expenses mainly comprise of payroll and welfare, advertising and marketing, operating lease rental and other operating expenses.

Deferred revenue (Tables)

Deferred revenue (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Deferred Revenue [Abstract]
Schedule of Contract LiabilitiesAs of December 31,
2017 RMB’million
2018 RMB’million
Non-current
-
27
Current
978
1,431
978
1,458

Business Combination (Tables)

Business Combination (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Business Combinations [Line Items]
Summary of Group’s Pro forma Financial PerformanceThe Group’s pro forma financial performance for the year ended December 31, 2016 as if the Merger had occurred on January 1, 2016 is presented below:
RMB’million
(Unaudited)
Revenue
6,143
Online music services
2,417
Social entertainment services and others
3,726
Gross profit
1,728
Operating profit
58
Profit before income tax
73
Profit after tax
41
CMC Music Business
Disclosure Of Business Combinations [Line Items]
Summary of Consideration Transferred and Amount of Identified Assets Acquired and Liabilities AssumedThe following table summarizes the consideration transferred and the amount of identified assets acquired and liabilities assumed at the acquisition date, as well as the fair value of the non-controlling interest in CMC at the acquisition date.
RMB’million
Purchase consideration
17,999
Fair value of non-controlling interest
6
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
676
Short-term investments
632
Accounts and other receivables
207
Intangible assets
2,213
Available-for-sale financial assets
10
Property, equipment and software
96
Prepayments, deposits and other assets
744
Dividend payable
(1,251
)
Other payables, accruals and other current liabilities
(640
)
Deferred revenue
(26
)
Deferred tax liabilities
(383
)
Other liabilities
(35
)
Goodwill
15,762
Ultimate Music Inc
Disclosure Of Business Combinations [Line Items]
Summary of Consideration Transferred and Amount of Identified Assets Acquired and Liabilities AssumedThe following table summarizes the consideration transferred and the amount of identified assets acquired and liabilities assumed at the acquisition date.
RMB’million
Purchase consideration
463
Fair value of existing interest in Ultimate
72
535
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
33
Accounts and other receivables
9
Intangible assets
24
Prepayments, deposits and other assets
21
Deferred revenue
(1
)
Other payables and accruals
(41
)
Deferred tax liabilities
(10
)
Goodwill
500
Music Content Company
Disclosure Of Business Combinations [Line Items]
Summary of Consideration Transferred and Amount of Identified Assets Acquired and Liabilities AssumedThe following table summarizes the amount of identified assets acquired and liabilities assumed at the acquisition date.
RMB’million
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
68
Accounts and other receivables
101
Intangible assets
297
Prepayments, deposits and other assets
162
Deferred revenue
(18
)
Other payables and accruals
(57
)
Deferred tax liabilities
(105
)
Goodwill
798
1,246

Cash flow information (Tables)

Cash flow information (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Cash Flow Information [Abstract]
Summary of Cash Generated from Operations(a)
Cash generated from operations
2016
2017
2018
RMB’million
RMB’million
RMB’million
Profit before income tax
114
1,597
2,003
Adjustments for:
Depreciation and amortization
236
379
369
Impairment provision for investments in associates (Note 6)
-
2
2
Provision for doubtful accounts (Note 17)
7
6
3
Non-cash employee benefits expense – share based payments (Note 7)
170
362
487
Non-cash share-based payments arising from issues of ordinary shares to music label partners(Note 19(iv))
-
-
1,519
Fair value losses on other investments
-
-
30
Net (gains)/losses in relation to equity investments
(4
)
(72
)
20
Share of (profit)/loss of associates and joint ventures (Note 13)
(11
)
(4
)
1
Interest income
(32
)
(93
)
(282
)
Fair value change on puttable shares
-
-
35
Net exchange differences (Note 6)
23
(18
)
31
Increase in accounts receivable
(266
)
(447
)
(182
)
Increase in inventories
(11
)
(16
)
(4
)
Increase/(decrease) in other operating assets
193
(137
)
(789
)
Increase in accounts payables
315
4
780
Increase in other operating liabilities
174
1,051
1,581
Cash generated from operations
908
2,614
5,604
Summary of Non-cash Investing and Financing Activities(b)
Non-cash investing and financing activities
2016 RMB’million
2017 RMB’million
2018 RMB’million
Issuance of ordinary shares to music label partners
-
-
1,519
Issuance of ordinary shares for business combinations
17,999
-
-
Issuance of ordinary shares for equity investments
-
7,547
1,027
Distribution to Tencent
-
(3,774
)
-
Other payable for business combinations
-
277
-
Issuing restricted shares for business combinations
-
149
-
Settlement of dividend by issuance of shares
138
58
-
Other receivables from disposal of long term investments
16
-
-
Other payable for acquisition of investments in Joint ventures
-
46
-
Insurance of ordinary shares for licensing of contents
30
-
-

Financial instruments by cate_2

Financial instruments by category (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Financial Instruments [Abstract]
Summary of Financial Instruments by CategoryThe Group holds the following financial instruments:
Financial assets
Loans and receivables RMB’million
Other investments RMB’million
Financial assets at fair value through other comprehensive income RMB’million
Available- for-sale financial assets RMB’million
Total RMB’million
As at December 31, 2017
Accounts receivable (Note 17)
1,161
-
-
-
1,161
Other receivables (Note 16)
133
-
-
-
133
Available-for-sale financial assets (Note 14)
-
-
-
3,740
3,740
Cash and cash equivalents (Note 18)
5,174
-
-
-
5,174
6,468
-
-
3,740
10,208
As at December 31, 2018
Accounts receivable (Note 17)
1,483
-
-
-
1,483
Other receivables (Note 16)
80
-
-
-
80
Cash and cash equivalents (Note 18)
17,356
-
-
-
17,356
Other investments
-
256
-
-
256
Financial assets at fair value through other comprehensive income
-
-
3,331
-
3,331
18,919
256
3,331
-
22,506
27
Financial instruments by category (Continued)
Financial liabilities
Liabilities at amortized cost RMB’million
As at December 31, 2017
Accounts payable
1,045
Other payables and accruals (note)
787
1,832
As at December 31, 2018
Accounts payable
1,830
Other payables and accruals (note)
1,902
3,732

Commitments (Tables)

Commitments (Tables)12 Months Ended
Dec. 31, 2018
Capital Commitments [Abstract]
Summary of Future Minimum Commitments for Non Cancellable Operating LeasesThe following table summarizes future minimum commitments of the Group under non-cancelable operating arrangements, which are mainly related to leased facilities and rental of bandwidth:
2017 RMB’million
2018 RMB’million
Within one year
61
212
Later than one year but not later than five years
44
93
105
305
Summary of Minimum Royalty Payments Under Licensing AgreementThe Group is subject to the following minimum royalty payments associated with its license agreements:
2017
2018
RMB’million
RMB’million
Within one year
1,821
3,599
Later than one year but not later than five years
3,102
2,284
More than 5 years
-
2
4,923
5,885

Related Party Transactions (Tab

Related Party Transactions (Tables)12 Months Ended
Dec. 31, 2018
Disclosure Of Transactions Between Related Parties [Abstract]
Summary of the Major Related Parties and their RelationshipsThe table below sets forth the major related parties and their relationships with the Group as of December 31, 2018:
Name of related parties
Relationship with the Group
Tencent and its subsidiaries other than the entities controlled by the Group (“Tencent Group”)
The Company’s principal owner
Beijing Quku Techsnology Co., Ltd.
The Company’s associate
Beijing Tianhao Shengshi Music Cultural Ltd.
The Company’s associate
Nanjing Jiyun Cultural Development Ltd.
The Company’s associate, before May 31, 2018
UEC and its subsidiaries
The Company’s associate, before August 31, 2018
Disclosure of Transactions Between Related PartiesFor the years ended December 31, 2017 and 2018, significant related party transactions were as follows:
2016 RMB’million
2017 RMB’million
2018 RMB’million
Revenue
Online music services to Tencent Group
90
33
51
Online music services to associates of Tencent Group
-
-
18
Social entertainment services and others to the Company’s associates and associates of Tencent Group
15
20
63
Expenses
Operation expenses recharged by Tencent Group
428
493
589
Advertising agency cost to Tencent Group
151
187
207
Content royalties to the Company’s associates and associates of Tencent Group
18
45
88
Other channel cost to associates of Tencent Group
-
-
14
Summary of Balance with Related Parties(c)
Balances with related parties
2017
2018
RMB’million
RMB’million
Included in accounts receivable from related parties:
Tencent Group (note)
651
971
The Company's associates and associates of Tencent Group
8
39
Included in prepayments, deposits and other assets from related parties:
Tencent Group
59
28
The Company's associates and associates of Tencent Group
26
16
Included in accounts payable to related parties:
Tencent Group
104
529
The Company's associates
5
1
Included in other payables and accruals to related parties:
Tencent Group
59
135
Disclosure of Information About Key Management Personnel(d)
Key management personnel compensation
2016
2017
2018
RMB’million
RMB’million
RMB’million
Short-term employee benefits
24
46
64
Share-based compensation
54
107
223
78
153
287

General Information, Organiza_3

General Information, Organization and Basis of Preparation - Additional Information (Details) ¥ in Millions12 Months Ended
Dec. 31, 2018CNY (¥)OnlinePlatformDec. 31, 2017CNY (¥)Dec. 31, 2016CNY (¥)Jul. 12, 2016sharesDec. 31, 2015CNY (¥)
General Information Organization And Basis Of Preparation [Line Items]
Capital, capital reserve and statutory reserves ¥ 37,772 ¥ 26,148 ¥ 20,634 ¥ 456
Loan Agreement
General Information Organization And Basis Of Preparation [Line Items]
Agreement term20 years
Yeelion Online Network Technology Beijing Co Ltd | Exclusive Technical Service Agreement
General Information Organization And Basis Of Preparation [Line Items]
Agreement term20 years
Guangzhou Kugou Computer Technology Co Ltd | Exclusive Technical Service Agreement
General Information Organization And Basis Of Preparation [Line Items]
Agreement term20 years
Guangzhou Kugou Computer Technology Co Ltd | Loan Agreement
General Information Organization And Basis Of Preparation [Line Items]
Agreement term20 years
VIEs
General Information Organization And Basis Of Preparation [Line Items]
Capital, capital reserve and statutory reserves ¥ 4,432 ¥ 3,249
Ordinary Shares | Min River Investment Limited
General Information Organization And Basis Of Preparation [Line Items]
Shares subscribed under purchase agreement | shares1,290,862,550
Percentage of shares subscribed under purchase agreement54.40%
Number of shares outstanding in business combination61.60%
Kugou And Kuwo
General Information Organization And Basis Of Preparation [Line Items]
Number Of Online Platforms Controlled Prior To Merger | OnlinePlatform2
Percentage Of Then Outstanding Ordinary Shares15.80%

