SM Entertainment and Tencent Music Entertainment Group have a Beijing company now. It is called STE. Super Junior-M’s Zhoumi is CEO. The pitch is tidy: cast a new Chinese idol group for a debut in two to three years, run its China management after that, and take exclusive Greater China work for NCT DREAM’s Renjun and WayV’s Yangyang and Xiaojun.
The announcement landed on August 27, 2026, after an MOU the two firms signed in May 2025. TME already runs QQ Music, Kugou, Kuwo, and WeSing. SM already has aespa, NCT, Super Junior, EXO, Girls’ Generation, Red Velvet, and Riize. On paper this is two catalogs and one streaming empire agreeing to share a building.
On the ground it is something older. SM has been trying to make China work since the late 1990s. It invented the Mandarin subunit. It put Chinese trainees in flagship groups. It watched three EXO members walk out and file lawsuits. Then Seoul hosted THAAD, Beijing froze Hallyu without ever putting the freeze on letterhead, and the live market that used to justify the whole experiment went dark.
STE is SM coming back with a Chinese co-owner, a Chinese CEO who lived the last version of the plan, and a shareholder map that now includes both Kakao and Tencent. That last part is not a footnote. It is the reason this attempt looks different from Super Junior-M.
SM Wrote the China Strategy, Then Had to Watch It Fail
SM was early. The company started pushing into China around 1998, opened a Chinese subsidiary in 2004, and built a joint venture in 2007. While a lot of Korean agencies still treated the mainland as a place that pirated more than it paid, Lee Soo-man bet that Chinese members would do what Japanese promotions had done a decade earlier: make the product feel local enough to buy.
Han Geng joined Super Junior in 2005 as SM’s first Chinese idol. Super Junior-M followed in 2008 — the M stood for Mandarin — with Zhoumi and Henry added to a lineup built to work the Chinese market. Zhang Liyin debuted as a Mandarin-capable soloist. Victoria Song became the face of f(x). Then came the maximal version: EXO, split at debut in 2012 into EXO-K and EXO-M, with Kris Wu, Luhan, Lay Zhang, and Tao as the China engine.
It worked until it didn’t. Han Geng sued in 2009 over a 13-year contract and left. Kris, Luhan, and Tao peeled off EXO between 2014 and 2015 with the same cluster of complaints — length of contract, pay, how Chinese members were managed. Settlements dragged into 2016. SM spun up China studios for Lay and Victoria rather than keep forcing a Seoul-first model on artists who now had bigger rooms at home.
WayV, launched in 2019 under Label V, was the post-lawsuit adjustment: a China-based NCT unit that could be NCT when that was useful and a Chinese group when that was safer. Even that launch sat inside the THAAD freeze. WayV was SM keeping a China bench without being able to tour the country the bench was built for.
Zhoumi surviving all of that is why he is CEO. He has nearly 20 years inside Super Junior-M and later worked as a director at SM’s Chinese subsidiary. SM’s line is that he understands both the K-pop production system and local management. The less polite version: he is one of the few people still standing who was in the room the last time SM tried this.
The Ban Was Never Official. It Still Lasted a Decade.
South Korea agreed in 2016 to host the U.S. THAAD missile defense system. Beijing said the radar could look into Chinese territory. What followed was not a statute titled “No K-pop.” It was an unofficial freeze that cancelled concerts, pulled dramas off platforms, and quietly made Korean acts disappear from variety shows. Lotte Mart got pushed out. Hallyu’s surplus in the relevant accounts roughly halved.
As of 2026 the freeze is still the baseline. AP and others have noted that most South Korean entertainment has stayed locked out of the mainland since 2016–17. Fans fly to Seoul. Agencies talk around the word “ban” because there is nothing to cite. Analysts keep pointing at a second motive underneath the missile dispute: Beijing does not want a foreign idol system setting the taste of Chinese teenagers if it cannot control the feed.
That is the climate STE is walking into. China overtook Germany in 2025 to become the world’s fourth-largest recorded music market, up 20.1 percent year on year, per IFPI. South Korea sat seventh. The money is there. The stage time is not, at least not for a Korean-branded tour bus rolling into Shanghai the way it did before 2016.
A localized Chinese group, managed in Beijing, streamed on TME apps, fronted by a Chinese CEO, is how you try to sell K-pop infrastructure without asking Beijing to applaud a Korean flag. Whether that is enough is a political question wearing an A&R costume.
I will perfectly combine SM’s unrivaled strengths in IP and content production with the unique characteristics of the Greater China market to showcase differentiated content and generate meaningful results as a bridge between the two companies.
Zhoumi, CEO, STE
Kakao Owns the Company. Tencent Bought a Seat.
Kakao and Kakao Entertainment together hold about 40.28 percent of SM, the controlling block that ended HYBE’s 2023 takeover fight. TME became SM’s second-largest shareholder in May 2025 when it bought HYBE’s entire 9.38 percent stake for 243.35 billion won, about $177 million at the time. Tencent already held minority pieces of YG Entertainment and of Kakao itself. Alibaba’s name has floated in the same shareholder conversation.
