Tencent holdings released its performance in 2021, with an annual operating revenue of 560.1 billion yuan in 2021, a year-on-year increase of 16%; The net profit attributable to the parent company (non IFRS) was 123.8 billion yuan, a year-on-year increase of 1%. The operating revenue of 21q4 company was 144.2 billion yuan, an increase of 8% year-on-year and 1% month on month; The net profit attributable to the parent company was 24.9 billion yuan, down 25% year-on-year and 22% month on month.
Main performance comments and Prospects
The growth of consumer Internet business slowed down, and 2b business became the main growth driver. In terms of business, Tencent's value-added service revenue increased by 10% year-on-year to 291.6 billion yuan in 2021; Online advertising revenue increased by 8% year-on-year to 88.6 billion yuan; The income from financial technology and enterprise services increased by 34% year-on-year to 172.2 billion yuan. The revenue of 21q4 value-added service industry increased by 7% year-on-year to 71.9 billion yuan, the revenue of online advertising decreased by 13% year-on-year to 21.5 billion yuan, and the revenue of financial technology and enterprise services increased by 25% year-on-year to 48 billion yuan.
Overseas game performance remained strong, and social network revenue continued to grow. Among value-added services, the overall revenue of games in 2021 was 174.3 billion yuan: Chinese Games was 128.8 billion yuan, with a year-on-year increase of 6%. Affected by the supervision related to the protection of minors, the year-on-year increase of Q4 fell to 1%. The regulatory impact will be gradually digested in 22h2. The performance of overseas games remained strong, and the annual revenue increased by 31% year-on-year to 45.5 billion yuan. The social network business is driven by video number live broadcast, long video and music services. In 2021, the revenue increased by 8% year-on-year to 117.3 billion yuan; The number of music members increased by 36% year-on-year to 76 million, and video members increased by 1% year-on-year to 124 million.
Online advertising revenue fluctuates greatly, and wechat advertising is still highly competitive. In the second half of the year, due to the impact of changes in the macroeconomic and regulatory environment, the growth of online advertising revenue slowed significantly, and Q4 fell year-on-year. Among them, the social and other advertising revenue increased by 11% to 75.3 billion yuan in the whole year, the daily active advertisers of Q4 wechat increased by more than 30% year-on-year, and more than 1 / 3 of the advertising revenue of the circle of friends came from the landing page of the applet and the advertising connected with the enterprise wechat customer service, which improved the advertising conversion efficiency. Media advertising fell 7% year-on-year to 13.3 billion yuan. With the recovery of macro environment and product upgrading, the recovery of 22h2 advertising business will be more obvious.
The amount of commercial payment has increased rapidly, and SaaS business is the focus of expansion. Fintech revenue is mainly driven by the increase in commercial payments. In cloud and enterprise services, the company will focus on expanding the scale of SaaS business. At present, it has opened up enterprise wechat, Tencent conference and Tencent documents to provide better solutions for enterprises; Enterprise wechat provides customers with differentiated CRM functions. The business development goal of IAAs and PAAS at the lower level has shifted from simple revenue growth to paying more attention to customer value creation and improving their own profit margin.
New business investment led to a decline in gross profit margin and a rapid increase in R & D expenses. In 2021, the overall gross profit margin of the company decreased by 2 percentage points year-on-year to 44%, mainly due to the increase of video number live broadcast revenue sharing cost and server cost, the increase of cloud service related investment, the increase of payment related transaction cost, etc. R & D expenses have increased due to fierce talent competition in recent years and are expected to ease in 2022.
Investment advice
It is suggested to pay attention to Tencent's three new strategic directions: SaaS service competitiveness, video Number commercialization and overseas game development. We believe that the company will continue to increase investment in the R & D and service quality of SaaS tools to expand its competitive advantage; The viewing volume and user duration of video number content doubled in 2021, laying a good foundation for commercialization; Many overseas studios have been acquired or established in the past two years. The long-term operation of existing high-quality IP and the issuance of new games will continue to promote the development of overseas games. In addition, facing the rapidly changing environment, the company will be more cautious in non core strategic business investment.
Major risks
The game version number has not been issued for a long time; Macroeconomic downturn affects advertising; 2B the development of Internet business is less than expected; Antitrust regulation exceeds expectations; Financial business supervision risk.