General Information, Organiza_4

General Information, Organization and Basis of Preparation - Summary of Significant Subsidiaries, VIEs, and Subsidiaries of VIEs (Details)12 Months Ended
Dec. 31, 2018
Tencent Music Entertainment Hong Kong Limited
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryTencent Music Entertainment Hong
Kong Limited (“TME Hong
Kong”) (formerly known as
“Ocean Music Hong Kong
Limited”)
Place of incorporationHong Kong
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesInvestment holding
and music content
distribution
Tencent Music Entertainment Beijing Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryTencent Music Entertainment
(Beijing) Co., Ltd. (“TME
Beijing”) (formerly known as
“Ocean Interactive (Beijing)
Information Technology Co.,
Ltd.”)
Place of incorporationPRC
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesTechnical support and
consulting services
Yeelion Online Network Technology Beijing Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryYeelion Online Network
Technology (Beijing) Co., Ltd.
(‘‘Yeelion Online”)
Place of incorporationPRC
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesTechnical support and
consulting services
Tencent Music Entertainment Technology Shenzhen Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryTencent Music Entertainment
Technology (Shenzhen) Co., Ltd.
(''TME Tech Shenzhen")
Place of incorporationPRC
Date of Incorporation or acquisitionFebruary 2017
Equity Interest Held (direct or indirect)100.00%
Principal activitiesOnline music and
entertainment related
services
Tencent Music Entertainment Shenzhen Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryTencent Music Entertainment
(Shenzhen) Co., Ltd. (“TME
Shenzhen”)
Place of incorporationPRC
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesOnline music and
entertainment related
services
Guangzhou Kugou Computer Technology Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryGuangzhou Kugou Computer
Technology Co., Ltd.
(“Guangzhou Kugou”)
Place of incorporationPRC
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesOnline music and
entertainment related
services
Beijing Kuwo Technology Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryBeijing Kuwo Technology Co.,
Ltd.(“Beijing Kuwo”)
Place of incorporationPRC
Date of Incorporation or acquisitionJuly 2016
Equity Interest Held (direct or indirect)100.00%
Principal activitiesOnline music and
entertainment related
services
Xizang Qiming Music Co Ltd
Disclosure Of Significant Investments In Subsidiaries [Line Items]
Name of subsidiaryXizang Qiming Music Co.,
Ltd.(“Xizang Qiming”)
Place of incorporationPRC
Date of Incorporation or acquisitionFebruary 2018
Equity Interest Held (direct or indirect)100.00%
Principal activitiesMusic content
investments

General Information, Organiza_5

General Information, Organization and Basis of Preparation - Summary of Condensed Separate Financial Statements (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Statements Line Item
Total current assets ¥ 20,778 ¥ 7,467
Total non-current assets23,827 22,533
Total assets44,605 30,000
Total current liabilities(6,238)(3,527)
Total non-current liabilities(595)(325)
Total liabilities(6,833)(3,852)
Total revenues18,985 10,981 ¥ 4,361
Profit for the year1,832 1,319 85
Net cash inflow/(outflow) from operating activities5,632 2,500 873
Net cash inflow/(outflow) from investing activities(1,190)(483)496
Net cash flow from financing activities7,741 99 1,712
Cash and cash equivalents at beginning of the year5,174 3,071
Cash and cash equivalents at end of year17,356 5,174 3,071
V I Es And Subsidiaries Of V I Es
Statements Line Item
Total current assets7,199 6,205
Total non-current assets5,902 3,872
Total assets13,101 10,077
Total current liabilities(5,664)(4,661)
Total non-current liabilities(562)(304)
Total liabilities(6,226)(4,965)
Total revenues18,966 10,948 3,007
Profit for the year1,333 340 61
Net cash inflow/(outflow) from operating activities(334)1,763 842
Net cash inflow/(outflow) from investing activities(1,244)131 570
Net increase/(decrease) in cash and cash equivalents(1,578)1,894 1,412
Cash and cash equivalents at beginning of the year3,306 1,412
Cash and cash equivalents at end of year ¥ 1,728 ¥ 3,306 ¥ 1,412

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Additional Information (Details)12 Months Ended
Dec. 31, 2018CNY (¥)SegmentMar. 31, 2018sharesJul. 12, 2016CNY (¥)shares
Disclosure Of Significant Accounting Policies [Line Items]
Number of shares issued in the merger | shares24,757,517
Right of use ¥ 100,000,000
Lease liability ¥ 97,000,000
Useful lives of other intangible assetsmore than 12 years
Employee benefits obligation ¥ 0
Performance obligation expected durationThe Group does not disclose the information about the remaining performance obligations as the performance obligations of the Group have an expected duration of one year or less.
Operating segments
Disclosure Of Significant Accounting Policies [Line Items]
Number Of Segments | Segment1
Bottom of range
Disclosure Of Significant Accounting Policies [Line Items]
Percentage of voting rights20.00%
Top of range
Disclosure Of Significant Accounting Policies [Line Items]
Percentage of voting rights50.00%
Reverse Acquisition Of CMC [Member]
Disclosure Of Significant Accounting Policies [Line Items]
Number of shares issued in the merger | shares1,290,862,550
Tencent PRC Music Business [Member]
Disclosure Of Significant Accounting Policies [Line Items]
Consideration amount deemed ¥ 17,999,000,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Summary of Effect of the Reclassifications (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Jan. 01, 2018Dec. 31, 2017
Disclosure Of Voluntary Change In Accounting Policy [Line Items]
Available-for-sale financial assets ¥ 3,740
Financial assets at fair value through other comprehensive income ¥ 3,331
IFRS9
Disclosure Of Voluntary Change In Accounting Policy [Line Items]
Available-for-sale financial assets3,740
Financial assets at fair value through other comprehensive income ¥ 3,730
Other investments ¥ 256 ¥ 10
Increase (decrease) due to changes in accounting policy required by IFRSs | IFRS9
Disclosure Of Voluntary Change In Accounting Policy [Line Items]
Available-for-sale financial assets(3,740)
Financial assets at fair value through other comprehensive income3,730
Other investments ¥ 10

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Property, Plant and Equipment (Detail)12 Months Ended
Dec. 31, 2018
Communication and network equipment [member] | Bottom of range
Disclosure Of Significant Accounting Policies [Line Items]
Servers and network equipment3 years
Communication and network equipment [member] | Top of range
Disclosure Of Significant Accounting Policies [Line Items]
Servers and network equipment5 years
Office equipment [member] | Bottom of range
Disclosure Of Significant Accounting Policies [Line Items]
Servers and network equipment3 years
Office equipment [member] | Top of range
Disclosure Of Significant Accounting Policies [Line Items]
Servers and network equipment5 years
Leasehold improvements [member]
Disclosure Of Significant Accounting Policies [Line Items]
Leasehold improvementsShorter of expected lives of leaseholdimprovements and lease term

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Acquired Intangible Assets (Detail)12 Months Ended
Dec. 31, 2018
Online Users
Disclosure Of Significant Accounting Policies [Line Items]
Online users1 year
Bottom of range | Customer-related intangible assets
Disclosure Of Significant Accounting Policies [Line Items]
Online users3 years
Bottom of range | Supplier Resources
Disclosure Of Significant Accounting Policies [Line Items]
Online users3 years
Bottom of range | Non Compete Agreement
Disclosure Of Significant Accounting Policies [Line Items]
Online users4 years
Bottom of range | Copyrights
Disclosure Of Significant Accounting Policies [Line Items]
Online users2 years
Top of range | Customer-related intangible assets
Disclosure Of Significant Accounting Policies [Line Items]
Online users4 years
Top of range | Supplier Resources
Disclosure Of Significant Accounting Policies [Line Items]
Online users6 years
Top of range | Non Compete Agreement
Disclosure Of Significant Accounting Policies [Line Items]
Online users5 years
Top of range | Copyrights
Disclosure Of Significant Accounting Policies [Line Items]
Online users5 years

Financial Risk Management - Add

Financial Risk Management - Additional Information (Details) ¥ in Millions12 Months Ended
Dec. 31, 2018CNY (¥)CustomerDec. 31, 2017CNY (¥)
Financial Risk Management [Line Items]
Number of customers accounted for 30% of gross accounts receivable | Customer5
Gross accounts receivable comprise of top customers21.00%
Recurring Fair Value Measurement [Member]
Financial Risk Management [Line Items]
Transfer between Level 1 and 2, assets ¥ 0 ¥ 0
Transfer between Level 2 and 1, assets ¥ 0 0
Foreign Exchange Risk [Member]
Financial Risk Management [Line Items]
Effect of changes in currency rate5.00%
Post-tax profit ¥ 7 14
Equity Price Risk [Member]
Financial Risk Management [Line Items]
Effect of changes in currency rate5.00%
Impact in other comprehensive income ¥ 167 187
Customer One
Financial Risk Management [Line Items]
Gross accounts receivable comprise of top customers12.00%
Customer One [Member]
Financial Risk Management [Line Items]
Gross accounts receivable comprise of top customers3.00%
Customer Two [Member]
Financial Risk Management [Line Items]
Gross accounts receivable comprise of top customers2.00%
Customer Three [Member]
Financial Risk Management [Line Items]
Gross accounts receivable comprise of top customers2.00%
Customer Four [Member]
Financial Risk Management [Line Items]
Gross accounts receivable comprise of top customers2.00%
Liquidity Risk [Member]
Financial Risk Management [Line Items]
External borrowings ¥ 0 ¥ 0

Revenue - Additional Informatio

Revenue - Additional Information (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Disaggregation Of Revenue From Contracts With Customers [Abstract]
Revenue from subscription packages contributed ¥ 2,499 ¥ 1,841 ¥ 1,279

Other (losses)_gains, net - Sum

Other (losses)/gains, net - Summary of Other (losses)/gains, net (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Other Gains Losses [Abstract]
Government grants ¥ 52 ¥ 30 ¥ 9
Impairment provision for investments in associates(2)(2)
Net foreign exchange (losses)/gains(31)18 (23)
Gain on step-up acquisition arising from business combination (Note 24(b))72
Fair value change of financial assets(30)
Others(18)6 1
Other gains (losses) ¥ (29) ¥ 124 ¥ (13)

Expense by nature - Summary of

Expense by nature - Summary of Expense By Nature (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Expense By Nature [Abstract]
Service costs (note i) ¥ 10,323 ¥ 6,142 ¥ 2,481
Advertising agency fees204 188 151
Employee benefits expenses (note ii and note iii)2,077 1,373 721
Promotion and advertising expenses1,511 660 193
Operating lease rentals in respect of office buildings ¥ 56 ¥ 48 ¥ 23

Expense by nature - Summary o_2

Expense by nature - Summary of Expense By Nature (Parenthetical) (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Expense By Nature Lineitems
Research and development expense ¥ 937 ¥ 797 ¥ 449
Short-term employee benefits expense ¥ 825 ¥ 724 ¥ 402

Expense by Nature - Summary o_3

Expense by Nature - Summary of Employee Benefits Expenses (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Expense By Nature [Abstract]
Wages, salaries and bonuses ¥ 1,228 ¥ 723 ¥ 335
Welfare, medical and other expenses293 204 184
Share-based compensation expenses487 384 170
Contribution to pension plans69 62 32
Employee benefits expense ¥ 2,077 ¥ 1,373 ¥ 721

