Tencent's Q 1 revenue was flat year-on-year, and its net profit declined for three consecutive quarters. Tencent accelerated the integration of figures and facts and increased its investment in R&D.. In the first quarter, Tencent's R&D expenditure reached153.8 billion yuan, a year-on-year increase of 36%. Tencent's Q 1 revenue was flat year-on-year, and its net profit declined for three consecutive quarters.
Tencent Q 1 revenue was flat year-on-year, and its net profit declined for three consecutive quarters 1. In the first quarter, the performance of many companies was affected by the epidemic, and even Tencent's net profit growth rate was lowered a lot.
18 In May, Tencent released its performance report for the first quarter of 2022, achieving revenue of 1354.7 1 billion yuan and non-IFRS of 25.545 billion yuan, down 23% year-on-year. The financial report shows that in the first quarter, Tencent's financial technology and enterprise services sector achieved revenue of 42.768 billion yuan, a year-on-year increase of 10%, accounting for one-third of the revenue, and the real economy sector accounted for an increasing proportion. While the net profit is declining, Tencent's R&D is still growing rapidly.
The monthly active accounts of WeChat and WeChat totaled 65.438+0.29 billion, a year-on-year increase of 3.8%.
Real economy
The financial technology and enterprise service business realized a revenue of 42.8 billion yuan, a year-on-year increase of 65,438+00%. For the second consecutive quarter, the To B business became the pillar of revenue. In the three years of the "930 Reform", Tencent's To B revenue doubled, accounting for 26% to 32%.
In 2022, Tencent continued to increase the research and development of core technologies and built a self-developed product matrix covering chips, operating systems, servers, databases, audio and video, and security. The financial report shows that the company's R&D investment in the first quarter reached 654.38+054 billion yuan, a year-on-year increase of 36%.
According to Gartner report, Tencent Cloud ranks first in China CPaaS market.
In February, Tencent Cloud launched a white paper on ultra-low delay live broadcast technology in the industry, taking the lead in introducing WebRTC technology into the live broadcast field, reducing the live broadcast delay to below 500ms, and the comprehensive quality of service (QoS) far exceeds the standard live broadcast.
At present, Tencent Cloud Audio & Video has 100+ a new generation of international codec patents, and TRTC background architecture technology has won the "China Patent Gold Award", covering 90% of domestic audio & video customers.
In the face of structural changes in the Internet industry, Tencent adhered to service entities, joined more than 9,000 partners, and launched more than 400 industry solutions to meet the digital needs of 30 industries. Since the outbreak, WeChat Pay has continued to reduce fees and profits, and has helped small and micro enterprises through actions such as "Fireworks Plan" and "COVID-19 Guarantee". It is estimated that a number of initiatives will cost more than10 billion yuan.
In terms of financial technology business, since mid-March, 2022, commercial payment transactions have been weak, because some cities in China have experienced epidemic again, which has had a negative impact on the growth of transportation, catering services and clothing payment transactions.
Game business
In the game business sector, tencent games's revenue reached 43.6 billion yuan, of which the game revenue in the international market was 654.38+0.06 billion yuan, a year-on-year increase of 4%; Domestic market revenue was 33 billion yuan, down 65,438+0% year-on-year.
Tencent said in the financial report that the growth of game revenue in the international market in the first quarter of this year was mainly due to the growth of games such as VALORANT and Clash of Tribes, among which VALORANT maintained a strong performance, the user base increased and the willingness to pay increased.
In addition, the Apex mobile game jointly developed by Tencent Photonic Studio Group and Rebirth Studio was officially launched on May 17, hoping to bring a new generation of tactical competitive experience to players around the world. Previously, the number of pre-registered players in official website exceeded160,000.
In the protection of minors, Tencent's "Wisdom, Sports and Flowers" public welfare plan sponsored by Tencent Growth Guardian and jointly launched by tencent games and Tencent Foundation has also made new progress. At present, the "Intellectual and Physical Education" program has promoted the landing of nine future classrooms and six future sports fields. By the end of April, Tencent's Future Class had started 1547, benefiting more than 654.38+million students, many of whom were experiencing the charm of science and technology interest classes for the first time. Shaoguan Station, an online skipping contest held by Tencent Future Sports Ground, was successfully held on June 5438+ 10. Hundreds of primary and secondary schools in the city actively participated, and a total of 3297 teachers and students signed up.
