HONG KONG, May 13 /PRNewswire-Asia/ -- Tencent Holdings Limited ("Tencent" or the "Company", SEHK 00700), a leading provider of Internet and mobile & telecommunications value-added services in China, today announced the unaudited consolidated results for the first quarter of 2009 ended March 31, 2009.
Highlights of the first quarter of 2009:
-- Total revenues were RMB2,504.4 million (USD366.4 million(1)), an
increase of 19.4% over the fourth quarter of 2008 ("QoQ") or an
increase of 74.8% over the first quarter of 2008 ("YoY")
-- Revenues from Internet value-added services ("IVAS") were RMB1,904.6
million (USD278.6 million), an increase of 28.8% QoQ or an increase
of 90.7% YoY
-- Revenues from Mobile & telecommunications value-added services
("MVAS") were RMB439.5 million (USD64.3 million), an increase of 9.9%
QoQ or an increase of 52.5% YoY
-- Revenues from Online advertising were RMB146.6 million (USD21.4
million), a decrease of 30.1% QoQ or an increase of 1.4% YoY
-- Gross profit was RMB1,718.5 million (USD251.4 million), an increase
of 21.5% QoQ or an increase of 64.5% YoY. Gross margin increased to
68.6% from 67.4% last quarter
-- Operating profit was RMB1,164.6 million (USD170.4 million), an
increase of 24.8% QoQ or an increase of 57.9% YoY. Operating margin
increased to 46.5% from 44.5% last quarter
-- Profit for the period was RMB1,053.6 million (USD154.1 million), an
increase of 20.3% QoQ or an increase of 94.4% YoY. Net margin
increased to 42.1% from 41.8% last quarter
-- Profit attributable to equity holders of the Company for the period
was RMB1,035.4 million (USD151.5 million), an increase of 19.1% QoQ
or an increase of 93.8% YoY
-- Key platform statistics:
-- Total registered Instant Messaging ("IM") user accounts increased
to 934.9 million, representing a 4.8% growth QoQ
-- Active IM user accounts increased 9.1% QoQ to 410.8 million
-- Peak simultaneous online user accounts for IM services recorded
57.5 million, a growth of 15.7% QoQ
-- Peak simultaneous online user accounts of QQ Game portal (for mini
casual games only) was 5.8 million, representing a 22.7% growth
QoQ
-- IVAS paying subscriptions were 36.9 million, an increase of 17.5%
QoQ
-- MVAS paying subscriptions were 16.8 million, an increase of 14.3%
QoQ
(1) Figures stated in USD are based on USD1 to RMB6.8359
Mr. Ma Huateng, Chairman and CEO of Tencent, said, "Leveraging our online platforms and benefiting from the positive seasonality for our Internet value-added services, we achieved solid results for the first quarter of 2009. Despite the economic downturn, our user-paid Internet and mobile value-added services have so far been relatively resilient. On the other hand, our online advertising business was negatively impacted due to stringent budget control adopted by advertisers."
"While we remain cautious of the macro-economic environment, as the visibility of the advertising market is still low and the continued performance of our user-paid services under a prolonged economic downturn remains untested, we are committed to making further investments in our platforms and people to position us for capturing the longer term growth of the online market in China."
Business highlights
IVAS revenues increased 28.8% QoQ to RMB1,904.6 million and represented 76.0% of the total revenues in the first quarter of 2009. Revenue increase from online gaming and community value-added services reflected the positive seasonal impact of the Chinese New Year holidays and winter break for students as well as the Company’s continued efforts in service enhancements. Revenues from community value-added services recorded increase, mainly driven by the growth in QQ Membership and Qzone during the favorable season. Revenues from QQ Membership grew with enhanced user loyalty and stickiness as a result of the introduction of more valued-added functions and privileges. Growth in revenues from Qzone was mainly attributable to increase in number of active users and user activity.
Game-related IVAS revenues increased 32.2% QoQ to RMB1,060.7 million. The significant growth in revenues was on the back of seasonal promotions during the quarter and increased monetization of advanced causal games and MMOG launched in 2008, as well as the organic growth of QQ Game. For advanced causal games, Cross Fire and QQ Dancer gained traction and posted robust revenue increase during the quarter. For MMOG, Dungeon and Fighter ("DNF") registered growth in the number of peak concurrent users.
MVAS revenues increased 9.9% QoQ to RMB439.5 million and represented 17.6% of the total revenues. This increase was mainly driven by the growth in bundled SMS packages due to ongoing addition of privileges, enhancements in user experience of the Company’s services as well as increased promotions across different channels. Revenues from mobile gaming services also increased as a result of the growing popularity of mobile games.
Online Advertising revenues decreased 30.1% QoQ to RMB146.6 million and represented 5.9% of total revenues in the first quarter of 2009. The decline reflected lower advertising spending by customers as they imposed more cautious cost control measures, which include delaying the budget approval process and signing of framework contracts, under the uncertain economic environment. In addition, the first quarter is generally a weak season for advertising where activities were reduced around the Chinese New Year holidays.
Other key financial information
Share-based compensation was RMB49.3 million for the first quarter of 2009 as compared with RMB48.4 million for the previous quarter. Foreign exchange gain was RMB0.2 million for the first quarter of 2009 as compared with RMB2.6 million for the previous quarter. Capital expenditure was RMB196.9 million for the first quarter of 2009 as compared with RMB450.1 million for the previous quarter.
Basic earnings per share for the quarter were RMB0.577, and diluted earnings per share were RMB0.566.