Taxation - Additional Informati

Taxation - Additional Information (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Income Taxes [Line Items]
Applicable tax rate25.00%
Preferential Income Tax Rate15.00%
Unrecognized deferred tax assets ¥ 116 ¥ 125
Cumulative tax losses ¥ 511 ¥ 496
Bottom of range
Income Taxes [Line Items]
Cumulative tax losses expiration period2019
Top of range
Income Taxes [Line Items]
Cumulative tax losses expiration period2023
Guangzhou Kugou
Income Taxes [Line Items]
Preferential Income Tax Rate15.00%15.00%15.00%
Beijing Kuwo
Income Taxes [Line Items]
Preferential Income Tax Rate15.00%15.00%
Guangzhou Fanxing Entertainment Information Technology
Income Taxes [Line Items]
Preferential Income Tax Rate15.00%15.00%
Tencent Music Entertainment Technology Shenzhen Co Ltd
Income Taxes [Line Items]
Applicable tax rate15.00%
Preferential Income Tax Rate15.00%
Hong Kong
Income Taxes [Line Items]
Applicable tax rate16.50%

Taxation - Summary of Income Ta

Taxation - Summary of Income Tax Expenses (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Major Components Of Tax Expense Income [Abstract]
Current income tax ¥ 255 ¥ 353 ¥ 105
Deferred income tax (note b)(84)(75)(76)
Total income tax expense ¥ 171 ¥ 278 ¥ 29

Taxation - Summary of Reconcili

Taxation - Summary of Reconciliation of Income Tax (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Taxation [Abstract]
Profit before income tax expense ¥ 2,003 ¥ 1,597 ¥ 114
Tax calculated at a tax rate of 25%501 399 28
Effects of different tax rates applicable to different subsidiaries of the Group396 (56)28
Effects of tax holiday on assessable profit of certain subsidiaries(530)(39)
Effects of tax holiday of a subsidiary recognized for prior year(116)
Effects of preferential tax rate on assessable profit of certain subsidiaries(230)(161)(20)
Expense not deductible for tax purposes156 107 63
Income not subject to tax(2)(10)(44)
Unrecognized deferred income tax assets37 81 36
Utilization of previously unrecognized tax assets(40)(45)(48)
Others(1)2 (14)
Total income tax expense ¥ 171 ¥ 278 ¥ 29

Taxation - Summary of Reconci_2

Taxation - Summary of Reconciliation of Income Tax (Parenthetical) (Details)12 Months Ended
Dec. 31, 2018
Taxation [Abstract]
Applicable tax rate25.00%

Taxation - Summary of Amount an

Taxation - Summary of Amount and Per Share Effect of Tax Holiday (Details) - CNY (¥) ¥ / shares in Units, ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017
Tax Effect Of Tax Holiday Period [Abstract]
Effects of tax holiday on assessable profit of certain subsidiaries ¥ 646 ¥ 39
Per share effect—basic ¥ 0.21 ¥ 0.01
Per share effect—diluted ¥ 0.20 ¥ 0.01

Taxation - Summary of Profit Be

Taxation - Summary of Profit Before Tax (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Profit Before Tax Line Item
Profit before income tax expense ¥ 2,003 ¥ 1,597 ¥ 114
Foreign Countries
Profit Before Tax Line Item
Profit before income tax expense(1,579)266 (178)
Country of Domicile
Profit Before Tax Line Item
Profit before income tax expense ¥ 3,582 ¥ 1,331 ¥ 292

Taxation - Summary of Deferred

Taxation - Summary of Deferred Tax Assets and Deferred Tax Liabilities (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Prepayment and other investments ¥ 901 ¥ 191
Deferred revenue(27)
Total deferred tax assets123 105
Net deferred tax assets123 105
Total deferred tax liabilities354 304
Net deferred liabilities354 304
Temporary Differences
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Prepayment and other investments39 6
Deferred revenue30 24
Accruals40 45
Deemed distribution19 25
Others3 6
Total deferred tax assets131 106
Set-off of deferred tax liabilities pursuant to set-off provisions(8)(1)
Net deferred tax assets123 105
Intangible assets acquired in business combinations362 298
Others7
Total deferred tax liabilities362 305
Net deferred liabilities ¥ 354 ¥ 304

Taxation - Summary of Recovery

Taxation - Summary of Recovery of Deferred Income Tax (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Major Components Of Tax Expense Income [Abstract]
to be recovered after more than 12 months ¥ 44 ¥ 26
to be recovered within 12 months79 79
Net deferred tax assets123 105
to be recovered after more than 12 months284 250
to be recovered within 12 months70 54
Net deferred liabilities ¥ 354 ¥ 304

Taxation - Summary of Movements

Taxation - Summary of Movements of Deferred Income Tax Assets (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance ¥ 105
Ending balance123 ¥ 105
Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance106 87
Credited to income statement25 19 ¥ 43
Recognized in equity36
Business combination (Note 24)8
Ending balance131 106 87
Prepayment and Other Investments | Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance6
Credited to income statement33 6
Ending balance39 6
Deferred Revenue | Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance24 35
Credited to income statement6 (11)31
Business combination (Note 24)4
Ending balance30 24 35
Accruals | Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance45 11
Credited to income statement(5)34 11
Ending balance40 45 11
Deemed Distribution | Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance25 36
Credited to income statement(6)(11)
Recognized in equity36
Ending balance19 25 36
Others | Deferred Tax Assets
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance6 5
Credited to income statement(3)1 1
Business combination (Note 24)4
Ending balance ¥ 3 ¥ 6 ¥ 5

Taxation - Summary of Movemen_2

Taxation - Summary of Movements of Deferred Income Tax Liabilities (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance ¥ 304
Ending balance354 ¥ 304
Deferred Tax Liabilities
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance305 350
Credited to income statement(59)(56) ¥ (33)
Business combination (Note 24)116 11 383
Ending balance362 305 350
Intangible Assets | Deferred Tax Liabilities
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance300 347
Credited to income statement(54)(58)(36)
Business combination (Note 24)116 11 383
Ending balance362 300 347
Others 1 | Deferred Tax Liabilities
Disclosure Of Temporary Difference Unused Tax Losses And Unused Tax Credits [Line Items]
Beginning balance5 3
Credited to income statement ¥ (5)2 3
Ending balance ¥ 5 ¥ 3

Earning per share - Summary of

Earning per share - Summary of Computation of Basic and Diluted Net Income Per Share (Details) - CNY (¥) ¥ / shares in Units, ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Basic income per share calculation
Equity holders of the Company ¥ 1,833 ¥ 1,326 ¥ 82
Weighted average number of Class A and Class B ordinary shares outstanding3,076,314,670 2,593,157,207 1,831,604,053
Diluted net income per share calculation
Equity holders of the Company ¥ 1,833 ¥ 1,326 ¥ 82
Weighted average number of Class A and Class B ordinary shares outstanding3,076,314,670 2,593,157,207 1,831,604,053
Adjustments for share options and RSU82,906,218 46,309,205 67,815,772
Number of shares used in computing diluted earnings per share attributable to the Company3,159,220,888 2,639,466,412 1,899,419,825
Class A And Class B Ordinary Shares
Basic income per share calculation
Basic ¥ 0.60 ¥ 0.51 ¥ 0.04
Diluted net income per share calculation
Diluted0.58 ¥ 0.50 ¥ 0.04
American Depositary Shares
Basic income per share calculation
Basic1.19
Diluted net income per share calculation
Diluted ¥ 1.16

Property Plant and Equipment -

Property Plant and Equipment - Summary of Property Plant and Equipment (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Property Plant And Equipment [Line Items]
Cost ¥ 127 ¥ 108 ¥ 3
Additions116 83 41
Business combination (Note 24)4 96
Disposals(1)(2)(2)
Depreciation charge(78)(62)(30)
Closing net book amount168 127 108
Gross carrying amount
Disclosure Of Property Plant And Equipment [Line Items]
Cost220 139 4
Closing net book amount335 220 139
Accumulated depreciation and amortisation [member]
Disclosure Of Property Plant And Equipment [Line Items]
Cost(93)(31)(1)
Closing net book amount(167)(93)(31)
Servers And Network Equipment
Disclosure Of Property Plant And Equipment [Line Items]
Cost72 65
Additions95 43 31
Business combination (Note 24)52
Disposals(1)(1)(1)
Depreciation charge(45)(35)(17)
Closing net book amount121 72 65
Servers And Network Equipment | Gross carrying amount
Disclosure Of Property Plant And Equipment [Line Items]
Cost123 82
Closing net book amount217 123 82
Servers And Network Equipment | Accumulated depreciation and amortisation [member]
Disclosure Of Property Plant And Equipment [Line Items]
Cost(51)(17)
Closing net book amount(96)(51)(17)
Leasehold improvements
Disclosure Of Property Plant And Equipment [Line Items]
Cost43 32
Additions10 33 6
Business combination (Note 24)3 36
Depreciation charge(25)(22)(10)
Closing net book amount31 43 32
Leasehold improvements | Gross carrying amount
Disclosure Of Property Plant And Equipment [Line Items]
Cost75 42
Closing net book amount88 75 42
Leasehold improvements | Accumulated depreciation and amortisation [member]
Disclosure Of Property Plant And Equipment [Line Items]
Cost(32)(10)
Closing net book amount(57)(32)(10)
Office Furniture Equipment And Other
Disclosure Of Property Plant And Equipment [Line Items]
Cost12 11 3
Additions11 7 4
Business combination (Note 24)1 8
Disposals(1)(1)
Depreciation charge(8)(5)(3)
Closing net book amount16 12 11
Office Furniture Equipment And Other | Gross carrying amount
Disclosure Of Property Plant And Equipment [Line Items]
Cost22 15 4
Closing net book amount30 22 15
Office Furniture Equipment And Other | Accumulated depreciation and amortisation [member]
Disclosure Of Property Plant And Equipment [Line Items]
Cost(10)(4)(1)
Closing net book amount ¥ (14) ¥ (10) ¥ (4)

Property Plant and Equipment _2

Property Plant and Equipment - Summary of Depreciation Charged to Income Statements (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Property Plant And Equipment [Line Items]
Depreciation charged ¥ 78 ¥ 62 ¥ 30
Cost of Revenues [Member]
Disclosure Of Property Plant And Equipment [Line Items]
Depreciation charged47 33 15
Selling and Marketing Expenses [Member]
Disclosure Of Property Plant And Equipment [Line Items]
Depreciation charged1 2 2
General and Administrative Expenses [Member]
Disclosure Of Property Plant And Equipment [Line Items]
Depreciation charged ¥ 30 ¥ 27 ¥ 13

