Tencents second quarter revenue 114.9 billion yuan, net profit 33.11 billion yuan

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 Tencents second quarter revenue 114.9 billion yuan, net profit 33.11 billion yuan


In accordance with non IFRSs, the impact of certain one-time and / or non cash items is excluded to reflect the performance of the core business:

-The operating profit was 73.204 billion yuan (US $10.34 billion), an increase of 31% over the same period last year; the operating profit margin increased from 32% in the same period of last year to 33%.

-During the period, the profit was 59.204 billion yuan (US $8.363 billion), up 29% year-on-year; the net profit margin increased from 26% in the same period of last year to 27%.

-During the period, the profit attributable to equity holders of the company was RMB 57.232 billion (US $8.084 billion), with a year-on-year increase of 29%.

-The basic profit per share is 6.038 yuan, and the diluted earnings per share is 5.945 yuan.

According to international financial reporting standards:

-During the period, the profit was 61.857 billion yuan (US $8.737 billion), an increase of 18% over the same period of last year; the net profit margin decreased to 28% from 30% in the same period last year.

-During the period, the profit attributable to equity holders of the company was RMB 62.003 billion (US $8.758 billion), with a year-on-year increase of 21%.

-The basic earnings per share was 6.541 yuan. The diluted earnings per share was 6.440 yuan.

-The total cash at the end of the period was 281.086 billion yuan (US $39.704 billion)

Total revenue: 29% year-on-year increase; profit attributable to equity holders of the company under non International Financial Reporting Standards: a year-on-year increase of 28%

The total revenue was 114 billion 883 million yuan (US $16 billion 228 million), an increase of 29% over the second quarter of 2019 (year-on-year).

In accordance with non IFRSs, the impact of certain one-time and / or non cash items is excluded to reflect the performance of the core business:

-The operating profit was 37.629 billion yuan (US $5.315 billion), a year-on-year increase of 38%; and the operating profit margin rose to 33% from 31% in the same period last year.

-During the period, the profit was 31.22 billion yuan (US $4.41 billion), a year-on-year increase of 29%; the net profit margin was 27%, which was the same as the same period last year.

-During the period, the profit attributable to equity holders of the company was RMB 30.153 billion (US $4.259 billion), with a year-on-year increase of 28%.

-The basic profit per share is 3.180 yuan, and the diluted earnings per share is 3.130 yuan.

According to international financial reporting standards:

-The operating profit was 39.311 billion yuan (US $5553 billion), a year-on-year increase of 43%; the operating profit margin increased from 31% in the same period of last year to 34%.

-In the same period of last year, the net profit rate was RMB 324.4 billion, which was equal to that of the same period of last year.

-During the period, the profit attributable to equity holders of the company was RMB 33.107 billion (US $4.676 billion), with a year-on-year increase of 37%.

-The basic profit per share was 3.491 yuan. The diluted profit per share was 3.437 yuan.

Novel coronavirus epidemic has swept the world since the beginning of the year, affecting the daily work and life of people, said Ma Huateng, chairman and chief executive officer of the board. At this time of challenge, Tencent uses its own platform and technology to help users adapt to the new normal through online tools, support the digital upgrading of enterprises, and widely help the economic recovery. In the second quarter, Tencents operating and financial performance remained strong on the whole, reflecting Tencents team persistence and the resilience of its business model. Tencent will continue to invest efficiently in talent, technology and platform, embrace emerging structural opportunities and meet future challenges.

Financial analysis for the second quarter of 2002

Revenue from value-added services increased by 35% year-on-year to RMB 65002 million. Online game revenue increased by 40% to 38.288 billion yuan. The increase was mainly driven by increased revenue from domestic games including peace elite and Kings glory and smartphone games in overseas markets, partly offset by lower revenue from PC client-side games such as dungeons and warriors and across the line of fire. In the second quarter of 2002, the total revenue from smart phone games (including those attributable to Tencents social network business) and PC client-side games were RMB 35.988 billion and RMB 10.912 billion respectively. Social network revenue increased 29% to 26.714 billion yuan. The increase was mainly driven by the contribution of digital content services, including live broadcast services from Huya Inc. (Huya), which has been consolidated as a subsidiary since April 2000), growth in the number of music members and growth in sales revenue of virtual game props.

Revenue from fintech and corporate services increased by 30% year-on-year to 29.862 billion yuan. This growth mainly reflects the growth of business payment income driven by the increase of daily average transaction volume and single transaction amount, the growth of revenue from financial management platform, and the increase of cloud service income due to the increase of public cloud consumption (especially Internet services and livelihood services).

EBITDA was RMB 40.525 billion, up 24% year on year. The adjusted EBITDA was RMB 43.742 billion, with a year-on-year increase of 25%.

Capital expenditure was RMB 9.466 billion, up 117% year on year.

Free cash flow * was 28.451 billion yuan, up 127% year on year.

