Tencent’s total revenues in Q1 2019 were RMB85,465 million (USD12,693 million), an increase of 16% over the first quarter of 2018 according to Tencent’s announced financial results.
Its revenues from VAS increased by 4% to RMB48,974 million for the first quarter of 2019 on a year-on-year basis. Online games revenues were RMB28,513 million, broadly stable compared to the first quarter of 2018. Social networks revenues grew by 13% to RMB20,461 million.
Revenues from FinTech and Business Services increased by 44% to RMB21,789 million for Q1 2019 on a year-on-year basis. The increase was mainly driven by greater revenues from its commercial payment and cloud services.
Revenues from online advertising increased by 25% to RMB13,377 million for the first quarter of 2019 on a year-on-year basis. Social and other advertising revenues increased by 34% to RMB9,898 million, mainly due to the increase in advertising revenues derived from WeChat Moments, Mini-Programs and QQ KanDian.
Mr. Ma Huateng, Chairman and CEO of Tencent, said,
In the first quarter of 2019, we sustained healthy user engagement across our key platforms, with notable growth in the number of short videos uploaded and shared by users on QQ and WeChat.
We are invigorating our game business with popular releases such as Perfect World Mobile in China, while PUBG MOBILE is growing internationally.
Our payment, other FinTech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues, and we are consequently disclosing their results in our new FinTech and Business Services segment, demonstrating our success in organically incubating services with long-term growth potential.
Its operating profit was RMB36,742 million (USD5,457 million), an increase of 20% YoY. Operating margin increased to 43% from 42% last year. Profit for the period was RMB27,856 million (USD4,137 million), an increase of 16% YoY. Net margin was flat at 33%.
Profit attributable to equity holders of the Company for the quarter was RMB27,210 million (USD4,041 million), an increase of 17% YoY.
Basic earnings per share were RMB2.877. Diluted earnings per share were RMB2.844. On a non-GAAP2 basis, which excludes certain non-cash items and certain impact of M&A transactions:
- Operating profit was RMB28,470 million (USD4,228 million), an increase of 13% YoY. Operating margin decreased to 33% from 34% last year.
- Profit for the period was RMB21,673 million (USD3,219 million), an increase of 13% YoY. Net margin decreased to 25% from 26% last year.
- Profit attributable to equity holders of the Company for the period was RMB20,930 million (USD3,108 million), an increase of 14% YoY.
- Basic earnings per share were RMB2.213. Diluted earnings per share were RMB2.187.
During the first quarter of 2019, combined MAU of Weixin and WeChat was 1,112 million, up 6.9% year-on-year.
Smart device MAU of QQ slightly increased year-on-year and exceeded 700 million in the first quarter. Young users became more engaged on the QQ platform and their MAU grew by a double-digit rate year-on-year.
China Internet users are increasingly utilizing WeChat and QQ’s in-app camera functions to record short videos, which they then share in one-to-one chats, group chats, and timeline formats. Users now upload hundreds of millions of videos each day to Tencent’s communications and social platforms, which Tencent believe are the leading venues in China for uploading and viewing such user-created videos.
Tencent launched Mobile QQ Version 8.0 with engaging features such as QQ Mini Programs and KuoLie, which recommends new friends to young QQ users based on similar interests.
In WeChat, Tencent enabled users to share information, products and services for different vertical categories of Mini Programs within their chat groups, facilitating activities such as group buying for local communities, and the active user base for non-game Mini-Programs continued to grow at a healthy rate.
Tencent Video subscriptions increased 43% year-on-year to 89.0 million, driven by popular self-commissioned IP content, such as Candle in the Tomb Season 3; Heaven Sword, Dragon Sabre (based on the popular martial arts novel by Louis Cha); and The Land of Warriors Season 2.
Tencent Video subscription counts were broadly stable sequentially due to delays in airing certain drama series, which might otherwise have contributed more to subscriber growth.
To further engage with video viewers, WeiShi launched a new feature for Produce 101 Season 2, enabling users to vote for contestants and share related short videos with their WeChat and QQ friends.