March 22, 2017, Tencent announced as of December 31, 2016 unaudited fourth quarter consolidated results and the audited annual comprehensive results. Results show that throughout the year 2016, Tencent total revenue of 1519.38 billion yuan (21.903 billion US dollars), an increase of 48% over the same period last year.
2016 Annual Results Summary:
Total revenue was RMB151,938 million (US $ 21.930 billion), up 48% from the same period last year.
Operating profit was RMB56,177 million (US $ 8.09 billion), up 38% from the same period last year; operating margin decreased from 39% in the same period last year to 37%.
Annual profit was RMB41.447 billion (US $ 5.975 billion), up 42% from the same period last year. Net profit margin fell to 27% from 28% in the same period last year.
Tencent equity holders accounted for earnings of RMB4,495 million (US $ 5.924 billion), an increase of 43% over the same period last year.
Basic earnings per share of RMB 4.383 per diluted share of RMB 4.329.
(Excluding the equity remuneration, net income from the investment company / net loss, amortization of intangible assets and provision for impairment):
Operating profit was RMB58,154 million (US $ 8.383 billion), up 39% from the same period last year. Operating margin decreased from 41% in the same period last year to 38%.
Annual profit was RMB45.991 billion (US $ 6.63 billion), up 40% from the same period last year. Net profit margin fell to 30% from 32% in the same period last year.
Tencent equity holders accounted for earnings of RMB454.2 billion (US $ 6.547 billion), representing an increase of 40% over the same period last year.
Basic earnings per share of RMB 4.844, diluted earnings per share of RMB 4.784 yuan.
Summary of the fourth quarter of 2016:
Total revenue was RMB43.864 billion (US $ 6.323 billion), an increase of 44% over the same period last year.
Operating profit was RMB13.33 billion (US $ 2.08 billion), up 28% from the same period last year. Operating margin fell to 32% from 36% in the same period last year.
Profit for the period was RMB15,023 million (US $ 1.517 billion), up 46% from the same period last year. Net profit margin was 24%, unchanged from the same period last year.
Tencent equity holders accounted for earnings of RMB10.529 billion (US $ 1.518 billion), up 47% from the same period last year.
Basic earnings per share of RMB 1.121 per diluted share of RMB 1.108 per share.
(Excluding the equity remuneration, net income from the investment company / net loss, amortization of intangible assets and provision for impairment):
Operating profit was RMB14,496 million (US $ 1.155 billion), up 30% from the same period last year; operating margin decreased to 38% from 38% in the same period last year.
Profit for the period was RMB12,432 million (US $ 1.792 billion), up 38% from the same period last year. Net profit margin fell to 28% from 30% in the same period last year.
Tencent equity holders accounted for earnings of RMB12.332 billion (US $ 1.778 billion), an increase of 38% over the same period last year.
Basic earnings per share of RMB 1.313, diluted earnings per share of 1.298 yuan.
Tencent Chairman and Chief Executive Officer Ma said: "In 2016, Tencent through a series of strategic initiatives to consolidate the industry leading position, enrich the ecosystem and improve the competitiveness. QQ and WeChat by allowing users to communicate and social, easy to enjoy the content and services, to consolidate its life in China, the ubiquitous platform status. We have released several successful self-research and authorized games and have enhanced our role as a global leader in gaming companies. We have increased the popularity of the media platform, and the number of paid users of digital content has increased rapidly. We have also greatly increased the market share of mobile payment services and the average daily trading volume, in the commercial payment transactions have made rapid growth. Looking ahead, we will provide you with a high-quality experience by further implementing the & lsquo; link "strategy to create business opportunities for partners in the ecosystem. We will also continue to invest heavily in leading-edge technologies such as security, cloud, large data and artificial intelligence to meet the next round of growth. & Rdquo;
Financial analysis for the fourth quarter of 2016
Value-added services. Tencent value-added services business revenue grew 27% to 2016 in the fourth quarter of 29.191 billion yuan. Internet game revenue grew 16% to RMB 18.869 billion. The growth is mainly driven by the contribution of Tencent's main players to play and play-and-play smartphone games. Social network revenue grew 51% to RMB10.722 billion. The increase mainly reflects the digital content services (including the expansion of digital music business) and virtual props sales revenue growth.
