Tencent Declares 2019 Fourth Quarter and Annual Outcomes

HONG KONG, March 18, 2020 /PRNewswire/ — Tencent Holdings Restricted (“Tencent” or the “Firm”, 00700.HK), a number one supplier of Web worth added companies in China, right now introduced the unaudited consolidated outcomes for the fourth quarter of 2019 (“4Q2019”) and audited consolidated outcomes for the 12 months ended December 31, 2019 (“FY2019”).

4Q2019 Key Highlights

Revenues: +25% YoY, non-IFRS^[1] revenue attributable to fairness holders of the Firm: +29% YoY

• Whole revenues have been RMB105,767 million (USD15,161 million^[2]), a rise of 25% over the fourth quarter of 2018 (“YoY”).
• On a non-IFRS foundation, which is meant to replicate core earnings by excluding sure one-time and/or non-cash objects:

–  Working revenue was RMB30,306 million (USD4,344 million), a rise of 35% YoY. Working margin elevated to 29% from 26% final 12 months.
–  Revenue for the quarter was RMB26,639 million (USD3,819 million), a rise of 32% YoY. Internet margin elevated to 25% from 24% final 12 months.
–  Revenue attributable to fairness holders of the Firm for the quarter was RMB25,484 million (USD3,653 million), a rise of 29% YoY.
–  Primary earnings per share have been RMB2.690. Diluted earnings per share have been RMB2.643.

–  Working revenue was RMB28,604 million (USD4,100 million), a rise of 65% YoY. Working margin elevated to 27% from 20% final 12 months.
–  Revenue for the interval was RMB22,372 million (USD3,207 million), a rise of 60% YoY. Internet margin elevated to 21% from 17% final 12 months. 
–  Revenue attributable to fairness holders of the Firm for the quarter was RMB21,582 million (USD3,094 million), a rise of 52% YoY.
–  Primary earnings per share have been RMB2.278. Diluted earnings per share have been RMB2.248.

FY2019 Key Highlights

Revenues: +21% YoY, non-IFRS revenue attributable to fairness holders of the Firm: +22% YoY

• Whole revenues have been RMB377,289 million (USD54,082 million), a rise of 21% over the 12 months ended December 31, 2018 (“YoY”).
• On a non-IFRS foundation, which is meant to replicate core earnings by excluding sure one-time and/or non-cash objects:

–  Working revenue was RMB114,601 million (USD16,427 million), a rise of 24% YoY. Working margin was 30%, broadly steady from final 12 months.
–  Revenue for the 12 months was RMB97,589 million (USD13,989 million), a rise of 22% YoY. Internet margin remained steady at 26%.
–  Revenue attributable to fairness holders of the Firm for the 12 months was RMB94,351 million (USD13,525 million), a rise of 22% YoY.
–  Primary earnings per share have been RMB9.966. Diluted earnings per share have been RMB9.729.

–  Working revenue was RMB118,694 million (USD17,014 million), a rise of 22% YoY. Working margin was 31%, broadly steady from final 12 months.
–  Revenue for the 12 months was RMB95,888 million (USD13,745 million), a rise of 20% YoY. Internet margin decreased to 25% from 26% final 12 months. 
–  Revenue attributable to fairness holders of the Firm for the 12 months was RMB93,310 million (USD13,375 million), a rise of 19% YoY.
–  Primary earnings per share have been RMB9.856. Diluted earnings per share have been RMB9.643.

• The Board has really helpful a last dividend of HKD1.20 per share for FY2019 (2018: HKD1.00 per share), topic to the approval of the shareholders on the Annual Basic Assembly.