Intangible Assets - Summary of

Intangible Assets - Summary of Intangible Assets (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Intangible Assets [Line Items]
Cost ¥ 2,457 ¥ 2,121 ¥ 2,218
Accumulated amortization(694)(404)(211)
Net book amount1,763 1,717 2,007
Opening net book amount1,717 2,007
Additions15 4
Business combination (Note 24)323 24 2,213
Disposals(1)(1)
Amortization charge(291)(317)(206)
Closing net book amount1,763 1,717 2,007
Domain Name Trademark And Internet Audio Video Program Transmission License
Disclosure Of Intangible Assets [Line Items]
Cost1,340 1,340 1,340
Accumulated amortization(287)(171)(55)
Net book amount1,053 1,169 1,285
Opening net book amount1,169 1,285
Business combination (Note 24)1,340
Amortization charge(116)(116)(55)
Closing net book amount1,053 1,169 1,285
Copyrights
Disclosure Of Intangible Assets [Line Items]
Cost285
Accumulated amortization(13)
Net book amount272
Additions4
Business combination (Note 24)281
Amortization charge(13)
Closing net book amount272
Supplier Resources
Disclosure Of Intangible Assets [Line Items]
Cost335 331 315
Accumulated amortization(123)(72)(23)
Net book amount212 259 292
Opening net book amount259 292
Business combination (Note 24)4 16 315
Amortization charge(51)(49)(23)
Closing net book amount212 259 292
Customer-related intangible assets
Disclosure Of Intangible Assets [Line Items]
Cost238 238 235
Accumulated amortization(152)(90)(29)
Net book amount86 148 206
Opening net book amount148 206
Business combination (Note 24)3 235
Amortization charge(62)(61)(29)
Closing net book amount86 148 206
Non Compete Agreement
Disclosure Of Intangible Assets [Line Items]
Cost134 131 131
Accumulated amortization(71)(42)(14)
Net book amount63 89 117
Opening net book amount89 117
Business combination (Note 24)3 1 131
Amortization charge(29)(29)(14)
Closing net book amount63 89 117
Other Intangible Assets
Disclosure Of Intangible Assets [Line Items]
Cost125 81 197
Accumulated amortization(48)(29)(90)
Net book amount77 52 107
Opening net book amount52 107
Additions11 4
Business combination (Note 24)35 4 192
Disposals(1)(1)
Amortization charge(20)(62)(85)
Closing net book amount ¥ 77 ¥ 52 ¥ 107

Intangible Assets - Summary o_2

Intangible Assets - Summary of Amortization of Intangible Assets Allocated (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Intangible Assets [Line Items]
Amortisation charge ¥ 291 ¥ 317 ¥ 206
Cost of Revenues [Member]
Disclosure Of Intangible Assets [Line Items]
Amortisation charge78 60 27
Selling and Marketing Expenses [Member]
Disclosure Of Intangible Assets [Line Items]
Amortisation charge62 109 109
General and Administrative Expenses [Member]
Disclosure Of Intangible Assets [Line Items]
Amortisation charge ¥ 151 ¥ 148 ¥ 70

Goodwill - Summary of Goodwill

Goodwill - Summary of Goodwill (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Changes In Goodwill [Abstract]
Beginning balance ¥ 16,262 ¥ 15,762
Goodwill acquired826 500 ¥ 15,762
Ending balance ¥ 17,088 ¥ 16,262 ¥ 15,762

Goodwill - Additional Informati

Goodwill - Additional Information (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017
Disclosure Of Reconciliation Of Changes In Goodwill [Line Items]
Estimated annual growth rate3.00%
Goodwill impairment ¥ 0 ¥ 0
Bottom of range
Disclosure Of Reconciliation Of Changes In Goodwill [Line Items]
Pre-tax discount rates15.00%
Top of range
Disclosure Of Reconciliation Of Changes In Goodwill [Line Items]
Pre-tax discount rates17.50%

Investments Accounted for Usi_3

Investments Accounted for Using Equity Method - Summary of Investments Accounted for Using Equity Method (Detail) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Investments Accounted For Using Equity Method [Abstract]
Investments in associates ¥ 190 ¥ 324
Investments in joint ventures46 54
Investments accounted for using equity method ¥ 236 ¥ 378 ¥ 292

Investments Accounted for Usi_4

Investments Accounted for Using Equity Method - Summary of Share of Profits/(Losses) of Investments Accounted for Using Equity Method (Detail) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Share of profit/(loss) of investments accounted for using equity method:
Associates ¥ 12 ¥ 13 ¥ 12
Joint ventures(13)(9)(1)
Share of profit (loss) of associates and joint ventures accounted for using equity method ¥ (1) ¥ 4 ¥ 11

Investments Accounted for Usi_5

Investments Accounted for Using Equity Method - Summary of Movement of Investments in Associates and Joint Ventures (Detail) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Investments Accounted For Using Equity Method [Abstract]
At beginning of the year ¥ 378 ¥ 292
Additions99 89
Business combination3 1 ¥ 290
Share of profit/(loss)(1)4 11
Disposal(50)(12)
Step acquisition accounted for as business combination under common control(184)
Step acquisition(14)
Impairment provision(2)(2)
Currency translation differences7 (6)3
At end of the year ¥ 236 ¥ 378 ¥ 292

Investments Accounted for Usi_6

Investments Accounted for Using Equity Method - Summary of Principal Associates and Joint Ventures (Detail)12 Months Ended
Dec. 31, 2018Dec. 31, 2017
Beijing Quku Technology Co., Ltd
Disclosure Of Joint Ventures [Line Items]
Name of entityBeijing Quku Technology Co., Ltd.
Place of business/ country of incorporationChina
% of ownership interest38.00%38.00%
United Entertainment Corporation
Disclosure Of Joint Ventures [Line Items]
Name of entityUnited Entertainment Corporation
Place of business/ country of incorporationCayman
% of ownership interest30.00%
Liquid State Limited
Disclosure Of Joint Ventures [Line Items]
Name of entityLiquid State Limited
Place of business/ country of incorporationHong Kong
% of ownership interest50.00%50.00%
Beijing New Sound Entertainment Ltd
Disclosure Of Joint Ventures [Line Items]
Name of entityBeijing New Sound Entertainment Ltd.
Place of business/ country of incorporationChina
% of ownership interest48.00%70.00%
Beijing Tianhaoshengshi Entertainment Culture Co., Ltd
Disclosure Of Joint Ventures [Line Items]
Name of entityBeijing Tianhaoshengshi Entertainment Culture Co., Ltd.
Place of business/ country of incorporationChina
% of ownership interest43.90%
Shenzhen United Entertainment Equity Investment Center
Disclosure Of Joint Ventures [Line Items]
Name of entityShenzhen United Entertainment Equity Investment Center
(Limited Partnership)
Place of business/ country of incorporationChina
% of ownership interest50.00%
Beijing Tianhaoshengshi Music Cultural Ltd
Disclosure Of Joint Ventures [Line Items]
Name of entityBeijing Tianhaoshengshi Music Cultural Ltd.
Place of business/ country of incorporationChina
% of ownership interest45.00%

Investments Accounted for Usi_7

Investments Accounted for Using Equity Method - Summary of Financial Information of Group Investments Accounted for Using Equity Method (Detail) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Financial Information Of Group Investments Accounted For Using Equity Method [Line Items]
Total revenues ¥ 18,985 ¥ 10,981 ¥ 4,361
Cost of revenues(11,708)(7,171)(3,129)
Income from operations2,039 1,593 103
Profit for the year1,832 1,319 85
Total current assets20,778 7,467
Total non-current assets23,827 22,533
Current liabilities6,238 3,527
Non-current liabilities595 325
Associates and Joint Ventures
Disclosure Of Financial Information Of Group Investments Accounted For Using Equity Method [Line Items]
Total revenues362 403 260
Cost of revenues(163)(280)(141)
Income from operations6 16 65
Profit for the year(5)17 38
Total current assets948 786 709
Total non-current assets91 201 160
Current liabilities ¥ 222 200 168
Non-current liabilities ¥ 1 ¥ 5

Available for Sale Financial _3

Available for Sale Financial Assets - Schedule of Equity Investment (Details) ¥ in MillionsDec. 31, 2017CNY (¥)
Disclosure Of Financial Assets [Line Items]
Equity investments in unlisted securities ¥ 10,208
Financial Assets Available-for-sale, Category
Disclosure Of Financial Assets [Line Items]
Equity investments in unlisted securities3,740
Financial Assets Available-for-sale, Category | Equity Investments in Unlisted Securities
Disclosure Of Financial Assets [Line Items]
Equity investments in unlisted securities ¥ 3,740

Available for Sale Financial _4

Available for Sale Financial Assets - Schedule of Available for Sale Financial Assets (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Financial Assets [Line Items]
Available for sale financial assets at beginning of the year ¥ 3,740
Available for sale financial assets at the end of the year ¥ 3,740
Financial Assets Available-for-sale, Category
Disclosure Of Financial Assets [Line Items]
Available for sale financial assets at beginning of the year3,740 10
Additions7,547
Business combination ¥ 10
Deemed distribution(3,774)
Currency translation differences(43)
Reclassified to financial assets at fair value through other comprehensive income(Note 2.2(a))(3,730)
Reclassified to other investments ¥ (10)
Available for sale financial assets at the end of the year ¥ 3,740 ¥ 10

Available For Sale Financial _5

Available For Sale Financial Assets - Additional Information (Details) ¥ in Millions, $ in MillionsDec. 07, 2017sharesDec. 31, 2017CNY (¥)sharesDec. 31, 2017USD ($)sharesMar. 31, 2018shares
Disclosure Of Financial Assets [Line Items]
Number of shares issued in the merger24,757,517
Amount tranferred under bonus shares waiver | ¥ ¥ 1
Ordinary Shares
Disclosure Of Financial Assets [Line Items]
Number of shares issued in the merger97,318,238
Fully paid ordinary shares as stock dividend to shareholders255,185,879
Fully paid ordinary shares as stock dividend to other than related party88,726,036
SpotifyTechnologySA [member] | Ordinary Shares
Disclosure Of Financial Assets [Line Items]
Number of ordinary shares subscribed8,552,440 8,552,440
Share subscription percentage of shares issued4.92%4.92%
Ordinary shares subscribed value ¥ 7,547 $ 1,142
Number of shares issued in the merger282,830,698 282,830,698
Percentage of ownership interest in related party tranferred to shareholders50.00%50.00%
Ownership interest in related party tranferred to shareholders value | ¥ ¥ 3,774

Financial Assets at Fair Valu_2

Financial Assets at Fair Value - Summary of Financial Assets at Fair Value Through Other Comprehensive Income (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Fair Value Of Investments In Equity Instruments Designated As Measured At Fair Value Through Other Comprehensive Income [Line Items]
Currency translation differences ¥ 552 ¥ (143) ¥ 42
At end of the year3,331
Equity Investments in Unlisted Securities
Disclosure Of Fair Value Of Investments In Equity Instruments Designated As Measured At Fair Value Through Other Comprehensive Income [Line Items]
Reclassification from available-for-sale financial assets (note)3,730
Fair value change(675)
Currency translation differences276
At end of the year ¥ 3,331

Financial Assets at Fair Valu_3

Financial Assets at Fair Value - Summary of Movement of Other Investment (Details) - Equity Investments in Unlisted Securities ¥ in Millions12 Months Ended
Dec. 31, 2018CNY (¥)
Disclosure Of Financial Assets Designated As Measured At Fair Value Through Profit Or Loss [Line Items]
Reclassification from available-for-sale financial assets ¥ 10
Addition (note)276
Fair value change(30)
At end of the year ¥ 256