Online Advertising. Tencent online advertising business revenue grew 45% to the fourth quarter of 2016 RMB 8.288 billion yuan. The effect of advertising revenue increased by 77% to 5.168 billion yuan, mainly by the WeChat friends circle, Tencent's mobile news applications and WeChat public account advertising revenue contributed to the growth. Brand advertising revenue grew 11% to RMB330.0 million, driven by revenue growth from Tencent's mobile media platform (such as Tencent News and Tencent video), and some branded advertising resources were replaced with effective advertising resources. Offset.
other. Tencent's revenue from other businesses grew 289% YoY to RMB3.685bn in the fourth quarter of 2016. The increase is mainly due to Tencent's payment-related services and cloud services revenue growth.
Other major financial information for the fourth quarter of 2016
Excluding share expense for the quarter was RMB1,754 million, representing an increase of 117% over the same period last year.
EBITDA was RMB16,775 million, representing an increase of 39% over the same period last year. Adjusted EBITDA was RMB18,495 million, representing an increase of 44% over the same period last year.
Capital expenditure was RMB2,839 million, representing an increase of 51% over the same period last year.
The free cash flow was RMB17.556 billion, up 6% from the same period last year.
On December 31, 2016, Tencent's net cash was RMB18.184 billion. As at 31 December 2016, the fair value of Tencent's equity interest in listed investment companies (including associates and available-for-sale financial assets) amounted to RMB89 billion.
Company Strategy Summary
2016, by making Tencent's social platform in the user to share and communicate more interactive, and connect more online and offline services, Tencent further strengthen the "link" strategy. Tencent is increasingly committed to QQ and WeChat platform for users to provide differentiated experience.
QQ by enriching and optimizing its entertainment-oriented features to further cater to young user groups. From a social point of view, QQ introduces a range of features such as facial beauty tools, oil painting style photos and dynamic video pendant, making it more interactive and interactive experience. From the content side, QQ through interesting content, such as literature, cartoons and short video to improve user activity.
WeChat focused on the user's daily life to provide more convenient. During the year, WeChat enriched the content of the public account around the ecological, improve the WeChat payment between merchants and users in the use rate. WeChat in January 2017 launched a small program, I believe the future will help Tencent in the low-frequency use of the scene to provide a broader range of services, connecting more offline services and online users, and allow users to have more ways Touch and experience the functionality provided by mobile applications to improve download conversion rates for mobile applications.
Tencent is also committed to deepen the user and Tencent core business engine between the & ldquo; connection & rdquo ;:
Online games: Tencent's online game business once again achieved steady growth. Through data mining, Tencent to enhance the performance of the existing game and get more insight into the behavior of players. Variety of Tencent self-research games such as "King of glory", "Royal Dragon in the days" and "Naruto" in China has made remarkable achievements, to consolidate Tencent as a local and overseas game developers in China's preferred distributor status. In overseas, Tencent through the investment Supercell and Paradox expanded Tencent's market map; Tencent also issued in Southeast Asia, several self-developed smart phone games.
Smartphone Games: Tencent's strategy is to attract a large number of casual gamers and gradually guide them to upgrade to moderate and severe game categories. During the year, Tencent continued to consolidate the player in the game's leading position, and through a series of successful self-study and agent games, expanding the role of Tencent in the role-playing game.
PC client game: Tencent by adding new content in the existing game and through data mining to gain insight into user behavior, trying to better serve the heavy players, and thus bring paid user penetration year on year growth. Tencent through e-sports, game video, and game interest groups to enhance the main PC game user participation. Tencent as a comprehensive PC gaming community, Tencent gaming platform to recommend new players to play an important role in the game.
Advertising: For large customers, Tencent to provide effective combination of advertising solutions to improve the penetration rate. For long tail customers, Tencent has successfully increased the number of small and regional advertisers by optimizing targeting algorithms and upgrading Tencent's advertising self-service tools for marketing management and performance measurement.
Social and effect advertising: Tencent platform with excellent directional ability, highlighting the ability of consumers and high-quality brand image, Tencent's social advertising resources are particularly attractive for advertisers. Tencent around the form of advertising innovation, to provide users with more native and immersive experience to enhance the advertising effect. Tencent WeChat public account mutual advertising allows advertisers and WeChat public account to choose each other to better match the relevant ads and the appropriate content to match. By increasing the click-through rate and selling rate of existing inventory, Tencent achieved a satisfactory revenue growth without substantially increasing the ad's loading rate.
Brand advertising: video, Tencent focus on investment advertising to better use Tencent quality advertising resources. News applications, Tencent to further enhance the advertising targeting capabilities.
