Tencent Holdings Ltd · HKEX:700
Tencent — Q1 2024 Earnings Presentation
23 slides from Tencent's earnings presentation, May 14, 2024
Slide 1: 2024 First Quarter Results Presentation
2024 First Quarter Results Presentation May 14, 2024
Slide 2: Cautionary Note
Cautionary Note This presentation may contain forward-looking statements relating to the forecasts, targets, outlook, estimates of financial performance, opportunities, challenges, business developments, business plans and growth strategies of Tencent Holdings Limited (the “Company” or “Tencent”) an
Slide 3: 1. Overview
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Slide 4: Financial Highlights
Financial Highlights In billion RMB 1Q2024 1Q2023 YoY 4Q2023 QoQ Total Revenue 159.5 150.0 +6% 155.2 +3% Value-added Services 78.6 79.3 -0.9% 69.1 +14% Social Networks 30.5 31.0 -2% 28.2 +8% Domestic Games 34.5 35.1 -2% 27.0 +28% International Games 13.6 13.2 +3% 13.9 -3% Online Advertising 26.5 21.
Slide 5: Key Services Update
Key Services Update Weixin & WeChat • #1 mobile community China • MAU at 1,359m • #1 by users and QQ revenue Games • Mobile devices MAU at Global 553m • #1 by revenue Mobile Payment Premium Content Digital • #1 by MAU & DAU FinTech • #1 by paid Content subscriptions including video, music, literatur
Slide 6: 2. Business Review
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Slide 7: Revenue
Revenue Revenue Growth (YoY %) +25% +20% +13% +8% +0.1% -3% -2% +0.5% +11% +11% +10% +7% +6% Revenue by Segment (billion RMB) 159.5 154.6 155.2 1% 150.0 149.2 1% 1% 142.4 144.2 145.0 1% 1% 138.3 140.1 1% 135.3 1% 2% 135.5 134.0 1% 1% 1% 1% 1% 33% 32% 34% 35% 32% 30% 33% 32% 33% 29% 30% 32% 32% 17% 1
Slide 8: Gross Profit
Gross Profit Gross Profit Growth (YoY %) +19% +18% +11% -2% -9% -8% -1% +7% +19% +22% +23% +25% +23% Gross Profit by Segment (billion RMB) 83.9 76.5 77.6 70.8 68.2 28% 62.6 62.7 62.7 62.0 61.9 28% 31% 57.8 57.1 57.9 26% 24% 20% 21% 20% 24% 26% 24% 17% 22% 24% 17% 13% 17% 16% 17% 22% 18% 16% 16% 12%
Slide 9: Value-added Services
Value-added Services In billion RMB Social Networks • Revenue was down 2% YoY. Revenue from music and video subscriptions, -0.9% +14% Video Accounts live streaming service and mini games increased, while YoY QoQ revenue from music- and games-related live streaming services declined sharply 79.3 78.6
Slide 10: Communications & Social Networks
Communications & Social Networks • Enable creators to share insights under their own accounts with interested followers • Page views resumed healthy YoY growth, a as AI-powered recommendation algorithms allow us to provide Official Accounts targeted high-quality content more effectively • Facilitate
Slide 11: Domestic Games
Domestic Games Top two flagship games gross receipts declined YoY, recovering in March • Gross receipts of HoK in 1Q24 declined YoY due to high base during CNY 2023, but were well above the level in 1Q22 • Gross receipts of Peacekeeper Elite declined YoY due to weak monetisable content • However, gr
Slide 12: International Games