That structure changes the China move in three ways.
First, STE is not a vendor relationship. TME is both the joint-venture partner and a significant SM owner. The streaming company that will carry the new group also has a vote on the Korean parent. Distribution and equity are the same handshake.
Second, Kakao is a Korean tech conglomerate that already runs Melon. Korean regulators approved the Kakao–SM combination only with conditions meant to stop Melon from starving rival platforms of SM music. Putting Tencent on the cap table next to Kakao means SM’s China strategy is now a conversation among two platform giants, not a founder flying to Beijing with a demo CD. Lee Soo-man’s old “cultural technology” pitch has been replaced by a shareholder committee.
Third, the optics cut both ways. Korean commentary after the HYBE sale asked whether China money was lining up in front of TME because that is the only door back into the mainland. One industry voice put it bluntly: if you do not partner with Tencent Music, China work gets harder. Kakao is still the largest owner. Tencent does not control SM. But Tencent does not need control. Minority stakes plus streaming plus a JV already give it the map.
Co-CEO Dmitry YJ Tak sketched the wider frame in January as part of SM NEXT 3.0: work with TME in China, with True in Thailand, talk to partners in Japan, keep SM’s creative identity while making IP that sounds local. STE is that slide with a company chop on it.
JYP Brought a Survival Show. HYBE Opened an Office. YG Bought Its Own Name Back.
SM is not sneaking into China alone. The difference is what each agency thinks a “China business” is.
JYP moved first in 2026 with a different shape. In February, TME, JYP CHINA, and CJ ENM set up ONECEAD, via NCC Entertainment, to develop and manage artists in Greater China. Its first act already exists: seven-member MODYSSEY, formed on Mnet Plus’s PLANET C: HOME RACE. ONECEAD is also talking music production, live events, and merch. JYP has had Chinese members for years — Fei in miss A, Jackson Wang in GOT7 — and a China-based group in Boy Story. The new vehicle is a three-company production house sitting on a TV-made lineup, not a long-horizon SM-style trainee project with a two-to-three-year clock.
HYBE took the subsidiary route. HYBE China opened in Beijing on April 2, 2025, the company’s fourth overseas branch after Japan, the United States, and Latin America. Officials said the office is there to support existing HYBE artists, not to run a local audition factory. Pledis already had a China unit from 2018. HYBE sold its SM stake to TME the next month. Read that sequence as you like: exit a rival’s register, stand up a Beijing desk, wait for policy to move. It is a lighter, less entangled bet than STE.
YG’s path is quieter and older. Tencent put money into YG in 2016, just before the freeze. In the current thaw-adjacent moment YG has been consolidating YG Entertainment Beijing rather than announcing a flashy new group with TME. Same market, less press release.
TME has been busy beyond the majors. In May 2025 it co-led an $80 million Series B in The Black Label — the studio tied to key tracks on the KPop Demon Hunters soundtrack — in a round Bloomberg had around a $660 million valuation. Tencent’s pattern is consistent: minority stakes, joint ventures, platform leverage. It does not need to buy a Korean agency outright. It needs to be in the room when the China door opens.
What makes STE different from ONECEAD is lineage and control of existing names. SM is handing Greater China management of Renjun, Yangyang, and Xiaojun to the JV and promising “more sophisticated localized promotions.” That is not a new boy group from a survival show. That is SM putting current IP under a Beijing roof. JYP is building forward from a TV finale. HYBE is renting an office. SM is reorganizing the artists it already has and staffing the desk with someone from Super Junior-M.
A New Group in Two to Three Years Is the Real Deadline
STE will run the auditions. STE will manage the group in China after debut. Zhoumi’s quote does the corporate work:
The sentence that matters more is the timetable. Two to three years is long enough for another diplomatic weather change and short enough that SM cannot hide behind “someday.” If the unofficial freeze holds, a Chinese-facing group on TME’s pipes is still a product. If the freeze cracks, STE is already the vehicle for concerts, variety, and the kind of local promo Seoul could not run from a distance.
None of this erases the last twenty years. SM taught the industry that Chinese members open rooms. It also taught the industry that those rooms come with contracts Chinese artists will fight, a state that can shut the lights without a press conference, and a fan public that can turn nationalist overnight — the 2010 Super Junior “Holy War” on Baidu was an early warning, not a one-off.
Kakao’s control means the Korean side of the company is not going anywhere. Tencent’s stake and the JV mean the China side is no longer a satellite office hoping Seoul remembers it exists. Zhoumi is the human hinge between those two facts.
SM has done China as a subunit, as a dual debut, as a China-only NCT branch, and as a set of solo studios for artists who left the group model. STE is China as a jointly owned company with the country’s largest music platform. That is not romance. It is the version of the old plan that assumes the politics will not be kind, and builds the structure anyway.