Digital content: Tencent's social platform plays an important role in advancing the growth in the number of digital content platforms, accelerating its growth into a successful independent business. Thanks to the optimized content, more convenient payment solutions, and the continuous improvement of the Chinese copyright protection environment, Tencent digital content business, the number of subscribers has made significant growth. Video, Tencent through further investment in high-quality content (especially Tencent in-depth participation in the production of exclusive content) to enhance the number of subscribers Tencent order. Music, Tencent with high-quality content to promote the growth of the number of subscribers, made a digital album sales of the initial success, and promote the Tencent karaoke OK virtual gift on the platform of consumption. Literature, Tencent QQ browser and QQ mobile phone applications such as reading channels to reach new users, to strengthen Tencent efforts to combat piracy, and is committed to self-made movies and TV series to enhance the value of IP.
Payment related services: In December 2016, Tencent Mobile paid monthly active accounts and daily payment transactions were more than 600 million. Tencent's payment-related services provide a seamless and seamless experience for a wide range of offline consumption scenarios (such as taxi reservations, convenience stores, restaurants and supermarkets). Tencent enhances business penetration by working with agents and streamlining business access processes. Tencent's commercial payment transactions grew rapidly, from large-scale online business to the rapid expansion of all types of businesses. Tencent's secure payment infrastructure continues to improve in terms of payment security, service reliability and transaction speed, allowing Tencent to steadily handle the red envelope peak of 760,000 per second during the Spring Festival.
Cloud services: through continuous investment in cloud services, Tencent for corporate customers and partners to provide a number of self-research technology. Tencent has become a clear industry leader in providing solutions for the gaming and video industry, consolidating market position in providing O2O and financial services solutions. During the year, Tencent continued to invest in technology and infrastructure, expanded the sales team and development channel agents to attract more small application developers to use Tencent services, while Tencent to strengthen the ability to help overseas Chinese enterprises to deploy overseas business. Benefited from the number of corporate customers and the use of existing customers a substantial increase in 2016 Tencent cloud services revenue grew more than twice.
In addition, Tencent is investing in cutting-edge technology (such as artificial intelligence and machine learning) to layout Tencent's future "Link & rdquo; strategy. Tencent will use the machine to learn in Tencent digital content services in the personalized recommendation to enhance Tencent's advertising targeting capabilities, rich social interaction (such as dynamic mask function), and cost savings (such as optimizing customer service needs).
Business Review and Outlook
Company product summary
QQ active account reached 868 million, an increase of 2% over the same period last year.
QQ smart terminal active account reached 652 million, an increase of 2% over the same period last year.
QQ highest simultaneous online accounts (quarter) reached 244 million, up 1% over the same period last year.
WeChat and WeChat consolidated monthly active account reached 889 million, an increase of 28% over the same period last year.
QQ space month active account reached 638 million, down 0.3% over the same period last year.
QQ space smart terminal monthly active account reached 595 million, an increase of 4% over the same period last year.
The number of registered value-added services registered accounts was 110 million, an increase of 16% over the same period last year.
Social and communications platforms
QQ: smart terminal monthly active account grew 2% to 652 million. The highest simultaneous online accounts (including PC and mobile phones) reached 244 million. User activity benefits from new features such as centimeters show, photo landscaping, and dynamic pendant for video. By introducing in the interaction to enhance the reality of technology, QQ attracted 250 million users in the five-day Spring Festival activities opened during the 2 billion support red envelopes.
QQ space: smart terminal monthly active account growth of 4% to 595 million. User activity benefits from the promotion of features such as immersive video experiences, live, and allow family members to maintain parental albums for this photo feature upgrade.
WeChat and WeChat: monthly active account of 889 million, an increase of 28%. In the Lunar New Year's Eve 24 hours period, WeChat red envelopes sent and received amounted to 14 billion, an increase of 76% over the same period last year.
Online game platform
PC client game: Tencent maintained as China's largest game operators and distribution platform leading position, operating China's top three PC client games (respectively, "Heroes Union", "Dungeons & Fighters" and "through FireWire" ). According to SuperData, the 2016 Heroes Alliance ranked first in all PC client games worldwide. Smartphone games have some negative impact on PC users' time, especially when Tencent's PC and smartphone games use the same IP - for example, Tencent's shooting game "Cross Fire". However, these combined use of the same IP PC and smartphone games has increased dramatically.
