TENCENT(00700)2023-04-06 14:08Financial Performance - The company's audited profit attributable to equity holders for the year ended December 31, 2022, was RMB 188.243 billion, a decrease of 16% compared to the previous year[7]. - The basic and diluted earnings per share for the year ended December 31, 2022, were RMB 19.757 and RMB 19.341, respectively[7]. - The company's non-IFRS profit attributable to equity holders for the year ended December 31, 2022, was RMB 115.649 billion, a decrease of 7% compared to the previous year[7]. - For the fiscal year ending December 31, 2022, total revenue was RMB 554,552 million, a slight decrease from RMB 560,118 million in 2021[31]. - The operating profit for the fiscal year 2022 was RMB 235,706 million, down from RMB 271,620 million in 2021[31]. - Revenue for the year ended December 31, 2022, decreased by 1% year-on-year to RMB 554.52 billion[32]. - Value-added services revenue for the year ended December 31, 2022, decreased by 1% to RMB 287.65 billion, with international game revenue growing by 3% to RMB 46.8 billion[32]. - Online advertising revenue for the year ended December 31, 2022, decreased by 7% to RMB 82.7 billion, with social and other advertising revenue down 4% to RMB 72 billion[36]. - Financial technology and enterprise services revenue for the year ended December 31, 2022, increased by 3% to RMB 177.1 billion[36]. - The company's profit attributable to equity holders decreased by 16% year-on-year to RMB 188.2 billion for the year ended December 31, 2022[43]. User Engagement and Growth - The combined monthly active accounts for WeChat and WeChat reached 1,313.2 million, representing a year-on-year increase of 3.5%[8]. - The number of QQ mobile terminal monthly active accounts was 572.1 million, a year-on-year increase of 3.6%[8]. - The paid membership for video subscriptions slightly decreased to 119 million due to content scheduling delays, despite an increase in revenue from adjusted pricing[12]. - The trading volume on mini-programs reached several trillion RMB in 2022, contributing to the development of the real economy[11]. - In 2022, the company implemented a leading minor protection program, significantly reducing gaming time for minors while maintaining market leadership, with "Honor of Kings" achieving year-on-year growth in daily active accounts in Q4 2022[13]. Advertising and Revenue Streams - In Q4 2022, the company restored year-on-year growth in online advertising revenue, with over one-third of WeChat advertising revenue coming from ads directing traffic to merchant WeChat and mini-programs[16]. - The revenue from value-added services in Q4 2022 decreased by 2% year-on-year to RMB 70.417 billion, while online advertising revenue grew by 15% to RMB 24.660 billion[49]. - The average daily commercial payment amount showed a recovery with double-digit year-on-year growth since Q1 2023, benefiting from the vitality of the mini-program ecosystem, which contributed over 10% to commercial payment amounts in Q4 2022[17]. Cost Management and Investments - The company is focusing on optimizing costs and reducing losses in its cloud and enterprise services, while investing in healthier profit margin self-developed PaaS solutions[18]. - The company is investing in artificial intelligence capabilities and cloud infrastructure to enhance existing products and explore new offerings[19]. - The cost of revenue for the year ended December 31, 2022, increased by 1% to RMB 315.8 billion, representing 57% of total revenue[35]. - Sales and marketing expenses for the year ended December 31, 2022, decreased by 28% to RMB 29.2 billion, accounting for 5% of total revenue[38]. - General and administrative expenses for the year ended December 31, 2022, increased by 19% to RMB 106.7 billion, representing 19% of total revenue[39]. Shareholder Returns and Dividends - The board proposed a final dividend of HKD 2.40 per share for the year ended December 31, 2022, compared to HKD 1.60 per share in 2021, pending shareholder approval[27]. - The company repurchased a total of 107,083,000 shares at a total cost of approximately HKD 33.8 billion during the fiscal year, aimed at enhancing long-term shareholder value[108]. - The company's distributable reserves as of December 31, 2022, were RMB 82.562 billion, an increase from RMB 66.701 billion in 2021[98]. Debt and Cash Flow - The company's net debt stood at RMB 14.832 billion as of December 31, 2022, compared to RMB 27.271 billion as of September 30, 2022[87]. - The group generated free cash flow of RMB 23.1 billion in Q4 2022, with net cash flow from operating activities amounting to RMB 35.6 billion, offset by capital expenditures of RMB 5.6 billion, media content payments of RMB 5.3 billion, and lease liability payments of RMB 1.6 billion[89]. - The total amount of debt as of December 31, 2022, includes borrowings and payables, with details provided in the consolidated financial statements[89]. Stock Options and Incentives - The company has adopted five stock option plans, with no unexercised options remaining under the plans that expired by December 31, 2022[116]. - The total number of stock options granted in 2022 was 93,338,573, with 12,778,815 options exercised and 6,806,825 options expired or forfeited[139]. - The company plans to continue expanding its stock option program to incentivize employee performance and retention[130]. - The total number of shares granted in 2022 reached approximately 40 million, showcasing robust employee incentive programs[184]. Leadership and Governance - The company is led by key executives including Ma Huateng as CEO and Liu Chiping as President, with extensive experience in the telecommunications and internet sectors[194][195]. - The board comprises a diverse group of experienced individuals, contributing to the company's strategic planning and management[194][195][197][198][199]. - The board is set to rotate directors at the 2023 annual general meeting, with Liu Chiping not seeking re-election[192].