Tencent Q3 net profit of 20.38 billion yuan: down 13% YoY

On November 13, Tencent reported third-quarter 2019 results, with revenue of 97.236 billion yuan up 21% YoY, and net profit of 20.38 billion yuan, down 13% YoY. Non-GAAP net profit was RMB24,412 million, up 24% YoY. Among them, fintech and corporate services sector contributed 26.8 billion yuan in revenue, contributing 28% of Tencent’s overall revenue, which has become Tencent’s stable earnings growth point. The revenue of cloud services reached RMB4.7 billion, up 80% YoY, and the revenue of the cloud services has exceeded half of the full-year revenue in 2018.

Tencent Q3 net profit of 20.38 billion yuan down 13% YoY

The combined monthly number of live accounts of WeChat and WeChat reached 1.151 billion, up 6.3% year-on-year, with the small program revealing for the first time that DAU reached 300 million, according to the results. This year, “Double Eleven” period, brand self-style small program visits more than 100 million people, 56% of the brand proprietary small program transaction amount increased by more than 50% year-on-year, the middle waist small program is rapidly rising. Over the same period, the number of small program transactions in the convenience store and fresh fruit and vegetable industry increased by 100%.

Revenue from the online advertising business increased 13% year-on-year to RMB18.366 billion. Social and other advertising revenue increased 32% to RMB14.716 billion, mainly due to increased advertising inventory and exposure in WeChat’s Friends Circle, as well as the revenue contribution of the Mobile Advertising Alliance. Media advertising revenue fell 28% year-on-year to RMB3.650 billion, mainly due to the impact of media platforms, including Tencent Video, due to the macro environment and the scheduling uncertainty of major TV dramas.

The number of subscription accounts for fee-value-added services increased by 11% year-on-year to 170.6 million, mainly driven by an increase in the number of subscription accounts for video and music services. Tencent’s video subscription accounts increased 22% year-on-year to 100.2 million. The expansion of the paid music library has boosted the number of music ordering accounts by 42% year-on-year to 35.4 million.

Online advertising revenue increased 13% year-on-year to RMB18.4 billion. Strong demand from advertisers in the gaming, education and e-commerce verticals offset weak advertising demand in the auto industry.

“Since Tencent’s start, we have been committed to providing our users with the best quality products and the best experience,” said Ma Huateng, Chairman and Chief Executive Officer of Tencent’s Board of Directors. Now, as the Internet deepens into the daily lives of the masses, we further clarify our mission and vision so that our colleagues, partners and users can understand our pursuits and standards. We have just announced a new corporate mission – ‘User-oriented, technology to good’. This is not a new principle, but a belief that we have always adhered to and pursued.

In the third quarter, we achieved steady and healthy growth in both operational and financial terms. It is worth noting that revenue from our fintech and corporate services and advertising divisions recorded double-digit growth, reflecting the strength of our new business and the diversification of our business, as a result of increased user activity and improved advertising technology. According to non-IFRS, the year-on-year growth rate of net profit was faster than in the previous quarter. Looking ahead, we will continue to invest in products, technology and services to bring value to our users and create well-being for society. “

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