Financial Assets at Fair Valu_4

Financial Assets at Fair Value - Summary of Movement of Other Investment (Parenthetical) (Details) ¥ in MillionsDec. 31, 2018CNY (¥)
Disclosure Of Other Investments Designated As Measured At Fair Value Through Profit Or Loss [Line Items]
Acquisition of minority stake ¥ 217
Entertainment and Media Company [Member]
Disclosure Of Other Investments Designated As Measured At Fair Value Through Profit Or Loss [Line Items]
Acquisition of minority stake160
Music Related Media Projects [Member]
Disclosure Of Other Investments Designated As Measured At Fair Value Through Profit Or Loss [Line Items]
Investment in minority interest ¥ 116

Prepayments, deposits and other

Prepayments, deposits and other receivables - Summary of Prepayments, deposits and other receivables (Detail) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Non-current assets
Prepayment and other investments ¥ 901 ¥ 191
Prepayments, deposits and other assets901 204
Current assets
Prepaid contents royalties1,450 831
Value-added tax recoverable85 82
Prepaid vendors deposits and other receivables75 30
Prepaid promotion and other expenses130 61
Others55 39
Prepayments, deposits and other assets1,823 1,102
Jiyun
Non-current assets
Receivables from an associate, Jiyun13
Tencent
Current assets
Receivable from Tencent (Note 29(b)) ¥ 28 ¥ 59

Accounts Receivables - Summary

Accounts Receivables - Summary of Accounts Receivable and Ageing Analysis (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Accounts Receivable Line Item
Accounts receivable ¥ 1,490 ¥ 1,170
Less: provision for impairment of trade receivables(7)(9) ¥ (6)
Accounts receivable, net1,483 1,161
Ageing analysis of the accounts receivables based on invoice date
Accounts Receivable Line Item
Accounts receivable1,490 1,170
Ageing analysis of the accounts receivables that past due but not impaired
Accounts Receivable Line Item
Accounts receivable114 51
Up to 3 months | Ageing analysis of the accounts receivables based on invoice date
Accounts Receivable Line Item
Accounts receivable1,304 1,123
3 to 6 months | Ageing analysis of the accounts receivables based on invoice date
Accounts Receivable Line Item
Accounts receivable144 31
Over 6 months | Ageing analysis of the accounts receivables based on invoice date
Accounts Receivable Line Item
Accounts receivable42 16
Over 6 months | Ageing analysis of the accounts receivables that past due but not impaired
Accounts Receivable Line Item
Accounts receivable20 7
Up to 6 months | Ageing analysis of the accounts receivables that past due but not impaired
Accounts Receivable Line Item
Accounts receivable ¥ 94 ¥ 44

Accounts Receivable - Summary o

Accounts Receivable - Summary of Provision for Impairment of Accounts Receivable (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Trade And Other Receivables [Abstract]
Begining Balance ¥ 9 ¥ 6
Provision for impairment recognized in income statement3 6 ¥ 7
Receivables written off during the year as uncollectible(5)(3)(1)
Ending Balance ¥ 7 ¥ 9 ¥ 6

Cash and Cash Equivalents - Sch

Cash and Cash Equivalents - Schedule of Cash and Cash Equivalents (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Cash And Cash Equivalents [Abstract]
Cash at bank ¥ 7,557 ¥ 3,419
Term deposits with initial terms within three months9,799 1,755
Cash and cash equivalents ¥ 17,356 ¥ 5,174 ¥ 3,071

Cash and Cash Equivalents - Add

Cash and Cash Equivalents - Additional Information (Details)Dec. 31, 2018Dec. 31, 2017
Cash And Cash Equivalents [Abstract]
Effective interest rate of term deposits3.24%2.91%

Share Capital - Schedule of Cla

Share Capital - Schedule of Classes of Share Capital (Details) ¥ in Millions, $ in Millions3 Months Ended12 Months Ended
Mar. 31, 2018CNY (¥)sharesMar. 31, 2018USD ($)sharesDec. 31, 2018CNY (¥)sharesDec. 31, 2017CNY (¥)sharesDec. 31, 2016CNY (¥)shares
Disclosure Of Classes Of Share Capital [Line Items]
Beginning balance ¥ 26,148 ¥ 26,148 ¥ 20,634 ¥ 456
Issuance of ordinary shares for the reverse acquisition, value17,999
Issuance of ordinary shares ¥ 775 $ 123 2,433 2,071
Distribution to Tencent(3,774)
Issuance of ordinary shares upon initial public offering3,496
Ending balance ¥ 37,772 ¥ 26,148 ¥ 20,634
Share Capital
Disclosure Of Classes Of Share Capital [Line Items]
Balance,shares | shares2,970,573,050 2,970,573,050 2,970,573,050 2,543,814,662 1,290,862,550
Issuance of ordinary shares for the reverse acquisition, value | shares1,080,239,767
Issuance of ordinary shares | shares97,381,238 15,939,000 172,712,345
Issuance of stock dividend, share | shares88,726,036
Exercise of share options, share | shares39,262,654
Issuance of ordinary shares in exchange forordinary shares in an investee | shares282,830,698
Issuance of puttable ordinary | shares24,757,517
Issuance of ordinary shares upon initial public offering | shares82,059,658
Balance,shares | shares3,265,986,486 2,970,573,050 2,543,814,662
Beginning balance ¥ 2 ¥ 2 ¥ 2 ¥ 1
Issuance of ordinary shares for the reverse acquisition, value1
Ending balance ¥ 2 2 2
Share Capital | UEC
Disclosure Of Classes Of Share Capital [Line Items]
Issuance of ordinary shares | shares23,084,008
Share Capital | Musical Label Partners
Disclosure Of Classes Of Share Capital [Line Items]
Issuance of ordinary shares | shares68,131,015
Additional Paid-In Capital
Disclosure Of Classes Of Share Capital [Line Items]
Beginning balance ¥ 23,915 ¥ 23,915 20,063
Issuance of ordinary shares for the reverse acquisition, value17,992
Issuance of ordinary shares2,433 2,071
Exercise of share options79
Issuance of ordinary shares in exchange forordinary shares in an investee, value7,547
Distribution to Tencent(3,774)
Issuance of ordinary shares upon initial public offering3,496
Ending balance33,776 ¥ 23,915 ¥ 20,063
Additional Paid-In Capital | UEC
Disclosure Of Classes Of Share Capital [Line Items]
Issuance of ordinary shares1,027
Additional Paid-In Capital | Musical Label Partners
Disclosure Of Classes Of Share Capital [Line Items]
Issuance of ordinary shares ¥ 2,905

Share Capital - Schedule of C_2

Share Capital - Schedule of Classes of Share Capital (Parenthetical) (Details) - ¥ / sharesDec. 31, 2018Dec. 31, 2017Dec. 31, 2016Dec. 31, 2015
Disclosure Of Classes Of Share Capital [Abstract]
Par value per share ¥ 0.000083 ¥ 0.000083 ¥ 0.000083 ¥ 0.000083
Number of shares authorized4,800,000,000 4,800,000,000 4,800,000,000 1,800,000,000

Share Capital - Schedule Analys

Share Capital - Schedule Analysis of Issued Shares (Details) - CNY (¥)Dec. 31, 2018Dec. 12, 2018Mar. 31, 2018Dec. 31, 2017
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger24,757,517
Share capital ¥ 2,000,000 ¥ 2,000,000
Share Capital
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger3,265,986,486
Share capital ¥ 2,000,000
Class A ordinary shares [member]
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger82,059,658
Class A ordinary shares [member] | Share Capital
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger609,770,009
Class B ordinary shares [member] | Share Capital
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger2,656,216,477
Share capital ¥ 2,000,000

Share Capital - Additional Info

Share Capital - Additional Information (Detail) ¥ in Millions, $ in Millions3 Months Ended12 Months Ended
Mar. 31, 2018CNY (¥)sharesMar. 31, 2018USD ($)sharesDec. 31, 2018CNY (¥)Dec. 31, 2018USD ($)Dec. 31, 2016CNY (¥)Dec. 12, 2018sharesOct. 03, 2018USD ($)shares
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger24,757,517 24,757,517
Issuance of ordinary shares ¥ 775 $ 123 ¥ 2,433 ¥ 2,071
Proceed from issuance of shares422 67 1,386
Business cooperation arrangements in turn of contents cooperation ¥ 353 $ 56
lock up period of shares3 years3 years
Payments of cash in relation to put right422 $ 67
Equity-settled share-based compensation353 56
Payments of cash in relation to put right ¥ 1,519 $ 221
WMG China LLC [member]
Disclosure Of Classes Of Share Capital [Line Items]
Aggregate cash consideration | $ $ 200
Ordinary Shares
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger97,318,238 97,318,238
Issuance of ordinary shares ¥ 2,433 $ 382
Ordinary Shares | WMG China LLC [member]
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger68,131,015
American Depositary Shares
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger41,029,829
Class A ordinary shares [member]
Disclosure Of Classes Of Share Capital [Line Items]
Number of shares issued in the merger82,059,658

Schedule of Other Reserve (Deta

Schedule of Other Reserve (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance ¥ 26,148 ¥ 20,634 ¥ 456
Currency translation differences552 (143)42
Fair value changes on financial assets at fair value through other comprehensive income(675)
Acquisition of remaining interests in associates140 61
Share-based compensation-value of employee services840 362 170
Ending balance37,772 26,148 20,634
Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance997 617 577
Currency translation differences552 (143)42
Fair value changes on financial assets at fair value through other comprehensive income(675)
Deemed contribution119
Acquisition of remaining interests in associates(831)
Share-based compensation-value of employee services840 362 170
Deemed distribution(189)
Appropriation to statutory reserve20 42 17
Ending balance903 997 617
Reserve of share-based payments [Member] | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance576 142
Deemed contribution99
Share-based compensation-value of employee services840 335 142
Ending balance1,416 576 142
Contribution From Or Distribution To Holding Company [Member] | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance463 416 577
Deemed contribution20
Share-based compensation-value of employee services27 28
Deemed distribution(189)
Ending balance463 463 416
Statutory reserve [Member] | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance59
Appropriation to statutory reserve20 42 17
Ending balance79 59
Reserve of exchange differences on translation [Member] | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Beginning balance(101)42
Currency translation differences552 (143)42
Ending balance451 ¥ (101) ¥ 42
Fair value reserve [Member] | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Fair value changes on financial assets at fair value through other comprehensive income(675)
Ending balance(675)
Others | Other Reserves
Disclosure Of Reserves Within Equity [Line Items]
Acquisition of remaining interests in associates(831)
Ending balance ¥ (831)

