This afternoon (May 18), Tencent announced the financial report for the first quarter of 2022. In Q1 2022, Tencent achieved a revenue of 135.5 billion yuan, basically the same as that of the same period last year; The net profit of non IFRS was 25.5 billion yuan, a year-on-year decrease of 23%, which is also the third consecutive quarterly decline of Tencent’s net profit.
in the first quarter of this year, affected by the repeated epidemic and the weak macro consumption environment and other factors, Tencent’s advertising business and China’s game business remained under pressure, while overseas games maintained low growth. Although financial technology and enterprise services representing to B became the growth engine during the reporting period, the growth rate of this part of revenue is also slowing down
By business, Q1 value-added business revenue in 2022 was 72.7 billion yuan, a slight increase of 0.4% year-on-year. Among them, the game revenue was 43.6 billion, with a year-on-year increase of the same level; Social income was 29.1 billion, with a year-on-year increase of 1%. The income from live broadcasting of video numbers increased, while the income from live broadcasting of music and games decreased.
Continuing the first two quarters, Tencent subdivided the game into two parts: local and international. Affected by minor protection measures, the revenue of this year fell by 1% in the first quarter, recording a revenue of 33 billion yuan. This is the first decline in the revenue of local games since Tencent separated the local and international game markets in the third quarter of 202 7 international market game revenue increased by 4% to 10.6 billion yuan.
At the conference call, Tencent executives said that the current approval status of China’s game version is good, and there will be more positive signs in the future. They will closely follow the regulatory factors and promote the further development of the game on the basis of more stable and predictable regulation.
As one of the key points of Tencent’s development in recent years, video number moves frequently in 2021. In this financial report, Tencent mentioned that it will continue to invest in strategic growth fields, including video number. At the teleconference, Tencent executives reiterated their attitude towards video numbers again, video numbers are very important for Tencent’s overall business. In the future, we hope to consider how to realize video numbers. The successful realization of video numbers will be a very important driving force for the increase of company profits
affected by the weak advertising demand in education, Internet services, e-commerce and other industries, especially the continuation of the epidemic in some parts of China, in the first quarter of this year, the revenue growth of Tencent’s online advertising business still showed a downward trend, with a revenue of 18 billion yuan, down 18% year-on-year. Among them, social and other advertising revenue decreased by 15% to RMB 15.7 billion, and media advertising revenue decreased by 30% to RMB 2.3 billion.
At the conference call, Tencent executives said that the epidemic is a very strong headwind factor in the advertising business. Tencent will continue to invest in optimizing the advertising system to strengthen the delivery accuracy and conversion rate.
In recent years, Tencent is increasing its investment in industrial Internet to B, such as opening up enterprise wechat, Tencent documents, Tencent conferences, etc., developing Tencent cloud, and participating in the construction of new digital infrastructure such as “digital computing in the East and digital computing in the west”.
among the three main businesses of Tencent, the growth in the first quarter basically came from to B business, namely financial technology and enterprise services this business increased by 10% year-on-year in Q1 2022, recording a revenue of 42.8 billion yuan, which is almost the same as the game business revenue of the basic disc (43.6 billion yuan).
Nevertheless, the growth rate of this part of income is also slowing down. In the first quarter, affected by the epidemic, the offline payment scene was blocked, which had a certain impact on the scale of third-party payment transactions, so Tencent’s payment business was affected. In addition, the revenue from cloud and other enterprise services decreased month on month. At the conference call, Tencent executives said that the company would refocus on the healthy growth of enterprise services, actively reduce loss making businesses, and focus its resources on pass solutions in the fields of video cloud and network security.
