2021-04-08 13:36Financial Performance - Tencent's audited profit attributable to equity holders for the year ended December 31, 2020, was RMB 159.847 billion, an increase of 71% compared to the previous year[12]. - The basic and diluted earnings per share for the year ended December 31, 2020, were RMB 16.844 and RMB 16.523, respectively[12]. - Tencent's total revenue for the year ended December 31, 2020, was RMB 482.064 billion, reflecting significant growth from previous years[10]. - Tencent's revenue for the year ended December 31, 2020, increased by 28% year-on-year to RMB 482.064 billion[29]. - The gross profit for the same period was RMB 221.532 billion, compared to RMB 167.533 billion in 2019, reflecting a significant increase[28]. - The operating profit rose to RMB 184.237 billion, up from RMB 118.694 billion in the previous year[28]. - The net profit attributable to equity holders of the company was RMB 159.847 billion, compared to RMB 93.310 billion in 2019, marking a substantial growth[28]. - Non-IFRS profit attributable to equity holders for the year ended December 31, 2020, was RMB 122.742 billion, an increase of 30% year-on-year[12]. - In Q4 2020, total revenue grew by 26% year-on-year to RMB 133.7 billion, with online games contributing RMB 39.1 billion, a 29% increase[37]. - The revenue from the fintech and enterprise services business in Q4 2020 increased by 29% year-on-year to RMB 38.5 billion, driven by higher transaction volumes and amounts[38]. User Engagement and Growth - The number of WeChat and Weixin combined monthly active accounts reached 1.225 billion, a year-on-year increase of 5.2%[13]. - The number of QQ smart terminal monthly active accounts was 594.9 million, a decrease of 8.1% year-on-year[13]. - The registered accounts for paid value-added services increased to 219.5 million, representing a year-on-year growth of 21.9%[13]. - The number of paid value-added service accounts increased by 22% year-on-year to 219 million, with video subscription service members reaching 123 million, benefiting from popular anime IPs and series launches[19]. - The company reported a significant increase in user engagement, with a 25% year-over-year growth in active users across its platforms[140]. Revenue Segments - The value-added services segment generated RMB 264.212 billion in revenue, accounting for 55% of total revenue, with a 32% year-on-year increase[30]. - The online advertising revenue grew by 20% to RMB 82.271 billion, driven by increased demand from education and e-commerce sectors[31]. - The financial technology and enterprise services segment's revenue increased by 26% to RMB 128.086 billion, reflecting an expanded user base and business scale[31]. - The revenue from the online advertising business in 2020 increased by 15% year-on-year to RMB 40 billion, primarily due to increased traffic acquisition and server costs, partially offset by a decrease in content costs for variety shows and sports events[34]. Expenses and Costs - Sales and marketing expenses for the year ended December 31, 2020, increased by 58% year-on-year to RMB 33.8 billion, reflecting higher marketing spend for online games and recent mergers[35]. - General and administrative expenses for the year ended December 31, 2020, rose by 27% year-on-year to RMB 67.6 billion, driven by increased R&D and employee costs[35]. - The revenue cost for the fintech and enterprise services business in 2020 grew by 24% year-on-year to RMB 91.8 billion, driven by increased transaction costs due to higher total payment amounts and rising server costs from cloud service expansion[34]. Investments and Acquisitions - As of December 31, 2020, the company's investment portfolio reached RMB 690.886 billion, an increase of 57% from RMB 439.551 billion on December 31, 2019[56]. - The company recorded a return from its investment portfolio of RMB 54.015 billion for the year, representing a year-on-year growth of 288%[57]. - The company plans to continue monitoring the performance of its investment portfolio and pursue strategic investments and acquisitions[57]. - A strategic acquisition is in progress, which is anticipated to enhance the company's capabilities in cloud services[141]. Corporate Governance - The board emphasizes the importance of effective corporate governance to enhance long-term value for investors[176]. - The company has adhered to the corporate governance code throughout the year ending December 31, 2020, with some deviations noted[177]. - The board consists of nine members, including two executive directors, two non-executive directors, and five independent non-executive directors, with no changes in composition as of December 31, 2020[192]. - The company has established five committees to assist in governance, including the Audit Committee and the Corporate Governance Committee[181]. - The company is committed to maintaining high standards of corporate governance and compliance with legal regulations[182]. Environmental and Social Responsibility - The company announced its commitment to carbon neutrality and is exploring renewable energy solutions in its operations[22]. - The company has connected over 16,000 villages and 2.5 million villagers through its "For Village" initiative to promote rural revitalization[24]. - The company made donations totaling RMB 2.6 billion during the year[65]. Stock Options and Employee Compensation - The total employee compensation cost for the year ended December 31, 2020, was RMB 69.638 billion, an increase from RMB 53.123 billion in 2019[171]. - The company has adopted five stock option plans, with a total of 20,122,195 unexercised stock options as of December 31, 2020[73]. - The total number of stock options granted during the year was 91,374,613, with 4,919,174 exercised and 10,656,921 expired or forfeited[77]. - The company aims to attract top talent and reward contributions through its stock option plans[88]. Regulatory and Compliance Issues - The company is subject to regulatory scrutiny regarding its operational structure, which may affect its business operations in the future[155]. - The company’s ability to operate in the Chinese market is contingent upon compliance with local laws, which may evolve and introduce new challenges[155]. - The company confirmed that no dividends or distributions were made to shareholders during the financial period, and the terms of any new framework agreements are fair and reasonable for the group[158].