Mr. Ma Huateng, Chairman and CEO of Tencent, stated, “Throughout 2019, we bolstered our management in Shopper Web and prolonged our presence in Industrial Web, whereas sustaining wholesome working and monetary metrics. Our communication and social platforms turned more and more vibrant as our Weixin ecosystem higher related customers with companies. Our worldwide sport enterprise broke via to a a lot bigger viewers with the success of titles comparable to PUBG Cell and Name of Obligation Cell. We deepened our fee penetration amongst offline retailers and expanded our vary of wealth administration merchandise. And we have now strengthened our promoting and cloud options, enabling us to higher serve our enterprise clients and so develop our enterprise scale. Amid the COVID-19 state of affairs, we have now labored relentlessly to assist people and serve society, organizing charitable and voluntary actions, enhancing and making extensively obtainable helpful expertise instruments together with WeChat Work, Tencent Assembly app, Tencent Medipedia data service, and Tencent Classroom app, as we search to meet our company mission of Worth for Customers, Tech for Good.”

4Q2019 Monetary Evaluate

Revenues from VAS elevated by 20% YoY to RMB52,308 million. On-line video games revenues rose by 25% YoY to RMB30,286 million. The rise was primarily pushed by income progress from sensible cellphone video games in each home and abroad markets, together with titles comparable to Peacekeeper Elite and PUBG Cell, in addition to income contribution from Supercell titles, partly offset by decrease revenues from PC shopper video games comparable to DnF. Social networks revenues grew by 13% to RMB22,022 million, primarily reflecting higher contributions from digital content material companies comparable to reside broadcast and music streaming companies.

Revenues from FinTech and Enterprise Companies elevated by 39% YoY to RMB29,920 million. The rise was primarily as a result of higher income contributions from industrial fee, in addition to income progress from cloud companies on account of deeper penetration in key verticals.

Revenues from On-line Promoting elevated by 19% YoY to RMB20,225 million. Social and others promoting revenues elevated by 37% to RMB16,274 million, primarily pushed by promoting income progress from Weixin Moments and our cellular promoting community. Media promoting revenues decreased by 24% to RMB3,951 million. The lower primarily mirrored decrease promoting revenues from our media platforms together with Tencent Video and Tencent Information as a result of unsure broadcasting schedules and fewer telecasts of sports activities occasions.

Different Key Monetary Info for 4Q2019

EBITDA was RMB35,675 million, up 31% YoY. Adjusted EBITDA was RMB38,572 million, up 30% YoY.

Capital expenditure was RMB16,869 million, up 270% YoY.

Free money circulate* was RMB37,896 million, up 27% YoY.

As at December 31, 2019, web debt place totalled RMB15,552 million. Honest worth of our stakes in listed investee firms (excluding subsidiaries) totalled RMB419,818 million.

* Ranging from the primary quarter of 2019, we have now reclassified curiosity paid in money circulate presentation from working actions to financing actions to be able to replicate the character of enterprise. Comparative figures have been reclassified to evolve with the present interval presentation.

Working Metrics

Strategic Progress and Outlook

Our key strategic priorities embody cultivating our main place within the Shopper Web, embracing alternatives introduced by the Industrial Web, and energizing our company tradition. Throughout 2019, we imagine we made substantial progress on distinguished facets of our company technique, and we see scope for additional improvement, main us to proceed to evolve our plans as we attempt to sort out new challenges and seize new alternatives. Reviewing a few of our vital product areas and enterprise strains:

Communication and Social

Our strategic focus on this enterprise is strengthening connections between customers through digital content material, on-line companies, and offline companies, in addition to enhancing connections with enterprises leveraging Mini Applications, Weixin Pay and WeChat Work.

In 2019, we offered Weixin customers with handy entry to public companies and healthcare content material. We enriched content material in Mini Applications and information feeds companies in video format and enabled customers to share brief movies through Weishi inside Moments. Weixin and WeChat engagement metrics stayed excessive as their lively person base and person time spent elevated. Day by day messages despatched have been up 15% year-on-year for the fourth quarter of 2019. We rejuvenated QQ with enhanced chat options and buddy suggestion, and we expanded leisure use circumstances through Mini Video games, growing QQ’s reputation amongst youthful generations. For the reason that coronavirus outbreak, QQ Faculty-plus-Residence teams have served greater than 120 million customers, with optimised options comparable to reside broadcast, on-line tutoring applications and on-line administrative instruments for college routines to facilitate on-line and offline schooling. To strengthen our connections with enterprises, we facilitated discovery of retailers’ Mini Applications and gross sales conversion by enhancing Weixin in-app search and reside broadcast features. The variety of every day transactions generated inside Mini Applications greater than doubled year-on-year, and their transaction worth exceeded RMB800 billion in 2019.