Share Based Compensation - Addi

Share Based Compensation - Additional Information (Details)1 Months Ended12 Months Ended
Oct. 31, 2016sharesDec. 31, 2018CNY (¥)sharesDec. 31, 2017CNY (¥)Dec. 31, 2018USD ($)Dec. 31, 2017USD ($)Dec. 31, 2017HKD ($)Dec. 31, 2016CNY (¥)Dec. 31, 2016USD ($)Dec. 31, 2016HKD ($)
Disclosure of Share-based Compensation [Line Items]
Granted12,034,480
Weighted average fair value at measurement date, share options granted ¥ 227.03 $ 271.6 ¥ 144.25 $ 172.56
Expected retention rate90.00%90.00%
Restricted Shares
Disclosure of Share-based Compensation [Line Items]
Number of other equity instruments granted in share-based payment arrangement7,172,472
Restricted Share Units
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsone-fourth(l/4) of which shall vest eighteen months after grant date, and one-fourth (1/4) every year after
Weighted average fair value at measurement date, share options granted ¥ 42.06 ¥ 21.27 $ 6.12 $ 3.26 ¥ 13.98 $ 2.14
Restricted Share Units | Tencent Holdings Limited
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsRSUs are subject to a three-year or four-year vesting schedule, and each year after the grant date, one-third (1/3) or one-fourth (1/4) shall vest accordingly. No outstanding share options or RSUs will be exercisable or subject to vesting after the expiry of a maximum of seven years from the date of grant.
Stock Option
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsOne-fourth (1/4) of which shall vest nine months or eighteen months after grant date, respectively, as provided in the grant agreement, and one-fourth (1/4) of which vest upon every year
Stock Option | Tencent Holdings Limited
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsShare options granted are generally subject to a four-year or five-year vesting schedule as determined by the board of directors of Tencent. Under the four-year vesting schedule, share options in general vest one-fourth (1/4) upon the first anniversary of the grant date, and one-fourth (1/4) every year after. Under the five-year vesting schedule, depending on the nature and purpose of the grant, share options in general vest one-fifth (1/5) upon the first or second anniversary of the grant date, respectively, as provided in the grant agreement, and one-fifth (1/5) every year after.
First Category Vesting Schedule
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsone-fourth (1/4) of which shall vest and become exercisable upon the first anniversary of the date of grant and one-eighth (1/8) of which shall vest and become exercisable on each half of a year anniversary thereafter.
Second Category Vesting Schedule
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsone-fourth (1/4) of which shall vest upon the first anniversary of the grant date and one-sixteenth (1/16) of which shall vest on each three months thereafter. Under the second category vesting schedule, in the event of the Company’s completion of an IPO or termination of the option holder’s employment agreement by the Company without cause, the vesting schedule shall be accelerated by a one year period (which means that the whole vesting schedule shall be shortened from four years to three years).
Third Category Vesting Schedule
Disclosure of Share-based Compensation [Line Items]
Description of vesting conditions for share-based paymentsall options shall vest upon the first anniversary of the grant date, and in the event of the
2014 Share Incentive Plan
Disclosure of Share-based Compensation [Line Items]
Number of common shares reserved for future issuance96,704,847

Share Based Compensation - Sche

Share Based Compensation - Schedule of Number, weighted Average Exercise Prices and Weighted-average Grant Date Fair Value of Share Options (Details)1 Months Ended12 Months Ended
Oct. 31, 2016sharesDec. 31, 2018USD ($)sharesDec. 31, 2018HKD ($)sharesDec. 31, 2017USD ($)sharesDec. 31, 2017HKD ($)sharesDec. 31, 2016USD ($)sharesDec. 31, 2016HKD ($)sharesDec. 31, 2018HKD ($)sharesDec. 31, 2017HKD ($)sharesDec. 31, 2016HKD ($)shares
Disclosure of Share-based Compensation [Line Items]
Granted | shares12,034,480
2014 Share Incentive Plan
Disclosure of Share-based Compensation [Line Items]
Number of options outstanding beginning balance | shares53,498,273 53,498,273 96,704,847 96,704,847
Arising from business combination | shares98,821,647 98,821,647
Anti-dilution adjustments | shares4,731,938 4,731,938
Exercised | shares(39,262,654)(39,262,654)
Forfeited | shares(1,494,002)(1,494,002)(3,943,920)(3,943,920)(2,116,800)(2,116,800)
Number of options outstanding ending balance | shares56,736,209 56,736,209 53,498,273 53,498,273 96,704,847 96,704,847
Number of options Vested and expected to vest | shares49,573,551 87,734,832 49,573,551 87,734,832
Number of options exercisable | shares50,155,161 33,196,944 59,808,852 50,155,161 33,196,944 59,808,852
Number of options non vested | shares6,581,048 20,301,329 36,895,995 6,581,048 20,301,329 36,895,995
Weighted-average exercise price options outstanding beginning balance $ 0.21 $ 0.25
Weighted-average exercise price options arising from business combination $ 0.25
Weighted-average exercise price options forfeited0.240.240.29
Weighted-average grant date fair value options exercised0.30
Weighted-average exercise price options outstanding ending balance0.190.210.25
Weighted-average exercise price options Vested and expected to vest0.210.24
Weighted-average exercise price options exercisable0.180.180.25
Weighted-average exercise price options non vested0.250.260.24
Weighted-average grant date fair value options outstanding beginning balance2.092.05
Weighted-average grant date fair value options arising from business combination2.04
Weighted-average grant date fair value options forfeited2.052.081.98
Weighted-average grant date fair value options outstanding ending balance1.942.092.05
Weighted-average grant date fair value options vested and expected to vest2.092.04
Weighted-average grant date fair value options exercisable1.942.112.03
Weighted-average grant date fair value options non vested $ 1.91 2.06 $ 2.08
Weighted-average grant date fair value options exercised $ 1.98
2017 Restricted Share Scheme and 2017 Option Plan
Disclosure of Share-based Compensation [Line Items]
Number of options outstanding beginning balance | shares26,961,386 26,961,386 12,034,480 12,034,480
Granted | shares7,777,224 7,777,224 15,315,256 15,315,256 12,034,480 12,034,480
Anti-dilution adjustments | shares2,384,714 2,384,714
Forfeited | shares(1,037,021)(1,037,021)(388,350)(388,350)
Number of options outstanding ending balance | shares36,086,303 36,086,303 26,961,386 26,961,386 12,034,480 12,034,480
Number of options Vested and expected to vest | shares28,604,121 18,362,420 7,944,083 28,604,121 18,362,420 7,944,083
Number of options exercisable | shares7,252,971 7,252,971
Number of options non vested | shares28,833,332 26,961,386 12,034,480 28,833,332 26,961,386 12,034,480
Weighted-average exercise price options outstanding beginning balance $ 1.89 $ 2.53
Weighted-average exercise price options forfeited1.350.29
Weighted-average exercise price options outstanding ending balance2.751.89 $ 2.53
Weighted-average exercise price options Vested and expected to vest2.581.872.53
Weighted-average exercise price options exercisable1.76
Weighted-average exercise price options non vested3 1.892.53
Weighted-average grant date fair value options outstanding beginning balance2.171.03
Weighted-average grant date fair value options granted3.273.101.03
Weighted-average grant date fair value options forfeited1.853.39
Weighted-average grant date fair value options outstanding ending balance2.242.171.03
Weighted-average grant date fair value options vested and expected to vest2.382.181.03
Weighted-average grant date fair value options exercisable1.75
Weighted-average grant date fair value options non vested2.472.171.03
Weighted-average exercise price options granted $ 6.76 $ 1.35 $ 2.53
Share-based Compensation Plans | Tencent Holdings Limited
Disclosure of Share-based Compensation [Line Items]
Number of options outstanding beginning balance | shares85,335 85,335 85,660 85,660 67,500 67,500
Granted | shares32,410 32,410 53,160 53,160
Exercised | shares(10,235)(10,235)(32,735)(32,735)(35,000)(35,000)
Number of options outstanding ending balance | shares75,100 75,100 85,335 85,335 85,660 85,660
Number of options Vested and expected to vest | shares63,462 57,795 67,803 63,462 57,795 67,803
Number of options exercisable | shares24,212 8,055 22,500 24,212 8,055 22,500
Number of options non vested | shares50,888 77,280 63,160 50,888 77,280 63,160
Weighted-average exercise price options outstanding beginning balance $ 208.93 $ 129.88 $ 55.18
Weighted-average grant date fair value options exercised150.1664.8854.14
Weighted-average exercise price options outstanding ending balance216.94208.93129.88
Weighted-average exercise price options Vested and expected to vest $ 214.53 $ 208.52 $ 119.12
Weighted-average exercise price options exercisable207.49174.8626.08
Weighted-average exercise price options non vested221.43212.48166.85
Weighted-average grant date fair value options outstanding beginning balance64.4353.6350.90
Weighted-average grant date fair value options granted81.7055.42
Weighted-average grant date fair value options outstanding ending balance66.7664.4353.63
Weighted-average grant date fair value options vested and expected to vest66.1164.2553.52
Weighted-average grant date fair value options exercisable64.2155.4256
Weighted-average grant date fair value options non vested $ 67.97 $ 65.37 $ 52.79
Weighted-average grant date fair value options exercised $ 47.30 53.2851.09
Weighted-average exercise price options granted $ 272.36 $ 174.86

Share Based Compensation - Summ

Share Based Compensation - Summary of Assumptions Used to Determine Fair value of Share Options (Details) - USD ($)12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
2014 Share Incentive Plan
Disclosure of Share-based Compensation [Line Items]
Risk free interest rate1.50%1.50%
Expected dividend yield0.00%0.00%
Contractual life10 years10 years
2014 Share Incentive Plan | Bottom of range
Disclosure of Share-based Compensation [Line Items]
Expected volatility range64.00%64.00%
Exercise multiples $ 2.2 $ 2.2
2014 Share Incentive Plan | Top of range
Disclosure of Share-based Compensation [Line Items]
Expected volatility range65.00%65.00%
Exercise multiples $ 2.8 $ 2.8
2017 Restricted Share Scheme and 2017 Option Plan
Disclosure of Share-based Compensation [Line Items]
Risk free interest rate1.60%
Expected dividend yield0.00%0.00%0.00%
Expected volatility range55.00%
Exercise multiples $ 2.8 $ 2.8
Contractual life10 years10 years10 years
2017 Restricted Share Scheme and 2017 Option Plan | Bottom of range
Disclosure of Share-based Compensation [Line Items]
Risk free interest rate2.97%2.10%
Expected volatility range50.00%55.00%
Exercise multiples $ 2.2
2017 Restricted Share Scheme and 2017 Option Plan | Top of range
Disclosure of Share-based Compensation [Line Items]
Risk free interest rate3.21%2.50%
Expected volatility range60.00%60.00%
Exercise multiples $ 2.8
Share-based Compensation Plans | Tencent Holdings Limited
Disclosure of Share-based Compensation [Line Items]
Risk free interest rate1.39%0.69%
Expected dividend yield0.33%0.32%
Expected volatility range30.00%35.00%
Exercise multiples $ 7 $ 2.5
Contractual life7 years7 years

