Just now, Tencent has released a quarterly report that is much more than expected.
On May 14, Tencent released its first quarterly report, which showed that its revenue in the first quarter of this year was 159.501 billion yuan, up 6% year on year; Gross profit was 83.87 billion yuan, up 23% year on year, and net profit (Non IFRS) was 50.265 billion yuan, up 54% year on year.
It is reported that thanks to the rapid growth of new businesses such as video number, applet and SaaS, as well as the focus and efficiency improvement of traditional businesses, Tencent maintained rapid growth in the first quarter of 2024, with gross profit growth exceeding 20% for the fourth consecutive quarter. In addition, since the second half of 2022, Tencent has achieved operating profit and gross profit growth for six consecutive quarters, both exceeding revenue growth.
It is worth mentioning that Tencent continued to strengthen shareholder returns. According to the first quarter report, it repurchased HK $14.8 billion in the first quarter of this year, with an average daily repurchase amount of HK $824 million, a record high.
Thanks to favorable policies, steady growth in performance and strong buyback efforts, Tencent Holdings broke through HK $320 per share in late April, and its market value returned to HK $3 trillion. Today, Tencent's share price rose 1.75% to HK $384.8 per share, a new high since April 2023. As of the closing, Tencent's share price rose 0.95% to close at HK $381.8 per share. It is worth noting that Tencent's share price has risen by about 30% since this year.
Net profit of 50 billion yuan in the first quarter
Tencent's performance once again broke the expectations of external institutions.
Data shows that Tencent's revenue in the first quarter of this year was 159.501 billion yuan, and the market estimated 158.81 billion yuan; The net profit in the first quarter was 41.9 billion yuan, and the market estimated 34.5 billion yuan; The adjusted net profit in the first quarter was 50.265 billion yuan, and the market estimated 43 billion yuan. Both the revenue and net profit data greatly exceeded the market expectations!
In terms of year-on-year and month on month growth, Tencent's performance is also very impressive. The company achieved an operating revenue of 159.501 billion yuan in the quarter, up 6% year on year and 3% month on month; Net profit (Non IFRS) was 50.265 billion yuan, up 54% year on year and 18% month on month.
It is understood that in the first quarter of this year, the video number, small programs, small games and other products from the WeChat ecosystem performed strongly. In the first quarter, the total user duration of video number increased by more than 80% year on year, the flow of small games increased by 30% year on year, and the user duration of small programs increased by more than 20% year on year. Video number, public account and applet advertisement have all become the new high-quality increment of the advertising sector.
In the first quarter of this year, Tencent's online advertising revenue grew 26% year-on-year to 26.5 billion yuan, and its financial technology and enterprise service revenue grew 7% year-on-year to 52.3 billion yuan.
At the same time, in the first quarter, Tencent's service revenue increased by more than ten points year-on-year. Tencent Cloud focused on self research and achieved new growth in commercialization. Among them, Tencent's cloud audio and video solutions have won more customers' favor in the media, entertainment and live broadcast industries at home and abroad. Enterprise WeChat and Tencent conferences also expanded the base of paying users through technology updates and continuous product upgrades.
The first quarter financial report shows that Fintech and Enterprise Services ("ToB Business" for short) achieved revenue of 52.302 billion yuan, up 7% year on year, accounting for 33% of the total revenue, accounting for more than 30% for 12 consecutive quarters. ToB Business continues to be the core engine for the steady growth of Tencent's business.
In addition, in terms of games, in the first quarter of this year, the game business in both the local market and the international market achieved year-on-year growth. Thanks to the strong performance of Supercell's games and the growth contribution of PUBG MOBILE, the international market turnover increased by 34% year on year.
Ma Huateng, Chairman of the Board of Directors and CEO of Tencent, said in the financial report that the total flow of games in the first quarter of this year had increased, laying the foundation for the resumption of growth of game revenue in the next few quarters.
Average daily repurchase exceeds HK $800 million
In order to enhance the return of investors, Tencent continued to promote the stock repurchase plan.
According to Tencent's first quarterly report, in the first three months of this year, Tencent bought back 51.04 million shares at a total cost of 14.8 billion Hong Kong dollars. After the share repurchases were cancelled, the daily average repurchase amount was 824 million Hong Kong dollars, a record high.
Tencent said in its first quarterly report that the company has stepped up repurchase efforts, implemented share repurchases of more than 100 billion Hong Kong dollars in 2024 as planned, increased dividends, and is committed to continuing to invest in AI technology, improve the platform and produce high-value content.
It is understood that Tencent's buyback amount in 2023 will be 49 billion Hong Kong dollars, more than the total buyback amount of the last decade. Previously, Tencent said in its 2023 annual report that it planned to at least double the size of Tencent's share buyback, from HK $49 billion in 2023 to over HK $100 billion in 2024.
Tencent said that Tencent's continued strong buyback in the past two years is not only a responsible feedback to investors, but also represents the recognition of the company's long-term value and confidence in its future prospects.
Under Tencent's continued aggressive buybacks, on April 19 this year, the CSRC issued five measures for capital market cooperation with Hong Kong, including relaxing the scope of qualified stock ETFs under the Shanghai Shenzhen Hong Kong Stock Connect, including REITs into the Shanghai Shenzhen Hong Kong Stock Connect, supporting the RMB stock trading counter to be included in the Hong Kong Stock Connect, optimizing mutual recognition arrangements for funds and supporting leading enterprises in the mainland industry to list on the Hong Kong Stock Exchange.
The CSRC's policies and measures effectively boosted the confidence of the Hong Kong stock market. Driven by many favorable policies, Tencent's share price rose sharply. On April 22 this year, Tencent's share price exceeded 320 Hong Kong dollars per share, with its total market value rising by about 156 billion Hong Kong dollars. After more than four months, Tencent returned to 3 trillion Hong Kong dollars, and continued to rise. On May 14, Tencent reported 381.8 Hong Kong dollars per share, with a total market value of 3596.4 billion Hong Kong dollars.
In addition, in terms of R&D investment, Tencent spent 15.678 billion yuan on R&D in the first quarter of this year.
