Tencent management detailed several core businesses: After the revenue is topped, where is Tencent Road?

21st Century Business Herald reporter Bai Yang Beijing report

On August 17, Tencent released the second quarter of 2022 financial reports. During the reporting period, Tencent's revenue was 134.034 billion yuan, a decrease of 3%year -on -year, and net profit was 18.619 billion yuan, a year -on -year decrease of 56%. The net profit under non -international accounting standards was 28.139 billion yuan, a year -on -year decrease of 17%.

This is the first quarter -quarter revenue in Tencent's history that has declined year -on -year, and net profit has declined in four consecutive quarters. At present, Tencent is in the painful period of development, the external market environment is huge, and Tencent is also taking the initiative to withdraw from non -core business, tighten marketing expenses, and reduce operating expenses.

Next, how should Tencent go. At the second quarter performance telephone, Tencent's management also answered the development of several core businesses that the outside world cared about.

About investment

Recently, there are market rumors that Tencent plans to sell all or most of the Meituan shares it holds. Tencent responded at the time that "no rumors."

In this regard, James Michelle, chief strategist at Tencent, said at the telephone meeting that "the news report was inaccurate."

James Michelle said that in view of Tencent's stock price is still seriously undervalued by the market, and the value of the investment portfolio company is also undervalued by the market, Tencent still focuses on creating capital returns for shareholders. As of now, Tencent has paid $ 17-18 billion in investment in shareholders as a return on investment.

In terms of investment and withdrawal, James Michelle said that, including the reduction of companies such as JD.com, Tencent has maintained a moderate rhythm. "From the perspective of investment strategy, we focus on repurchase and pay dividends for stocks, and we will maintain such strategies in the future."

As for where to repurchase and pay dividends from stock dividends, James Michelle felt that this is not a problem that Tencent needs to worry. On the one hand, taking the second quarter as an example, Tencent created a free cash flow of more than $ 10 billion. At the same time, as of the end of the second quarter, the total market value of Tencent Investment Company reached US $ 90 billion. Also more than $ 50 billion.

James Michelle said Tencent has previously stated that it is willing to gradually reduce the shareholders in investment portfolios in order to provide shareholders with more capital returns. In addition, Tencent is also looking for opportunities to return the unspeakable company investment to shareholders by paying dividends and repurchase.

About the game

During the reporting period, Tencent's revenue from online games was 42.5 billion yuan. Among them, the revenue of the international market's game revenue decreased by 1%year -on -year to 10.7 billion yuan, and the local market game revenue also decreased by 1%to 31.8 billion yuan.

James Michelle said this year is indeed a year for the adjustment of the game business. Regardless of domestic business and international business, Tencent will continue to work hard to improve user participation, maintain the industry's leading position and advantages in use, and continuously improve the competitiveness of the international game market.

James Michelle said that Tencent's game model is not aimed at business restoration of profit growth, because even if Tencent's game business is unchanged, its profits will increase. Therefore, Tencent focuses on the improvement of user participation, ability improvement, and the development of new games.

Regarding the future development of the game business, James Michelle said that to judge the growth and recovery of the game industry, we must first depend on whether the current industry status is affected by the epidemic or the overall macro environment. If it is simply affected by the epidemic, Then the industry may achieve growth next year. If it is the impact of a macroeconomic, the current status of the industry may continue to be relatively long.

However, in James Michelle, the game industry is usually not affected by the macroeconomic. Because more and more game revenue comes from prop purchase, game consumption becomes more and more unreasonable, so if the macroeconomic economy encounters challenges, users can also continue to play this game while reducing game consumption.

But the problem is that it is impossible to judge what factors are affected by the specific factors of the game industry. "Although there are many unknown, Tencent will continue to work hard to increase the profitability of the game," James Michelle said.

About TOB business

During the reporting period, Tencent's revenue from fintech and corporate services increased by 1%to 42.2 billion yuan year -on -year. Although this is one of Tencent's few increasing revenue sectors, this growth rate has also decreased significantly compared to the past. Among them, the year -on -year growth rate of fintech services revenue slowed down from the previous quarter, while corporate service revenue decreased slightly year -on -year.