Share Based Compensation - Sc_2

Share Based Compensation - Schedule of Share Options Outstanding (Details)12 Months Ended
Dec. 31, 2018USD ($)sharesDec. 31, 2018HKD ($)sharesDec. 31, 2017sharesDec. 31, 2016sharesDec. 31, 2015shares
2014 Share Incentive Plan
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Share options56,736,209 56,736,209 53,498,273 96,704,847
Weighted average remaining contractual life of optionsoutstanding at end of period:6.236.237.22
2014 Share Incentive Plan | Exercise Price Range One
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 1, 2015
Expiry dateFeb. 28,
2025
Exercise | $ $ 0.000076
Share options2,348,099 2,348,099 2,348,099
2014 Share Incentive Plan | Exercise Price Range Two
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 1, 2015
Expiry dateFeb. 28,
2025
Exercise | $ $ 0.27
Share options2,714,940 2,714,940 2,630,000
2014 Share Incentive Plan | Exercise Price Range Three
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 1, 2015
Expiry dateFeb. 28,
2025
Exercise | $ $ 0.000076
Share options12,945,345 12,945,345 11,924,136
2014 Share Incentive Plan | Exercise Price Range Four
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 1, 2015
Expiry dateFeb. 28,
2025
Exercise | $ $ 0.27
Share options10,776,631 10,776,631 9,939,200
2014 Share Incentive Plan | Exercise Price Range Five
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 30, 2015
Expiry dateMar. 29,
2025
Exercise | $ $ 0.27
Share options3,748,650 3,748,650 3,444,042
2014 Share Incentive Plan | Exercise Price Range Six
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJuly 1, 2015
Expiry dateJun. 30,
2025
Exercise | $ $ 0.27
Share options75,100 75,100 200,000
2014 Share Incentive Plan | Exercise Price Range Seven
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateOctober 1, 2015
Expiry dateSep. 30,
2025
Exercise | $ $ 0.27
Share options791,880 791,880 780,600
2014 Share Incentive Plan | Exercise Price Range Eight
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateDecember 31, 2015
Expiry dateDec. 30,
2025
Exercise | $ $ 0.27
Share options3,036,686 3,036,686 2,933,281
2014 Share Incentive Plan | ExerciseP rice Range Nine
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateDecember 31, 2015
Expiry dateDec. 30,
2025
Exercise | $ $ 0.000076
Share options230,750 230,750 212,000
2014 Share Incentive Plan | Exercise Price Range
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 1, 2016
Expiry dateFeb. 28,
2026
Exercise | $ $ 0.27
Share options746,643 746,643 761,000
2014 Share Incentive Plan | Exercise Price Range Eleven
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateMarch 31, 2016
Expiry dateMar. 30,
2026
Exercise | $ $ 0.27
Share options370,040 370,040 340,500
2014 Share Incentive Plan | Exercise Price Range Twelve
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJune 1, 2016
Expiry dateMay 30,
2026
Exercise | $ $ 0.27
Share options7,098,340 7,098,340 6,521,513
2014 Share Incentive Plan | Exercise Price Range Thirteen
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJune 30, 2016
Expiry dateJun. 29,
2026
Exercise | $ $ 0.000076
Share options653,070 653,070 600,000
2014 Share Incentive Plan | Exercise Price Range Fourteen
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJune 30, 2016
Expiry dateJun. 29,
2026
Exercise | $ $ 0.27
Share options11,200,035 11,200,035 10,863,902
2017 Restricted Share Scheme and 2017 Option Plan
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Share options36,086,303 36,086,303 26,961,386 12,034,480
Weighted average remaining contractual life of optionsoutstanding at end of period:8.628.629.21
2017 Restricted Share Scheme and 2017 Option Plan | Exercise Price Range One
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJune 16, 2017
Expiry dateJun. 15,
2027
Exercise | $ $ 2.32
Share options13,098,930 13,098,930 12,034,480
2017 Restricted Share Scheme and 2017 Option Plan | Exercise Price Range Two
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateAugust 31, 2017
Expiry dateAug. 30,
2027
Exercise | $ $ 0.27
Share options7,768,593 7,768,593 7,666,803
2017 Restricted Share Scheme and 2017 Option Plan | Exercise Price Range Three
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateDecember 20, 2017
Expiry dateDec. 19,
2027
Exercise | $ $ 2.32
Share options7,902,280 7,902,280 7,260,103
2017 Restricted Share Scheme and 2017 Option Plan | Exercise Price Range Four
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateApril 16, 2018
Expiry dateApr. 15,
2028
Exercise | $ $ 4.04
Share options1,300,000 1,300,000
2017 Restricted Share Scheme and 2017 Option Plan | Exercise Price Range Five
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateOctober 17, 2018
Expiry dateOct. 16,
2028
Exercise | $ $ 7.14
Share options6,016,500 6,016,500
Share-based Compensation Plans | Tencent Holdings Limited
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Share options75,100 75,100 85,335 85,660 67,500
Share-based Compensation Plans | Exercise Price Range One | Tencent Holdings Limited
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJuly 10, 2014
Expiry dateJul. 9,
2021
Exercise | $ $ 26.08
Share options5,000
Share-based Compensation Plans | Exercise Price Range Two | Tencent Holdings Limited
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJuly 6, 2016
Expiry dateJul. 5,
2023
Exercise | $ $ 124.30
Share options42,690 42,690 47,925
Share-based Compensation Plans | Exercise Price Range Three | Tencent Holdings Limited
Disclosure Of Rang Of Exercise Prices Of Outstanding Share Options [Line Items]
Grant DateJuly 10, 2017
Expiry dateJul. 9,
2024
Exercise | $ $ 174.86
Share options32,410 32,410 32,410

Share Based Compensation - Sc_3

Share Based Compensation - Schedule of Movements in the number of RSUs and Awarded Shares (Details) - shares12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
2017 Restricted Share Scheme and 2017 Option Plan
Disclosure of Share-based Compensation [Line Items]
Number of RSUs outstanding beginning balance8,141,664 7,172,472
Anti-dilution adjustments719,968
Granted5,335,010 1,234,514 7,172,472
Forfeited(472,542)(265,322)
Number of RSUs oustanding ending balance13,724,100 8,141,664 7,172,472
Expected to vest as of December 3110,318,030 5,797,563 4,583,524
Share-based Compensation Plans | Tencent Holdings Limited
Disclosure of Share-based Compensation [Line Items]
Number of RSUs outstanding beginning balance430,418 731,814 797,355
Granted24,503 222,800
Forfeited(4,718)(9,013)(1,707)
Number of RSUs oustanding ending balance187,948 430,418 731,814
Expected to vest as of December 31166,321 361,943 658,633
Vested and transferred(237,752)(316,886)(286,634)

Other Payables and Accruals - S

Other Payables and Accruals - Summary of Other Payables and Accruals (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Non-current liabilities
Investment payables ¥ 169
Contingent consideration (Note 24)32
Government grants13 ¥ 21
Deferred revenue (Note 23)27
Other non-current payables241 21
Current liabilities
Dividend payable12 31
Accrued expenses (note)1,467 752
Advances from customers106 69
Investment payables389 303
Contingent consideration (Note 24)31
Other tax liabilities103 37
Present value of liability of puttable shares494
Other deposits71 40
Others69 80
Other payables and accruals ¥ 2,742 ¥ 1,312

Deferred Revenue - Summary of C

Deferred Revenue - Summary of Contract Liabilities (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Contract Liabilities [Abstract]
Non-current ¥ 27
Current1,431 ¥ 978
Contract liabilities ¥ 1,458 ¥ 978

Deferred Revenue - Additional I

Deferred Revenue - Additional Information (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Carried Forward Contract Liabilities
Disclosure Of Contract Liabilities [Line Items]
Revenue recognized ¥ 978 ¥ 372 ¥ 126

Business Combination - Addition

Business Combination - Additional Information (Details) ¥ in Millions1 Months Ended6 Months Ended
Oct. 31, 2018CNY (¥)Oct. 31, 2017CNY (¥)sharesDec. 31, 2016CNY (¥)Jul. 12, 2016CNY (¥)
CMC Music Business
Disclosure Of Business Combinations [Line Items]
Consideration amount deemed ¥ 17,999
Revenue before income tax ¥ 2,474
Profit before income tax ¥ 731
Ultimate Music Inc
Disclosure Of Business Combinations [Line Items]
Consideration amount deemed ¥ 463
Name of acquireeUltimate Music Inc.
Number of shares outstanding in business combination100.00%
Aggregate cash consideration ¥ 26
Installment period4 years
Shares subscribed under purchase agreement | shares26,543,339
Music Content Company
Disclosure Of Business Combinations [Line Items]
Name of acquireemusic contents production company
Maximum variable consideration ¥ 400
Variable consideration, fair value ¥ 63

Business Combination - Summary

Business Combination - Summary of Consideration Transferred and Amount of Identified Assets Acquired and Liabilities Assumed (Details) - CNY (¥) ¥ in MillionsOct. 31, 2017Jul. 12, 2016
CMC Music Business
Disclosure Of Business Combinations [Line Items]
Consideration amount deemed ¥ 17,999
Fair value of non-controlling interest6
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents676
Short-term investments632
Accounts and other receivables207
Intangible assets acquired in business combinations2,213
Available-for-sale financial assets10
Property, equipment and software96
Prepayments, deposits and other assets744
Dividend payable(1,251)
Other payables, accruals and other current liabilities(640)
Deferred revenue(26)
Deferred tax liabilities(383)
Other liabilities(35)
Goodwill ¥ 15,762
Ultimate Music Inc
Disclosure Of Business Combinations [Line Items]
Consideration amount deemed ¥ 463
Fair value of non-controlling interest72
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents33
Accounts and other receivables9
Intangible assets acquired in business combinations24
Prepayments, deposits and other assets21
Other payables, accruals and other current liabilities(41)
Deferred revenue(1)
Deferred tax liabilities(10)
Goodwill500
Identifiable assets acquired (liabilities assumed) ¥ 535

Business Combination - Summar_2

Business Combination - Summary of Groups Proforma Financial Performance (Details) - CNY (¥) ¥ in Millions6 Months Ended12 Months Ended
Dec. 31, 2016Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Business Combinations [Line Items]
Total revenues ¥ 18,985 ¥ 10,981 ¥ 4,361
Gross profit7,277 3,810 1,232
Income from operations2,039 1,593 103
Profit before income tax expense2,003 1,597 114
Profit for the year1,832 1,319 85
Online Music Services
Disclosure Of Business Combinations [Line Items]
Total revenues5,536 3,149 2,144
Social Entertainment Services And Others
Disclosure Of Business Combinations [Line Items]
Total revenues ¥ 13,449 ¥ 7,832 ¥ 2,217
CMC Music Business
Disclosure Of Business Combinations [Line Items]
Total revenues ¥ 6,143
Gross profit1,728
Income from operations58
Profit before income tax expense73
Profit for the year41
CMC Music Business | Online Music Services
Disclosure Of Business Combinations [Line Items]
Total revenues2,417
CMC Music Business | Social Entertainment Services And Others
Disclosure Of Business Combinations [Line Items]
Total revenues ¥ 3,726

Business Combination - Summar_3

Business Combination - Summary of Amount of Identified Assets Acquired and Liabilities Assumed (Details) - Music Content Company ¥ in MillionsOct. 31, 2018CNY (¥)
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents ¥ 68
Accounts and other receivables101
Intangible assets acquired in business combinations297
Prepayments, deposits and other assets162
Deferred revenue(18)
Other payables, accruals and other current liabilities(57)
Deferred tax liabilities(105)
Goodwill798
Identifiable assets acquired (liabilities assumed) ¥ 1,246