Through the protection measures for minors in leading industries, Tencent's minors' playing time and running water ratio are stable at a very low level. In the future, Tencent will continue to adhere to the purpose of "unblocking and combining" to provide a healthy and clear growth environment for minors.
R&D investment growth
Social network revenue increased by 65,438+0% to RMB 2,965,438+0 billion, reflecting the growth of live video service revenue, but most of it was offset by the decrease of live music and live games revenue.
In the first quarter of 2022, the revenue of online advertising business decreased by 18% to 1800 million yuan year-on-year, reflecting the weak advertising demand in the fields of education, internet services and e-commerce, and the influence of regulatory changes in the online advertising industry itself, which partially offset the stable demand of fast-moving consumer goods industry and the advertising revenue brought about by the merger of sogou.
Social and other advertising revenue decreased by 65,438+05% to 65,438+057 billion yuan, mainly because the advertising business of Mobile advertising alliance adapted to the regulatory impact, resulting in a significant decline in revenue. On the other hand, the subscription list advertisements in the official account of WeChat promoted the growth of its advertising revenue, partially offsetting the decline in the advertising revenue of the alliance. Media advertising revenue decreased by 30% to RMB 2.3 billion, reflecting the decline in advertising revenue of media such as Tencent News and Tencent Video, which was partially offset by advertising revenue of Beijing Winter Olympics in 2022.
The number of paid members of fee-based value-added services increased by 6% to 239 million. Tencent Video has consolidated its leading position in the long video streaming media market by adapting the best-selling comics and novel IP, and currently has 654.38+24 million paid members. In terms of music, thanks to the improvement of high-quality content and users' willingness to pay, the number of paid members has increased to 80 million.
In terms of WeChat, the video number continues to be welcomed by users, and its news, common sense and entertainment content are increasingly rich. Coupled with the improvement of recommended technology, the video playback volume and usage time have increased significantly year-on-year. The number of daily active accounts of applets exceeded 500 million, and the total transaction volume maintained rapid growth, further infiltrating retail, catering and people's livelihood services.
In terms of QQ, it provides more functions for young users to create and share content and keep in touch with friends. A new tool is introduced, which allows users to display their customized super QQ show avatars in short videos they create. Users can also share videos or music they are enjoying with their friends through status updates, so that friends can access and play the same content through small programs in QQ.
The R&D investment of Q 1 was15.383 billion yuan, up 36% year-on-year, and over 25% for five consecutive quarters. By April 2022, Tencent had published more than 56,000 patent applications and authorized more than 26,000 patents in major countries and regions around the world, of which invention patents accounted for more than 90%.
In the first quarter, Tencent implemented cost control measures, adjusted some non-core businesses, and used tools such as applets, Tencent Conference and Enterprise WeChat to help enterprises and consumers in China overcome the new round of epidemic, and continued to invest in strategic growth areas, including enterprise software, video numbers and international market games. Looking into the future, Tencent said that it will focus on key businesses, persist in innovation under various challenges and cyclical changes, and continue to create value for users, partners and the whole society.
Tencent's Q 1 revenue was flat year-on-year, and its net profit declined for three consecutive quarters. 2 Tencent, which is in the "shift", continues to be under pressure.
On May 18, the first quarter report of Tencent was released. In the first quarter of this year, the revenue was135.5 billion yuan, which was flat year-on-year. According to non-international accounting standards, the net profit was 25.55 billion yuan, down 23% year-on-year, falling for three consecutive quarters.
In terms of business segments, the "value-added services" business was the same as the same period of last year, the "online advertising" business decreased by 65,438+08% year-on-year, and the business income of "financial technology and enterprise services" increased by 65,438+00% year-on-year to 42.8 billion yuan, which became the engine of Tencent's steady growth and a highlight in the financial report.
In terms of user data, as of the end of the first quarter of 2022, the combined monthly accounts of WeChat and WeChat were 65.438+28.8 million, up 3.8% year-on-year, and the monthly accounts of QQ mobile terminals were 563 million, down 7% year-on-year; The number of charged value-added service accounts of Tencent was 239 million, up 5.9% year-on-year.