As at the end of March 31, 2009, cash position stood at RMB6,597.8 million. The total number of shares of the Company in issue was 1.799 billion.
Outlook
Looking ahead, the second quarter of 2009 would present a weaker seasonality for the Company’s IVAS business. On the other hand, the Company expects its online advertising business to benefit from relatively better seasonality in the second quarter, although the overall industry outlook continues to be weak.
The Company expects the economic environment to remain challenging as it is still in the midst of a global recession. The Company’s Internet and wireless value-added services, which are characterized by user-paid small ticket consumption items, have so far been rather resilient in the downturn, although the Company is uncertain of its performance should the economy continue to weaken for a prolonged period. The Company’s online advertising business would continue to be affected by the economic slowdown as advertisers remain cautious on their spending for 2009. Despite these challenges, the Company believes that the time spent online by users will not decrease even under a weakened economic environment as the Internet is increasingly an indispensable part of everyday life for people in China. This allows the Company to continue its engagement of users in an economic downturn and to build its business for growth over the long-term.
About Tencent
Tencent aims to enrich the interactive online experience of Internet users in China by providing a comprehensive range of Internet and wireless value-added services. Through its various online platforms, including Instant Messaging QQ, web portal QQ.com, QQ Game portal, multi-media blog service Qzone and wireless portal, Tencent services the largest online community in China and fulfills the user’s needs for communication, information, entertainment and e-Commerce on the Internet.
Tencent has three main streams of revenues: Internet value-added services, mobile and telecommunications value-added services and online advertising.
Shares of Tencent Holdings Limited are traded on the Main Board of the Stock Exchange of Hong Kong Limited, under stock code 00700. The Company became one of the 43 constituents of the Hang Seng Index (HSI) on June 10, 2008. For more information, please visit http://www.tencent.com/ir .
Forward-Looking Statements
This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Group and are stated herein on the basis of the outlook at the time of this announcement. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
In RMB ‘000 (unless otherwise stated)
Unaudited Unaudited
1Q2009 4Q2008 1Q2009 1Q2008
Revenues 2,504,365 2,097,381 2,504,365 1,432,911
Internet VAS 1,904,563 1,478,601 1,904,563 998,733
Mobile & Telecom VAS 439,545 399,884 439,545 288,291
Online Advertising 146,563 209,611 146,563 144,580
Others 13,694 9,285 13,694 1,307
Cost of revenues (785,914) (683,139) (785,914) (388,465)
Gross profit 1,718,451 1,414,242 1,718,451 1,044,446
Gross margin 68.6% 67.4% 68.6% 72.9%
Other (losses)/gains, net (771) 45,804 (771) 47,448
S&M expenses (98,105) (147,271) (98,105) (85,934)
G&A expenses (455,018) (379,921) (455,018) (268,642)
Operating profit 1,164,557 932,854 1,164,557 737,318
Operating margin 46.5% 44.5% 46.5% 51.5%
Finance income/(costs) 248 2,596 248 (94,466)
Share of profit
of associates 5,372 1,387 5,372 --
Profit before income tax 1,170,177 936,837 1,170,177 642,852
Income tax expense (116,567) (60,688) (116,567) (100,840)
Profit /total comprehensive
income for the period 1,053,610 876,149 1,053,610 542,012
Net margin 42.1% 41.8% 42.1% 37.8%
Attributable to:
Equity holders of
the Company 1,035,440 869,097 1,035,440 534,378
Minority interests 18,170 7,052 18,170 7,634
Earnings per share
- basic (RMB) 0.577 0.484 0.577 0.298
- diluted (RMB) 0.566 0.474 0.566 0.290
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In RMB ‘000 (unless otherwise stated) Unaudited Audited
31 March 31 December
2009 2008
ASSETS
Non-current assets
Fixed assets 1,347,998 1,165,048
Construction in progress 825,702 875,897
Investment properties 32,212 64,981
Leasehold land and land use rights 35,859 36,046
Intangible assets 339,170 370,314
Investment in associates 320,633 302,712
Deferred income tax assets 318,016 334,164
Available-for-sale financial assets 87,037 86,180
Prepayments, deposits and other receivables 124,363 124,354
3,430,990 3,359,696
Current assets
Inventories 2,294 5,483
Accounts receivable 1,103,997 983,459
Prepayments, deposits and other
receivables 374,498 378,340
Financial assets held for trading 329,866 329,804
Held-to-maturity investments -- 68,346
Term deposits with initial term of over
three months 2,464,401 1,662,501
Cash and cash equivalents 3,803,523 3,067,928
8,078,579 6,495,861
Total Assets 11,509,569 9,855,557
EQUITY
Equity attributable to the Company’s
equity holders
Share capital 195 195
Share premium 1,106,830 1,155,209
Shares held for share award scheme (27,692) (21,809)
Share-based compensation reserve 431,006 381,439
Other reserves (433,038) (433,038)
Retained earnings 6,974,370 5,938,930
8,051,671 7,020,926
Minority interests in equity 116,576 98,406
Total Equity 8,168,247 7,119,332
LIABILITIES
Non-current liabilities
Deferred income tax liabilities 73,757 78,368
Long-term payables 566,269 566,260
640,026 644,628
Current liabilities
Accounts payable 438,820 244,647
Other payables and accruals 886,882 1,013,542
Current income tax liabilities 126,902 47,307
Other tax liabilities 132,081 103,933
Deferred revenue 1,116,611 682,168
2,701,296 2,091,597
Total Liabilities 3,341,322 2,736,225
Total Equity and Liabilities 11,509,569 9,855,557