Trying ahead, we search to make our customers’ on a regular basis life extra handy via our communication merchandise, to develop the total potential of Mini Applications, and to introduce new social experiences enabled by expertise improvements.

On-line Video games

In our on-line video games enterprise, our strategic focus was on enhancing our inside R&D functionality and exterior partnerships, and increasing our abroad enterprise.

Throughout 2019, we prolonged our China management and made notable progress in our abroad enterprise, largely because of the success of our video games PUBG Cell and Name of Obligation Cell, in addition to the brand new mode Teamfight Techniques inside League of Legends. Our worldwide video games revenues greater than doubled year-on-year, constituting 23% of our on-line video games income within the fourth quarter of 2019. As of the tip of 2019, 5 out of the highest ten most-popular sensible cellphone video games by DAU internationally have been developed by us. Along with establishing our authentic IP franchises, we developed exterior partnerships through plenty of new investments in best-in-genre studios. Key studios comparable to Timi and Lightspeed & Quantum underneath Tencent, in addition to Riot Video games and Supercell, have enhanced their R&D functionality, and every have a number of promising video games in its pipeline. We imagine our studios are business leaders on PC and sensible cellphone video games, and in genres comparable to multi-player battle area and tactical match, however nonetheless have room to boost our capabilities in different genres comparable to role-playing video games. Leveraging our flagship video games franchises, we strengthened our eSports international management with League of Legend’s World Championship and Honour of Kings’ KPL, which have been probably the most watched occasions for PC and sensible cellphone video games, respectively.

Trying ahead, we are going to search to increase our home sport business management, reinforce our worldwide efforts, and supply top quality new video games globally.

Digital Content material

In digital content material, we concentrate on investing in digital content material and rising our subscription enterprise, and lengthening our franchise in lengthy type video to brief type video.

In 2019, our fee-based VAS subscriptions elevated 12% year-on-year to 180 million. We skilled slower subscriber and income progress for our video subscription service in 2019 than 2018, reflecting delays in broadcasting key content material; nevertheless our Tencent Video subscriptions reached 106 million, and we remained the clear business chief by way of content material, customers, and monetary metrics, lowering our 2019 working loss to under RMB3 billion, considerably decrease than the loss charges of business friends. We’re more and more expert at commissioning and creating in-house content material, particularly in areas comparable to drama collection, anime collection, and selection reveals. Now we have prolonged our owned IP, comparable to Pleasure of Life (慶餘年), from on-line novels into profitable TV drama collection. We accelerated our music subscriber progress within the second half of 2019, benefitting from the pay-for-streaming mannequin. Our literature subscriber progress was weak for a lot of 2019 as a result of competitors from free studying companies, however we’re seeing indicators of enchancment, as our Weixin Studying app turns into extra widespread, and as readers differentiate the commonly increased high quality of paid content material.

Throughout 2019, we have now aggressively stepped up our funding within the brief type video area, given customers are spending substantial time watching such movies. Because of our efforts, our brief video app Weishi elevated its DAU 80% and every day uploads 70% sequentially within the fourth quarter of 2019. We enhanced our video content material recognition expertise to boost person content material creation and make smarter content material suggestions. We added progressive options comparable to video crimson packets to spice up social video uploads and leveraged in-house IPs to help content material creation by key opinion leaders (KOLs) and multi-channel networks (MCNs). We’re within the early levels of what we count on to be a multi-year funding briefly type video, however the truth that we overcame a late begin in lengthy type video to turn into the business’s chief, along with our capacity to leverage our social community and media properties, and our substantial progress in latest months, provides us confidence in our long run prospects briefly type video.

On-line Promoting

In promoting, we search to boost our person concentrating on functionality to extend ROIs (return on investments) for advertisers.