It is worth mentioning that during the performance pain period, Tencent accelerated the integration of data and reality, increased R&D investment, and upgraded from pursuing scale growth to pursuing high-quality growth. In the first quarter, Tencent's R&D expenditure reached 654.38+05.38 billion yuan, up 36% year-on-year, constantly consolidating the technical foundation of serving the real economy.
Ma, Chairman and CEO of Tencent, said that in the face of industry challenges, the company has implemented cost control measures and adjusted some non-core businesses, which will help to achieve a more optimized cost structure in the future. Looking forward to the future, the company will focus on key businesses, persist in innovation under various challenges and periodic changes, and continue to create value for users, partners and the whole society.
At the conference call after the release of the financial report, Tencent executives said that they would take more balanced measures for investment, and it was a very important measure to adjust the previously held shares of JD.COM. For another company, Tencent also reduced its holdings and repurchased it with the proceeds from the reduction. Tencent's investment strategy is still valid, and more macro risks will be analyzed in the future to keep up with the latest trends. "We will focus on risks and manage them effectively. We will further make reasonable investments and consider reducing our holdings to bring better cash flow to the company. "
In addition, for the game sector that the market is more concerned about, Tencent executives said that the approval of the game version number is in good condition at present, and there will be more positive signs in the future. Regulatory factors will promote the further development of the game industry.
The results in the first quarter were lower than expected.
Under the epidemic, Tencent's performance is also under great pressure, which is lower than expected.
The data shows that the revenue in the first quarter was 654.38+0355 billion yuan, almost zero year-on-year. According to non-international accounting standards, the net profit was 25.55 billion yuan, down 23% year-on-year. If we consider the profits attributable to shareholders of Tencent, the decline is even greater, with a net profit of 23.4 billion yuan, down 565.438+0% year-on-year, which is directly "halved".
Then compare the forecast data of brokers in Tencent's quarterly newspaper:
CITIC Securities: Tencent's short-term performance is under pressure and does not change its core value. It is predicted that the company will achieve revenue of 654.38+042.7 billion yuan (up 5.5% year-on-year) and non-IFRS net profit of 26.8 billion yuan (down 654.38+09% year-on-year) in the first quarter.
Guosen Securities: Tencent is expected to achieve revenue of 65.438+040.5 billion yuan in the first quarter, up 3.8% year-on-year, and its net profit under non-IFRSs decreased by 65.438+07.5% year-on-year to 27.3 billion yuan.
CICC: It is predicted that Tencent's revenue in the first quarter will be basically flat at 65.438+0359 billion yuan year-on-year, and its adjusted net profit will drop by 65.438+07% year-on-year to 27.3 billion yuan.
China Merchants Securities: Tencent's revenue in the first quarter of 2022 is expected to reach 654.38+038.584 billion yuan, and its adjusted net profit is expected to reach 286.5438+033 billion yuan.
Shen Wanhongyuan (Hong Kong) predicts that Tencent Holdings will achieve revenue of 654.38+04 billion yuan in the first quarter, up 4% year on year, and net profit of 28.2 billion yuan, down 654.38+05% year on year.
It can be said that compared with the expectations of these head brokers, Tencent's revenue or net profit are lower than expected. Tencent also explained in the financial report that the decline in net profit was due to the overall increase in costs and expenses faster than income, and the net contribution of affiliated companies turned from profit to loss.
The real economy has become a new engine.
Looking at the specific business situation, advertising revenue dropped significantly, and game revenue growth was weak, while financial technology and enterprise service business achieved rapid growth, which became a new support for performance.
In terms of business, the revenue from value-added services including games and videos was 72.74 billion yuan, accounting for 54% of the total revenue; The revenue of online advertising sector was 65.438+0.799 billion yuan, accounting for 65.438+03%, and the revenue of financial technology and enterprise services sector was 42.77 billion yuan, accounting for 32%.
The specific business lines are as follows:
Domestic games: revenue was 33 billion yuan, up 1% year-on-year.
Overseas games: Revenue was 654.38+006 billion yuan, up 4% year-on-year.
Social networking: revenue was 29,654.38 billion yuan, up 1% year-on-year.
Social advertising: revenue was 65.438+0.57 billion yuan, down 654.38+05% year-on-year.
Media advertising: revenue was 2.3 billion yuan, down 30% year-on-year.
Financial technology and corporate services: revenue was 42.8 billion yuan, up 65,438+00% year-on-year.