Smartphone Games: Tencent to maintain the status of China's leading smart phone game publishers. According to AppAnnie, in the iOS system Tencent is the world's best-selling game in the list of the first distributor. In general, Tencent's game in the Andrews system generated more income than the iOS system, mainly due to China's Andrews system mobile phone users more, and Tencent's many games for young users (using Andrews mobile phone more) more Attractive. Tencent games in the fourth quarter of the smartphone game revenue of about 10.7 billion yuan, up 51% year on year, benefiting from the growth in the number of Tencent games and the strong performance of the main players in the game and role-playing games. At the end of 2016, the "king of glory" of the active users more than 50 million, Tencent platform to create a smart phone game on the new record. In 2016, Tencent in the role-playing game has made continuous progress, such as "Dream Zhu Xian", "Swordsman Love", "journey" and "Royal Dragon in the days" and other games of success.
Media and digital content platform
News Service: Tencent's news services (including independent news applications and news plug-ins in Tencent's social networking platform) maintain industry-leading positions on a daily active account. Tencent News as the most popular professional news applications, focusing on the depth of news content. Express has become one of China's most popular news applications through attractive and highly personalized casual reading.
Network video: Tencent video services in mobile video viewing volume ranked first in China, its number of users has more than 20 million, an increase of more than twice. During the year, with the film and television drama "ghost blowing light of the fine city" and "if the snail has love" popular, Tencent made in the field of self-made content of the initial success.
Digital Music: Tencent has expanded its industry-leading music library and stepped up efforts to combat piracy. In 2016, the National K song (Tencent's online karaoke application) day active account more than 35 million, an increase of more than doubled, becoming China's largest online karaoke community. The virtual gift as a tool for the audience and the artist's interaction is popular on the universal K song.
Network Literature: Tencent strengthens the relationship with the head of the author, and by more content will be recommended to the reader to help the long tail author to expand the fan group. Benefiting from the reduction of piracy, the number of readers per day close to about 2.5 million people, an increase of more than doubled.
Security: According to QuestMobile, Tencent's mobile security applications to further expand its industry leading position in China ranked first (monthly active account). Tencent in 2016 won two world-class security vulnerabilities found in the game, Pwn2Own and mobile Pwn2Own are ranked first. In 2016, Tencent further consolidated the leading position in the field of mobile security such as virus scanning, pseudo base station detection, anti-fraud telephone number library, mobile memory optimization and equipment acceleration.
Application store: Application Po (Tencent's application store) has achieved significant market share, and beyond the pioneer to become a clear market leader. According to QuestMobile, the application of Po in China's all Andrews application store ranked first (monthly active account). In addition to the application discovery function, Tencent also through the entertainment content (such as video, cartoon and literature) to enhance user activity. During the year, the application of Po has grown into Tencent smart phone games in the Andrews system market, an important distribution platform for Tencent and social advertising and advertising to make a substantial contribution to the growth.
Browser: According to QuestMobile, Tencent's mobile browser in China ranked first (monthly active account), to further consolidate its industry leading position. Personalized referrals bring pageviews and video views to strong year-on-year growth. QQ browser for Tencent network literature users to make an important contribution to the growth.
Prospects and Strategies for the Company in 2017
In 2017, Tencent plans around the core social and communications platform to expand Tencent's ecosystem to deepen Tencent's "link" strategy, specific measures include:
In Tencent's social platform to add more services, and further to provide users with convenience, and Tencent ecosystem partners to create business opportunities;
Expand the popularity of Tencent's main smartphone games, while increasing the category-oriented PC games;
Through the ability to open up Tencent in brand and effect advertising, expand Tencent's advertising market share; and through more deepening of the directional algorithm and more convenient advertising self-service tools to increase the number of Tencent small and regional advertisers;
To promote the growth of Tencent digital content subscription user base;
By covering more online and offline consumption scenarios, to improve the frequency of Tencent payment related services;
The development of Tencent in the field of emerging technology capabilities, such as machine learning and cloud services.
Tencent technology to enrich the lives of Internet users. Every day, hundreds of millions of users through Tencent's integration platform to communicate online, share experiences, access to information and
Seeking entertainment. Tencent diversified services include: social and communications services QQ and WeChat / WeChat, social networking platform QQ space, Tencent game QQ game platform, portal Tencent (QQ.com), Tencent news client and network video services Tencent video The
Tencent was established in 1998 in Shenzhen, China, listed on the Main Board of the Hong Kong Stock Exchange in 2004, Tencent is one of Hong Kong's Hang Seng Index constituent stocks. Through investment innovation, for partners to provide a mutually win-win environment and close to the needs of users, Tencent is committed to common development with the Internet.