Throughout the first half of 2019, weak macro-economic circumstances and competitors for promoting spending negatively impacted our promoting enterprise. Nevertheless, the unification of our promoting expertise and gross sales groups, enhanced person concentrating on, in addition to simplified inventories and advertiser instruments enabled us to re-establish enterprise momentum from the second half of 2019 in our core “social and others” promoting class, which accounted for the big majority of our complete promoting income within the fourth quarter of 2019. Particularly, we prolonged the utmost variety of advert impressions per person day in Weixin Moments from two to a few in early 2019, and efficiently examined a fourth impression in late 2019. Leveraging our information and expertise, we imagine we have now taken substantial market share in advert networks, the place we have now skilled strong income progress, and improved working margin. Our media promoting enterprise was damage by delays in broadcasting sure drama collection and fewer promoting actions round NBA basketball video games.

Trying ahead, we imagine our aggressive place in promoting has notably improved, and, regardless of business challenges, we enter 2020 with the fitting workforce and expertise to boost advertiser ROIs and improve our promoting market share, whereas persevering with to supply interesting client experiences. 

FinTech

In FinTech, we try to drive fee innovation, add fee use circumstances, and broaden our wealth administration portfolio.

Throughout 2019, we strengthened our management in cellular fee companies via deepening our penetration amongst offline retailers. Within the fourth quarter of 2019, we exceeded 1 billion every day common transactions for our industrial funds, lined over 800 million month-to-month lively customers, and labored with over 50 million month-to-month lively retailers. We launched Weixin Pay Scores which enhanced customers’ buy propensity and loyalty to retailers via options comparable to waiving creditworthy customers their deposits on some rental use circumstances. Our wealth administration platform, LiCaiTong, elevated its mixture buyer property over 50% year-on-year, whereas its variety of clients greater than doubled year-on-year as we expanded into the mass market. Our affiliate WeBank quickly grew the mortgage balances of its micro-loan product, WeiLiDai, inside Weixin, whereas sustaining a wholesome non-performing mortgage ratio.

Trying ahead, we are going to search to increase our fee use circumstances, present new FinTech services, and improve the underlying capabilities and stability of our platform. 

Cloud and Enterprise Companies

In Cloud and Enterprise Companies, we concentrate on creating custom-made business options, enabling our enterprise companions to higher join with our customers, and helping a variety of industries in digital upgrades.

Our cloud companies revenues exceeded RMB17 billion in 2019, as we persistently outgrew the market. Our variety of paying clients exceeded 1 million, benefitting from enhanced gross sales workforce and deeper partnerships with system integrators. Gross margins improved as we optimized provide chains and expanded enterprise scale. We elevated our market share and gained presence in verticals comparable to Web companies, tourism, municipal companies and industrial sectors, leveraging our client attain to help enterprises of their digital upgrades. The COVID-19 pandemic is delaying clients’ implementation of cloud-related initiatives and can thus negatively impression our near-term cloud companies revenues, however we imagine enterprises will probably be more and more eager to undertake cloud-based options over the long run, to be able to facilitate distant working and distant interactions with their clients.

2020’s COVID-19 pandemic highlights the utility of distant working and distant well being care companies, and we’re in search of to play our half in serving to folks deal with the brand new problem. Tencent Assembly exceeded 10 million DAUs inside two months since its launch in late December 2019, by far the most-used devoted video conferencing app in China. We deepened the mixing between Weixin and WeChat Work to facilitate buyer administration and gross sales conversion, and tens of millions of enterprises used WeChat Work to renew work within the wake of the coronavirus outbreak. Over 300 million Weixin customers have utilized Tencent Well being as an vital entry to real-time pandemic information, on-line session and AI-powered self-diagnosis companies. We offered our medical AI imaging capabilities to help prognosis of coronavirus illness. We additionally supplied dependable {and professional} medical data via Tencent Medipedia, and distributed pandemic-related content material through a number of high-traffic platforms, comparable to Weixin and Tencent Information, attracting over 600 million web page views. Tencent Well being Code turns into probably the most used ePass for verifying well being and journey historical past throughout the outbreak. 900 million customers throughout greater than 300 cities and counties have used our Well being Code because it was obtainable on this February, with a complete of Eight billion visits. Trying ahead, we are going to search to each meet the quick wants for our merchandise caused by the pandemic, and develop our capabilities to anticipate and serve enterprises’ long run calls for because the financial system digitizes.