It is understood that since Tencent's "930 Revolution" on 20 18, the continuous deepening of the industrial Internet is showing results: the revenue share of financial technology and enterprise services sector has increased from 25.5% in the first quarter of 20 19 to 32% disclosed in the first quarter, which not only improved the overall income health, but also contributed a new engine for high-quality development for Tencent.
According to the financial report, although the transaction amount of business payment and corporate service income decreased in March this year due to the epidemic, Tencent took certain cost control measures, including repositioning its IaaS service, shifting from simply pursuing income growth to achieving healthy growth, and actively reducing loss contracts.
In terms of games, in the first quarter, Tencent's game revenue in the local market fell by 65,438+0% to 33 billion yuan. Among them, the revenue growth of recently launched games such as League of Legends and Battle of the Golden Shovel is mostly offset by the decline in the revenue of Tianya Yue Ming Knife Hand Tour and Call of Duty Mobile Tour.
In the international market, tencent games's revenue increased by 4% to 654.38+006 billion yuan, among which the revenue of games such as VALORANT and Clash of Tribes increased, but the revenue of PUBG Mobile decreased. Tencent explained that during the epidemic prevention and control period, the game industry is still in a downward trend.
In the value-added service business, social network revenue increased by 65,438+0% to 296,5438+0 billion yuan, reflecting the growth of video live broadcast service revenue, but most of it was offset by the decrease of music live broadcast and game live broadcast revenue.
At the same time, the revenue of online advertising business in the first quarter decreased by 18% year-on-year to 1800 million yuan. Tencent explained that this is due to the weak advertising demand in industries such as education, Internet services and e-commerce, as well as the impact of regulatory changes in the online advertising industry itself, but the advertising expenditure in the fast-moving consumer goods industry has remained stable.
Among them, social and other advertising revenue decreased by 65,438+05% to 65,438+057 billion yuan, mainly due to the supervision of advertising alliance Tencent's mobile advertising business, and media advertising revenue decreased by 30% to 2.3 billion yuan.
Increase investment in research and development
It is worth noting that Tencent increased its investment in research and development this quarter. In the first quarter of 2022, Tencent's R&D investment maintained a year-on-year growth of 36%, reaching 654.38+05.38 billion yuan.
Tencent believes that the core competitiveness of technology-based enterprises is products and technology. Although it is in the transitional period, the investment in R&D continues to increase, and the underlying capabilities of service entities are also constantly improving. In addition, the R&D investment in the first quarter of 2022 was 654.38+05.38 billion yuan. Since 20 19, its accumulated R&D investment has reached136.5 billion yuan.
At present, Tencent has established a complete self-developed system including servers, operating systems, chips and SaaS, which provides a solid technical foundation for serving the real economy.
By April 2022, Tencent had published more than 56,000 patent applications and authorized more than 26,000 patents in major countries and regions around the world, of which invention patents accounted for more than 90%.
A few days ago, Ma admitted in Tencent's report on sustainable social value that Tencent is facing a new stage of coexistence of challenges and development: on the one hand, the growth rate of income and profits has slowed down; On the other hand, Tencent also believes that it can shift gears to create higher quality development.
Tencent said in the financial report, "Looking ahead, we will focus on key businesses, persist in innovation under various challenges and cyclical changes, and continue to create value for users, partners and the whole society."
Tencent's Q 1 revenue was flat year-on-year, and its net profit declined for three consecutive quarters. After the close of May 18, Tencent released its performance report for the first quarter of 2022, and the overall performance was not optimistic. The financial report shows that Tencent achieved revenue of 13545438+0 billion yuan in the first quarter, which was flat year-on-year and decreased by 6% from the previous quarter. The net profit was 234 13 billion yuan, down 5 1% year-on-year and 75% quarter-on-quarter. Under non-IFRS, the net profit was 25.545 billion yuan, down 23% year-on-year and up 3% quarter-on-quarter.
Zhang Yi, CEO of Ai Media Consulting, told the Securities Daily reporter, "After years of rapid growth, Tencent's net profit fell sharply in the first quarter of this year. This performance is not unexpected, indicating that the company is in a period of performance pain. Previously, Tencent focused on ToC business, including the glory of the king, WeChat and other mobile games.
