New York-listed Tencent Music Entertainment (TME) share prices have dropped following the Monday release of the company’s unaudited second-quarter financial report — despite a 31% year-on-year growth in revenue.

China’s TME is owned by the broader, Hong Kong-listed Chinese conglomerate Tencent Holdings. The music company is currently in negotiations with French media giant Vivendi for a 10% stake in Universal Media Group, for a potential $3.36 billion.

According to the unaudited Q2 report, TME’s total revenue grew to RMB5.9 billion ($835 million), but it still missed estimates of RMB5.95 billion ($842 million), Reuters cited IBES data from Refinitiv as saying. Net profits only rose 2.5% to RMB9.27 million ($1.3 million).

One cause for investor concern is that the monthly average revenue per user of its social entertainment services — a closely tracked measure of growth — saw its slowest increase since the firm went public last December, rising just 16.5% to RMB130.2 ($18.45), according to Reuters.

Following release of the financial report, TME’s share price dropped by as much as 8% before recovering some ground.

TME runs four out of five of China’s top digital music apps, with more than 90% market penetration, but generates much of its revenue from social entertainment services like Karaoke platform “WeSing” or concert live-streaming platform “Kugou Live.” Such services and platforms brought in RMB4.34 billion ($614 million), the firm said — much more than the online music division, which took in just RMB1.56 billion ($221 million).

While TME says it now has a record 31 million paying users of its online music services, its total monthly active users grew by just 1.2% to 652 million. Monthly average revenue per paying user fell 1.1% to RMB8.6 ($1.22).

Cussion Pang, TME’s CEO, said that 2.6 million paying users had been added sequentially this quarter. In Q2, TME partnered with more music labels and added more content, “including music-centric variety shows, short-form videos and long-form audio such as audio books and podcasts.” It had also done more to produce and distribute original soundtracks, particularly for games, films and TV shows within Tencent’s own ecosystem.

Regarding social entertainment, the firm had broadened its user base “through mini-programs and a lite version app,” and had improved user engagement by adding new social features to existing products.

TME’s chief strategy officer Tony Yip said the company is looking to expand its social entertainment services outside of China, stating that the company is taking “initial steps to explore overseas opportunities for WeSing in Southeast Asia… to expand our reach both at home and abroad.”