Environmental, Social and Governance (“ESG”) Initiatives

We made notable progress on our ESG efficiency in 2019. We inaugurated an Xplorer Prize to help basic science and cutting-edge expertise analysis. WeCounty Platform, our initiative to facilitate digitalization of China’s rural areas and poverty alleviation, has related 15,000 villages in 29 provinces, serving over 2.5 million villagers on the finish of 2019. We cooperated with famend museums worldwide to advertise cultural inheritance through museum-specific Mini Applications. We improved the power consumption effectivity of our information facilities. We diversified our board of administrators with the inclusion of Professor Ke Yang, who brings her experience in healthcare and medical analysis.

As we entered 2020, we confronted the challenges of the coronavirus pandemic, which has profoundly impacted the worldwide financial system. We responded by establishing a RMB1.5 billion emergency fund to supply aid help and by leveraging our cloud sources and expertise to help pandemic-related program improvement and medical analysis. Our groups have labored relentlessly to improve our capabilities and merchandise to replace the general public with authoritative information and knowledge associated to the pandemic, and to supply healthcare companies, companies and academic institutions with entry to distant office and collaborative instruments. We additionally cooperated with Dr. Zhong Nanshan to fund his coronavirus analysis and offered our medical AI imaging capabilities to help creating a fast take a look at for COVID-19. We imagine these efforts embody our mission, “Worth for Customers, Tech for Good”.

For different detailed disclosure, please discuss with our web site http://www.tencent.com/en-us/buyers.html, or comply with us through Weixin Official Account (Weixin ID: Tencent_IR)

About Tencent

Tencent makes use of expertise to counterpoint the lives of Web customers.

Our communication and social platforms, Weixin and QQ, join customers with one another and with digital content material and companies, each on-line and offline, making their lives extra handy. Our focused promoting platform helps advertisers attain out to a whole lot of tens of millions of customers in China. Our FinTech and enterprise companies help our companions’ enterprise progress and help their digital improve.

Tencent invests closely in expertise and technological innovation, actively selling the event of the Web business. Tencent was based in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) are listed on the Essential Board of the Inventory Change of Hong Kong.

For investor and media enquiries, please contact:

Non-IFRS Monetary Measures

To complement the consolidated outcomes of the Group ready in accordance with IFRS, sure extra non-IFRS monetary measures (by way of working revenue, working margin, revenue for the interval, web margin, revenue attributable to fairness holders of the Firm, fundamental EPS and diluted EPS), have been offered on this press launch. These unaudited non-IFRS monetary measures ought to be thought-about along with, not as an alternative to, measures of the Group’s monetary efficiency ready in accordance with IFRS. As well as, these non-IFRS monetary measures could also be outlined otherwise from related phrases utilized by different firms.

The Firm’s administration believes that the non-IFRS monetary measures present buyers with helpful supplementary data to evaluate the efficiency of the Group’s core operations by excluding sure non-cash objects and sure impression of M&A transactions. As well as, non-IFRS changes embody related non-IFRS changes for the Group’s main associates based mostly on obtainable printed financials of the related main associates, or estimates made by the Firm’s administration based mostly on obtainable data, sure expectations, assumptions and premises.

Ahead-Trying Statements

This press launch incorporates forward-looking statements regarding the enterprise outlook, forecast enterprise plans and progress methods of the Firm. These forward-looking statements are based mostly on data presently obtainable to the Firm and are acknowledged herein on the idea of the outlook on the time of this press launch. They’re based mostly on sure expectations, assumptions and premises, a few of that are subjective or past our management. These forward-looking statements could show to be incorrect and will not be realised in future. Underlying the forward-looking statements is a lot of dangers and uncertainties. Additional data relating to these dangers and uncertainties is included in our different public disclosure paperwork on our company web site.

SOURCE Tencent Holdings Restricted

Associated Hyperlinks

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