Tencent President Liu Chiping said that the cloud business is indeed affected by the macroeconomic environment. In the vertical industry of customers, the Internet industry is the most affected.

Affected by the external environment, the project signed by Tencent Cloud also faces the challenge of deployment. To this end, Tencent Cloud has also taken preventive measures to reduce these impacts, such as reducing subcontracting and customized services to reduce losses, and withdrawing from irrational price wars.

"These have caused the slowdown in revenue growth, and even the year -on -year decline in the previous quarter. But we are also trying to reduce the loss of the business and focus on the gross -profit growth," Liu Chiping said. This is the recent goal of Tencent Cloud. It is estimated that Tencent Cloud will always follow this path next year.

In terms of cost reduction, Liu Chiping said that Tencent Cloud is through better supply chain management and technology improvement cost efficiency. Especially for chip technology, Tencent is working closely with domestic chip developers to reduce chip costs. In addition, after a long time of hard work, Tencent has completely moved self -developed services to the cloud, which has also improved the scale and cost efficiency of cloud infrastructure, which is conducive to improving profit margins. Regarding the latest progress of fintech business, Liu Chiping said that Tencent's fintech business is currently large, so the progress is relatively stable. "In the past year, we have also been in contact with regulatory agencies to ensure that all businesses operate under compliance, and have also made many business adjustments."

About the video number

In the financial report, the video number is one of the few performances. According to the financial report, the total use time of the video number of the video number exceeds 80%of the total use time of the circle of friends. In addition, the total video playback volume of the video number increased by more than 200%year -on -year, and the number of video playback based on artificial intelligence -based video playback increased by more than 400%year -on -year. The number of daily active creators increased by more than 100%year -on -year.

At the conference call, the video number has also become the focus of attention from the outside world. James Michelle said that the video number is slightly lower than the ECPM of the circle of friends per thousand, but the strength of the advertisement is greater than the advertising of the circle of friends. Therefore The revenue is higher.

According to its disclosure, in the next few days, Tencent will launch a video advertising bidding system as a supplementary contract pricing, which will help the growth of video advertising revenue. In James Michelle, after the bidding system is launched, the video number can achieve at least ECPM levels with at least other domestic short video platforms.

In addition, James Michelle emphasized that the growth of the video number will not have a negative impact on other businesses, because different services can meet different user needs, just like the growth of the business circle business does not affect the WeChat chat business volume. increase.

However, he believes that the video advertisement will definitely compete for other short video platforms, because the revenue of the video advertising will come from the launch of short video advertising customers. At present, the types of customers with video number advertisements are very wide, including e -commerce, Internet services, consumer products, food and beverages, cars, etc. Among them, the growth of car advertising in the past one or two months has been very healthy.

James Michelle said that although the video number time from launching contract pricing advertisements to bidding advertisements (about a few weeks) is far shorter than the circle of friends (about a few quarters), but the concept of business monetization of the two has not changed.

"We put the user experience at the highest position, and this principle has benefited the company a lot. However, in terms of the specific monetization mode, the video number is indeed different from the circle of friends. One is that the reference indicator of the video number is more clear, and the other is that the machine is more clear. Learning and software and hardware are more advanced, the third is that the advertising cost of short videos is lower, "James Michelle said.

At present, the advertising load of the domestic short video platform is about 14%-15%, while the effective display volume of the circle of friends is only 2%-3%.

For the live broadcasting business business, Liu Chiping believes that live broadcasting e -commerce is indeed an opportunity for growth, but it takes time to further prove it.

"In terms of display, we need to convert from short video to live broadcast, so the video number is also cultivating users to watch the live broadcast habits. After the audience forms the habit of watching the live broadcast content, the video number also needs to provide a suitable advertising system to help merchants drainage drainage In addition, the ecosystem of WeChat also plays a role at the same time, including small programs to help complete transactions and private domains help merchants to accumulate users. "Liu Chiping said that this basically summarizes the expansion process of e -commerce business. The video number needs to be gradually completed.

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