International Games PUBG MOBILE Brawl Stars Warframe • Average DAU and gross receipts grew • Average DAU more than doubled • Gross receipts grew over 70% YoY by double-digit % YoY in 1Q24 due to YoY and gross receipts more than to new high in 1Q24 popular new modes and featured quadrupled YoY in 1Q2
Slide 13: Online Advertising
Online Advertising In billion RMB Overall +26% -11% YoY QoQ • Revenue grew 26% YoY, benefitting from increased engagement and AI- powered ad targeting • Ad spend from all major categories except automotive increased YoY, particularly from games, internet services and consumer goods • Upgraded ad tec
Slide 14: FinTech and Business Services
FinTech and Business Services In billion RMB FinTech Services • Revenue slowed to single-digit YoY growth rate +7% YoY -4% QoQ • Commercial payment growth moderated due to slow offline consumption spending • Withdrawal fee revenue decreased YoY as consumers are increasingly funding commercial transa
Slide 15: 3. Financial Review
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Slide 16: Income Statement
Income Statement In billion RMB 1Q2024 1Q2023 YoY 4Q2023 QoQ Revenue 159.5 150.0 +6% 155.2 +3% COPS (75.6) (81.8) -8% (77.6) -3% Gross profit 83.9 68.2 +23% 77.6 +8% Operating expenses (32.3) (31.6) +2% (38.2) -15% Other gains, net1 1.0 1.4 -32% 2.0 -48% Operating profit1 52.6 38.0 +38% 41.4 +27% Ne
Slide 17: Non-IFRS Adjustments
Non-IFRS Adjustments Net (gains)/ Amortisation IFRS losses from Impairment Non-IFRS In billion RMB SBC of intangible SSV & CPP3 Tax effects YoY change QoQ change 1Q2024 investee provisions2 1Q2024 assets companies1 Operating profit 52.6 4.7 - 1.2 - 0.1 - 58.6 +30% +19% Net profit 42.7 6.2 (1.5) 2.8
Slide 18: Gross Margins
Gross Margins 52.6 49.5 50.0 46.3 47.5 45.4 44.1 44.2 45.5 42.1 43.2 42.6 40.1 Overall Gross Margin (%) 55.5 57.3 55.1 53.9 54.0 53.7 52.9 53.0 51.7 50.4 50.6 49.8 48.7 Value-added Services (%) 56.8 54.8 52.3 48.8 46.4 46.3 48.9 45.1 42.7 44.2 40.6 41.7 36.7 Online Advertising (%) 43.9 45.6 38.4 40.
Slide 19: Operating Expenses
Operating Expenses S&M R&D G&A (excl. R&D) in billion RMB in billion RMB in billion RMB +7% -31% +3% -5% -3% -15% YoY QoQ YoY QoQ YoY QoQ 11.0 16.4 15.2 15.7 15.7 10.8 9.4 9.1 9.1 7.0 7.5 7.5 1Q23 1Q24 4Q23 1Q24 1Q23 1Q24 4Q23 1Q24 1Q23 1Q24 4Q23 1Q24 Non-IFRS Non-IFRS Non-IFRS 1Q24 G&A (excl. R&D)
Slide 20: Non-IFRS Margin Ratios
Non-IFRS Margin Ratios 36.8 33.4 31.4 30.9 31.7 30.0 28.9 27.3 27.3 25.6 25.2 25.1 21.7 Non-IFRS Operating Margin (%) 32.2 29.6 28.2 25.5 25.4 25.9 22.8 23.8 21.6 22.3 21.1 19.4 17.9 Non-IFRS Net Margin (%) 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 20
Slide 21: CAPEX, FCF and Cash Position
CAPEX, FCF and Cash Position In billion RMB 1Q2024 1Q2023 YoY 4Q2023 QoQ Operating CAPEX 6.6 1.0 +557% 6.7 -1% Non-operating CAPEX 7.8 3.4 +127% 0.8 +832% Total CAPEX 14.4 4.4 +226% 7.5 91% Operating Cash Flow 72.3 62.3 +16% 54.0 +34% Less: CAPEX Paid (15.2) (4.6) +229% (9.3) +62% Payments for media
Slide 22: 1. Overview
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Slide 23: Thank you!
Tencent Holdings Limited 2024 First Quarter Results Presentation Thank you! https://www.tencent.com/ir