As at June 30, 2002, the net cash of the company was RMB 7.212 billion. The fair value of Tencents equity in listed investment companies (excluding subsidiaries) totaled 726.244 billion yuan.

Business data

Business Review and Prospect

The novel coronavirus epidemic has swept the world since the beginning of the year, affecting peoples daily work and life. At this time of challenge, Tencent uses its own platform and technology to help users adapt to the new normal through online tools, support the digital upgrading of enterprises, and widely help the economic recovery. The following is the key performance of Tencents main products and businesses:

Communication and social networking

In terms of wechat, Tencent released a version update to enhance its functions in communication, content and services. At the communication level, the latest take a picture function has stimulated a lot of creative interaction, and the new live broadcast function in the wechat home school group also makes online education through wechat more convenient. The number of monthly active accounts and daily average news increased year on year. In content, Tencent upgraded the official accounts video content publishing function, and enhanced the recommendation algorithm and launched content aggregation tools to improve the efficiency of user discovery. These measures have helped to increase the official accounts content consumption and promote the growth of browsing volume. In terms of services, Tencent helps traditional retailers to carry out digital transformation, and assists them to resume business through small programs. With the recovery of economic activity, the volume of transactions generated through small procedures has rebounded on a month on month basis. Tencent has launched a free and easy-to-use small program function small store, which helps long tail businesses to establish and operate online stores, providing merchants with various capabilities such as order management, after-sales service and live broadcast.

In terms of QQ, Tencent has added features that allow users to have better interaction online when they are unable to get together with friends and family. Users can launch online parties and play AI social games with friends in video chat. In order to enrich the content of QQs cartoon and QQs cartoon, we can further enrich the content of QQs cartoon.

network game

In the international market, with the launch of new games and the increase of users use time during the home order period, Tencents monthly active accounts increased significantly year-on-year and month on month. Tencent has released a personal computer game valorant, an immersive team action PC game, a card game Legend of Rune earth across personal computers and smart phones, as well as the agents role-playing mobile gameu300a CODE:DBlood u300bu3002 Valorant has become the worlds most watched game on twitter in the second season, reflecting its immediate appeal to immersive action gamers.

Digital content

Tencents charge value-added service accounts increased by 20% to 203 million, mainly due to the increase in the number of video and music content service members. The number of video service members increased by 18% year-on-year to 114 million, benefiting from home-made Guoman and TV series, such as Douluo mainland Season 3, Longling Grottoes and rumored Chen Qianqian. Traffic to Chinas long video sites (including Tencent video) fell month on month as people returned to work and delayed the broadcast of some famous variety shows and TV series. Thanks to the promotion of popular dramas such as 30, Tencents video traffic has increased after the end of the second quarter, reflecting the resilience of Tencents video platform. Tencent music expanded the content of paid music library, and the number of music service members increased by 52% to 47 million.

online advertising

In order to enhance its long-term competitiveness in the field of effect advertising, Tencent launched an integrated advertising delivery management platform in July. Through this platform, advertisers can put advertisements in all resources of Tencent more efficiently, including Tencents mobile advertising alliance. The new platform will also enhance the efficiency of competition and provide more accurate targeted delivery services for advertisers.

In terms of social interaction and other advertising, WeChat advertising resources (especially friends circle) have promoted the rapid growth of advertising exposure, and the eCPM of mobile advertising alliance has also increased. The reason is that the proportion of video ads in mobile advertising alliance income has increased from the percentage of the number of units in the second quarter of 2019 to more than 40% of the second quarter of 2020. Tencent believes that WeChats ecosystem is redefining Chinas online advertising, so that advertisers can build relationships with users in their private domains, such as official account and small program, so that they can effectively maintain long-term and loyal customer relationships, rather than just single transaction advertising.

In terms of media advertising, revenue fell sharply year-on-year due to weak demand from brand advertisers and delayed production and broadcasting of some variety shows and TV series. Tencent expects that some variety shows and TV series will be broadcast in the second half of 2000.

financial technology

In terms of financing platform business, with more and more users recognizing the convenience of Tencents security and carefully aggregated financial management platform, the number of assets and active customers increased year on year.

The service revenue of cloud and other enterprises recorded year-on-year and month on month growth, mainly driven by the increase of cloud service consumption of Internet companies and customers in the public service field. Under the continuous influence novel coronavirus epidemic situation, the delivery of offline projects has not yet fully recovered in the second quarter, but Tencent has signed major contracts with financial institutions and public service customers, and expanded the business in emerging vertical fields such as medical, education, conferences and exhibitions to help customers achieve digital transformation. In terms of technology and infrastructure, Tencents adoption of customized equipment and the establishment and expansion of its own super large data center will help to improve the performance of Tencent cloud services and optimize the cost in the long run.

Source: Qiao JunJing, editor in charge of Netease science and Technology Report_ NBJ11279