TENCENT(00700)2023-11-15 08:30Revenue and Profitability - Revenue for the three months ended September 30, 2023, was RMB 154,625 million, representing a 10% year-over-year increase from RMB 140,093 million[1]. - Gross profit for the same period was RMB 76,523 million, a 23% increase compared to RMB 61,983 million in the previous year[1]. - Operating profit decreased by 6% year-over-year to RMB 48,475 million from RMB 51,593 million[1]. - Revenue for Q3 2023 increased by 10% year-over-year to RMB 154.625 billion, compared to RMB 140.093 billion in Q3 2022[45]. - Gross profit for Q3 2023 was RMB 76.523 billion, up from RMB 61.983 billion in Q3 2022, reflecting a significant increase in profitability[44]. - The company's net profit attributable to equity holders for Q3 2023 decreased by 9% to RMB 36.2 billion, while the non-IFRS net profit increased by 39% to RMB 44.9 billion[25]. - The company's profit attributable to equity holders for the three months ended September 30, 2023, was RMB 36,182 million, a decrease of 6.4% from RMB 39,943 million in the same period of 2022[167]. - The profit attributable to equity holders for the nine months ended September 30, 2023, was RMB 88,191 million, an increase of 7.4% compared to RMB 81,975 million in the same period of 2022[167]. Expenses and Costs - The cost of revenue for value-added services decreased by 4% year-on-year to RMB 33.7 billion, attributed to reduced costs related to music and game live streaming services[21]. - General and administrative expenses for Q3 2023 were RMB 26.3 billion, remaining stable year-on-year[24]. - Sales and marketing expenses increased by 11% year-over-year to RMB 7.912 billion, reflecting heightened promotional activities in gaming and long-form video content[50]. - Financial costs surged by 43% to RMB 2.784 billion, primarily due to a decline in foreign exchange gains and increased interest expenses[51]. - Income tax expenses rose by 55% to RMB 11.008 billion, driven by an increase in pre-tax profits and higher tax provisions[52]. - Research and development expenses for the three months ended September 30, 2023, amounted to approximately RMB 16,454 million, compared to RMB 15,082 million for the same period in 2022, reflecting an increase of 9.1%[115]. Cash Flow and Financial Position - The company recorded a net cash position of RMB 36.431 billion as of September 30, 2023, compared to a net debt position of RMB 27.271 billion a year earlier[32]. - The company reported a net cash position of RMB 1,035.2 billion as of September 30, 2023, compared to RMB 1,012.1 billion at the end of 2022[80]. - For the nine months ended September 30, 2023, net cash flow from operating activities was RMB 168,008 million, an increase from RMB 110,488 million in the same period of 2022, representing a growth of 52.1%[88]. - Net cash flow used in investing activities for the same period was RMB (117,157) million, compared to RMB (86,533) million in 2022, indicating a 35.3% increase in cash outflow[88]. - The total cash and cash equivalents at the end of the period decreased to RMB 146,476 million from RMB 160,177 million, a decline of 8.6%[88]. - The company’s net cash position increased to RMB 36.4 billion as of September 30, 2023, up from RMB 17.7 billion as of June 30, 2023, driven by strong free cash flow[99]. Investments and Assets - The fair value of listed investments (excluding subsidiaries) was RMB 464.4 billion, while the book value of unlisted investments was RMB 347.2 billion[100]. - The company’s investments in listed companies amounted to RMB 161,155 million as of September 30, 2023, compared to RMB 159,861 million as of December 31, 2022[176]. - The total investments in non-listed companies reached RMB 200,124 million as of September 30, 2023, up from RMB 187,502 million in the previous year, indicating a growth of about 6.9%[197]. - The company made new investments and additional investments totaling approximately RMB 44.796 billion in financial assets measured at fair value through profit or loss for the nine months ended September 30, 2023[175]. Shareholder Returns and Equity - The company declared a final dividend of HKD 2.40 per share for the year ended December 31, 2022, totaling HKD 22.762 billion, compared to HKD 15.260 billion in 2022[168]. - The company’s diluted earnings per share for Q3 2023 was RMB 2.695, compared to RMB 3.875 for the same period last year[72]. - The company’s basic earnings per share for the nine months ended September 30, 2023, was RMB 9.312, an increase of 8.3% from RMB 8.595 in the same period of 2022[144]. - Total equity attributable to the company's equity holders increased to RMB 768,514 million as of September 30, 2023, compared to RMB 721,391 million at the end of 2022, reflecting a growth of approximately 6.5%[82]. Regulatory and Compliance - The company incurred a penalty of approximately RMB 2,990 million related to regulatory non-compliance in July 2023, which was accounted for in the financials for the three months ended September 30, 2023[114]. - The financial data presented is unaudited but has been reviewed by auditors, ensuring a level of reliability in the reported figures[92]. - The company adopted new accounting standards effective January 1, 2023, including IFRS 17 for insurance contracts and amendments to IAS 1 regarding accounting policy disclosures[94].