However, the flow dividend of existing products has peaked. If we want to continue the original business model, we must further expand overseas markets, seek the rapid growth of market share and living water, or continue to increase the research and development of innovative products. In the era of digital economy, ToB business has become a key factor in the breakthrough growth of Internet platform, and Tencent needs to adjust its original business model. "
The change in the number of users of major products also reflects the narrowing of Tencent's market space. In the first quarter of this year, the combined monthly users of WeChat and WeChat reached 654.38+288 million, up 3.8% year-on-year and 654.38+0.6% quarter-on-quarter. The monthly users of QQ mobile terminal dropped to 564 million, down 7% year-on-year and up 2. 1% month-on-month.
Business structure from virtual to reality
In terms of revenue composition, in the first quarter of this year, Tencent's value-added service business revenue was 72.738 billion yuan, which was the same as the same period last year. Among them, the game revenue in the local market was 33 billion yuan, down1%year-on-year; Game revenue in the international market was 654.38+006 billion yuan, up 4% year-on-year (up 8% at a fixed exchange rate).
A brokerage analyst who specializes in TMT industry told Securities Daily that tencent games's performance in the domestic market is not ideal. On the one hand, the implementation of protection measures for minors has affected some of the running water in tencent games; On the other hand, tencent games's basic disk still supports old-fashioned games when the version number is suspended. Among them, the glory of the king, which ranked first in the company's running water in the first quarter, has experienced a golden cycle of seven years and is in urgent need of new works to make up for it.
The financial report shows that tencent games's "the glory of the king" and "Peace Elite" are still the top two mobile games in the domestic market if they are ranked by the number of daily users; The Battle of the Golden Shovel, released in 20021August, ranked sixth. In addition, Tencent's strategic mobile game "Return to Empire" launched on March 29th this year also performed well, ranking second among similar games in China in April.
"On April 12 this year, the review of the game version number was restarted, marking that the domestic game industry is about to usher in a new round of high-quality game growth cycle. Although there is no Tencent in the first batch of approval lists, it will also benefit from subsequent audits. " The above analysts further stated.
In addition, Tencent's financial technology and enterprise services sector (real economy sector) performed brilliantly in the first quarter, achieving revenue of 42.768 billion yuan, up by 10% year-on-year, and its contribution ratio was the first time in beyond the game, becoming a new performance growth engine of Tencent.
Tencent said that the service revenue of enterprises decreased slightly in the first quarter compared with the same period of last year, which was due to the company's repositioning of IaaS services, from simply pursuing revenue growth to achieving healthy growth, and actively reducing loss contract.
R&D investment is 654.38+05.383 billion yuan.
In terms of cost, Tencent's main expenditures in the first quarter of this year included transaction costs (bank fees, channel and distribution costs) of 30.9 billion yuan, employee welfare expenses of 29.229 billion yuan, content costs of 654.38+05.733 billion yuan, amortization of intangible assets of 8.597 billion yuan, bandwidth and server hosting fees of 7.476 billion yuan, promotion and advertising fees of 5.339 billion yuan, and property, equipment and equipment.
Among them, 654.38+03.067 billion yuan of employee welfare funds belong to R&D investment. The financial report shows that in the first quarter of this year, the company invested 654.38+05.383 billion yuan in R&D, a year-on-year increase of 36%, setting a new high in R&D investment since Tencent was founded.
As can be seen from the financial reports over the years, Tencent's R&D investment has maintained an annual growth rate of 30% since 20 18. On the basis of continuous R&D investment, Tencent has established a complete self-research system including servers, operating systems, chips and SaaS, which has provided a solid technical foundation for serving the real economy.
By April 2022, Tencent had published more than 56,000 patent applications in major countries and regions around the world and authorized more than 26,000 patents. Among them, invention patents account for more than 90%.
Kuang Yuqing, the research founder of Lens, told the Securities Daily reporter that under the background of stricter policy supervision, Tencent is facing adjustment needs at the business direction level, so it needs to continuously increase R&D investment to ensure business innovation.
Ma, Chairman and CEO of Tencent, said that in the face of industry challenges, the company has implemented cost control measures and adjusted some non-core businesses, which will help to achieve a more optimized cost structure in the future. Looking forward to the future, the company will focus on key businesses, persist in innovation under various challenges and periodic changes, and continue to create value for users, partners and the whole society.