Acquisition of Subsidiaries A_2

Acquisition of Subsidiaries Accounted for As Business Combination Under Common Control - Additional Information (Details) ¥ in Millions, $ in MillionsSep. 01, 2018CNY (¥)sharesSep. 01, 2018USD ($)shares
Disclosure Of Business Combinations [Line Items]
Cash consideration for disposal ¥ 1,027 $ 151
Number of share options granted to employee to replace outstanding share options | shares460,724 460,724
Associates | UEC
Disclosure Of Business Combinations [Line Items]
Number of shares held by Associate as consideration | shares12,781,204
Cash and cash equivalents acquired ¥ 397
Accounts receivable acquired39
Accounts payable acquired16
Other payables and accruals acquired34
Other net assets acquired20
Fair value of non-controlling interest ¥ 22
Associates | Other Shareholders
Disclosure Of Business Combinations [Line Items]
Number of shares held by Associate as consideration | shares10,302,804

Cash Flow Information - Summary

Cash Flow Information - Summary of Cash Generated from Operations (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Cash Flows From Used In Operating Activities [Abstract]
Profit before income tax expense ¥ 2,003 ¥ 1,597 ¥ 114
Adjustments for:
Depreciation and amortization369 379 236
Impairment provision for investments in associates (Note 6)2 2
Provision for doubtful accounts (Note 17)3 6 7
Non-cash employee benefits expense – share based payments (Note 7)487 362 170
Non-cash share-based payments arising from issues of ordinary shares to music label partners(Note 19(iv))1,519
Fair value losses on other investments30
Net (gains)/losses in relation to equity investments20 (72)(4)
Share of (profit)/loss of associates and joint ventures (Note 13)1 (4)(11)
Interest income(282)(93)(32)
Fair value change on puttable shares35
Net exchange differences (Note 6)31 (18)23
Increase in accounts receivable(182)(447)(266)
Increase in inventories(4)(16)(11)
Increase/(decrease) in other operating assets(789)(137)193
Increase in accounts payables780 4 315
Increase in other operating liabilities1,581 1,051 174
Cash generated from operations ¥ 5,604 ¥ 2,614 ¥ 908

Cash Flow Information - Summa_2

Cash Flow Information - Summary of Non-cash Investing and Financing Activities (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Statement Of Non Cash Investing And Financing Activities [Abstract]
Issuance of ordinary shares to music label partners ¥ 1,519
Issuance of ordinary shares for business combinations ¥ 17,999
Issuance of ordinary shares for equity investments ¥ 1,027 ¥ 7,547
Distribution to Tencent(3,774)
Other payable for business combinations277
Issuing restricted shares for business combinations149
Settlement of dividend by issuance of shares58 138
Other receivables from disposal of long term investments16
Other payable for acquisition of investments in Joint ventures ¥ 46
Insurance of ordinary shares for licensing of contents ¥ 30

Financial Instruments by Cate_3

Financial Instruments by Category - Summary of Financial Instruments by Category (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Jan. 01, 2018Dec. 31, 2017
Disclosure Of Financial Instruments [Line Items]
Financial assets ¥ 10,208
Financial liabilities1,832
Accounts Payable
Disclosure Of Financial Instruments [Line Items]
Financial liabilities1,045
Other Payables And Accruals
Disclosure Of Financial Instruments [Line Items]
Financial liabilities787
Trade Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets1,161
Other Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets133
Financial Assets Available-for-sale, Category
Disclosure Of Financial Instruments [Line Items]
Financial assets3,740
Cash And Cash Equivalent
Disclosure Of Financial Instruments [Line Items]
Financial assets5,174
IFRS9
Disclosure Of Financial Instruments [Line Items]
Financial assets ¥ 22,506
Other investments256 ¥ 10
Financial assets at fair value through other comprehensive income3,331
Financial liabilities3,732
IFRS9 | Accounts Payable
Disclosure Of Financial Instruments [Line Items]
Financial liabilities1,830
IFRS9 | Other Payables And Accruals
Disclosure Of Financial Instruments [Line Items]
Financial liabilities1,902
IFRS9 | Trade Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets1,483
IFRS9 | Other Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets80
IFRS9 | Cash And Cash Equivalent
Disclosure Of Financial Instruments [Line Items]
Financial assets17,356
Loans and Receivables Category
Disclosure Of Financial Instruments [Line Items]
Financial assets6,468
Loans and Receivables Category | Trade Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets1,161
Loans and Receivables Category | Other Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets133
Loans and Receivables Category | Cash And Cash Equivalent
Disclosure Of Financial Instruments [Line Items]
Financial assets5,174
Loans and Receivables Category | IFRS9
Disclosure Of Financial Instruments [Line Items]
Financial assets18,919
Loans and Receivables Category | IFRS9 | Trade Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets1,483
Loans and Receivables Category | IFRS9 | Other Receivables
Disclosure Of Financial Instruments [Line Items]
Financial assets80
Loans and Receivables Category | IFRS9 | Cash And Cash Equivalent
Disclosure Of Financial Instruments [Line Items]
Financial assets17,356
Other Investments | IFRS9
Disclosure Of Financial Instruments [Line Items]
Financial assets256
Other investments256
Financial Assets at Fair Value Through Other Comprehensive Income | IFRS9
Disclosure Of Financial Instruments [Line Items]
Financial assets3,331
Financial assets at fair value through other comprehensive income ¥ 3,331
Available for Sale Financial Assets
Disclosure Of Financial Instruments [Line Items]
Financial assets3,740
Available for Sale Financial Assets | Financial Assets Available-for-sale, Category
Disclosure Of Financial Instruments [Line Items]
Financial assets ¥ 3,740

Commitments - Summary of Future

Commitments - Summary of Future Minimum Commitments for Non Cancellable Operating Leases (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Disclosure Of Future Minimum Commitments For Non Cancellable Operating Lease [Line Items]
Future minimum commitments for non-cancellable operating leases ¥ 305 ¥ 105
Not later than one year [member]
Disclosure Of Future Minimum Commitments For Non Cancellable Operating Lease [Line Items]
Future minimum commitments for non-cancellable operating leases212 61
Later than one year and not later than five years [member]
Disclosure Of Future Minimum Commitments For Non Cancellable Operating Lease [Line Items]
Future minimum commitments for non-cancellable operating leases ¥ 93 ¥ 44

Commitments - Summary of Minimu

Commitments - Summary of Minimum Royalty Payments Under Licensing Agreement (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Disclosure Of Minimum Royalty Payments [Line Items]
Minimum royalty payments under licensing agreement ¥ 5,885 ¥ 4,923
Not later than one year [member]
Disclosure Of Minimum Royalty Payments [Line Items]
Minimum royalty payments under licensing agreement3,599 1,821
Later than one year and not later than five years [member]
Disclosure Of Minimum Royalty Payments [Line Items]
Minimum royalty payments under licensing agreement2,284 ¥ 3,102
More than five years [Member]
Disclosure Of Minimum Royalty Payments [Line Items]
Minimum royalty payments under licensing agreement ¥ 2

Commitments - Additional Inform

Commitments - Additional Information (Details) - CNY (¥) ¥ in MillionsDec. 31, 2018Dec. 31, 2017
Disclosure Of Minimum Royalty Payments [Abstract]
Capital commitments ¥ 1 ¥ 4
Investment commitments ¥ 94 ¥ 52

Related Party Transactions - Su

Related Party Transactions - Summary of Major Related Parties and Relationships with the Group (Details)12 Months Ended
Dec. 31, 2018
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesRelationship with the Group
TencentGroup [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesThe Company’s principal owner
Beijing Quku Technology Co., Ltd
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesThe Company’s associate
Beijing Tianhaoshengshi Music Cultural Ltd
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesThe Company’s associate
Nanjing Jiyun Cultural Development Ltd. [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesThe Company’s associate, before May 31, 2018
UEC and Its Subsidiaries [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Name of related partiesThe Company’s associate, before August 31, 2018

Related Party Transactions - _2

Related Party Transactions - Summary of Significant Related Party Transaction (Details) - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Transactions Between Related Parties [Line Items]
Operation expenses recharged by Tencent Group ¥ 3,972 ¥ 2,434 ¥ 1,148
Promotion and advertising expenses1,511 660 193
TencentGroup [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Operation expenses recharged by Tencent Group589 493 428
Promotion and advertising expenses207 187 151
TencentGroup [Member] | Online Music Services
Disclosure Of Transactions Between Related Parties [Line Items]
Online music services to Tencent Group51 33 90
TencentGroup [Member] | Online Music Services to Associates of Tencent Group [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Online music services to Tencent Group18
TencentGroup [Member] | Social Entertainment Services and Others to The Company’s Associates and Associates of Tencent Group [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Online music services to Tencent Group63 20 15
Associates
Disclosure Of Transactions Between Related Parties [Line Items]
Content royalties to the Company’s associates and associates of Tencent Group88 ¥ 45 ¥ 18
Other channel cost to associates of Tencent Group ¥ 14

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Detail) - CNY (¥)12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Transactions Between Related Parties [Line Items]
Accounts receivables ¥ 0 ¥ 0 ¥ 0
TencentGroup [Member]
Disclosure Of Transactions Between Related Parties [Line Items]
Accounts receivables971,000,000 651,000,000
Revenue recognized ¥ 0 ¥ 0

Related Party Transactions - _3

Related Party Transactions - Summary of Balances with Related Parties (Details) - CNY (¥)Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Balances With Related Parties [Line Items]
Tencent Group and associates ¥ 0 ¥ 0 ¥ 0
Others69,000,000 80,000,000
TencentGroup [Member]
Disclosure Of Balances With Related Parties [Line Items]
Tencent Group and associates971,000,000 651,000,000
Tencent Group and associates28,000,000 59,000,000
Tencent Group and associates529,000,000 104,000,000
Others135,000,000 59,000,000
The Company's Associates and Associates of Tencent Group [Member]
Disclosure Of Balances With Related Parties [Line Items]
Tencent Group and associates39,000,000 8,000,000
Tencent Group and associates16,000,000 26,000,000
Associates
Disclosure Of Balances With Related Parties [Line Items]
Tencent Group and associates ¥ 1,000,000 ¥ 5,000,000

Related Party Transactions - _4

Related Party Transactions - Summary of Key Management Personnel Compensation (Details) - Key Management Personnel of Entity or Parent - CNY (¥) ¥ in Millions12 Months Ended
Dec. 31, 2018Dec. 31, 2017Dec. 31, 2016
Disclosure Of Transactions Between Related Parties [Line Items]
Short-term employee benefits ¥ 64 ¥ 46 ¥ 24
Share-based compensation223 107 54
Key management personnel compensation ¥ 287 ¥ 153 ¥ 78

Contingent Liabilities - Additi

Contingent Liabilities - Additional Information (Details) - Dec. 06, 2018 ¥ in Millions, $ in MillionsCNY (¥)USD ($)
Disclosure Of Contingent Liabilities [Abstract]
Damages amount sought by claimant ¥ 100 $ 14.6