- VAS Rev ¥75b +8% ↗️
- Domestic Game Rev ¥34b +5% ↗️
- Int Game Rev ¥11b +20% ↗️⭐️
- Social Network Rev ¥30b +7% ↗️
- Online Ad Rev ¥23b +5% ↗️
- Social Ad ¥19b +7% ↗️
- Media Ad ¥4b -4% ↘️
- FinTech Rev ¥43b +30% ↗️⭐️
Operating Metrics 📶
- MAU (Weixin & WeChat) 1.3b +4% ↗️ +1%QoQ ↗️
- VAS Subs 235m +10% ↗️ +2%QoQ ↗️
- Mobile MAU (QQ) 574m -7% ↘️ -3% QoQ ↘️
⭐️ Invested Shareholdings ¥1,197bn ($185bn) now ~¼ of mkt cap, with $MPNGY, $SE, $PDD, $JD ~60% of that.
1 | Key Focus Areas
- Proactively embrace new reg environment
- Commit to common prosperity initiatives, contributing to society
- More sustainable development path
- Comply with new regs significantly reducing minors’ game time & spent, fostering healthier gameplay environment
2 | Minors are insignificant now…
- Time Spent: 0.7% in Sep21 ↘️ from 6.4% in Sep20.
- Gross Receipts: 1.1% in Sep21 ↘️ from 4.8% in Sep20.
3 | Soft Advertising - Soft still, rebase in 2022…⤴️
“We expect advertising pricing industry wide may remain soft for several quarters due to macro challenges and regulations affecting certainty advertising sectors.
3 | Soft Advertising - Soft still, rebase in 2022…⤴️
“We believe the advertising industry should adjust and rebase during 2022 then resume growth, the secular growth drives reassert themselves.”
4 | Strong Growth in FinTech due to ↗️ Payment Volume
“Within fintech services YoY revenue growth was mainly driven by increased commercial payment volume with healthy growth in categories such as groceries, power and transportation, commercial payment…”
5 | Tencent to return back to double digit growth in 2022?
6 | Tencent - Truly a business with solid long-term profitability 💪🏻
7 | With -35% decline from ATH, perhaps Tencent share price is looking oversold relative to its strong business fundamentals? 🤔
Love this chart of rising revenues, profits and share price btw 📈.
“In the ST, Mr Market is a voting machine,
in the LT it is a weighing machine.”
Final Takeaways on Tencent $TCEHY:
➡️ Still doing fine. Smaller reg headwinds, next few quarters to stay soft, likely rebase in 2022 for reacceleration. Combination of growth, profitability, optionality and the strong moat of network effects. Investment thesis remains unchanged.
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- Active Customers 16.8m +20% ↗️ -2%QoQ ↘️
- Active Customers >+20% for 15th quarter ✅
- Net Rev per Active Customer $276 +23% ↗️
- Spend +25% for every customer cohort ✅
- Purchasing categories >6 doubled vs 2y ago ✅
1 | Attractive Korean Market Opportunity
- Users: 37m active internet shoppers vs 16.8m active customers (~2X from here)
- Market: Korea 3rd largest e-commerce ($200bn by 2024) in the world after US and China. growing twice as fast (+20%YoY) as total retail (+10%YoY)
- Billable Tests 2.2m >2X 🚀 +38% QoQ ↗️
- Average COGS / Test ~$20 ↘️ (vs $23 in 2Q21) 💪🏻
1 | Continues to benefit massively from COVID near-term
“While our COVID-19 testing solutions continue to drive strong cash generation…could have unpredictability…will turn passively as the therapeutic treatment may become available in the near future.”