TENCENT(HK:00700)2022-04-07 13:15Financial Performance - Tencent's revenue for the year ended December 31, 2021, was RMB 560.118 billion, an increase of 16.2% from the previous year[3] - The net profit attributable to equity holders for the same period was RMB 224.822 billion, representing a 41% increase year-over-year[6] - Basic and diluted earnings per share for the year were RMB 23.597 and RMB 23.164, respectively[6] - Non-IFRS net profit attributable to equity holders was RMB 123.788 billion, a 1% increase from the previous year[6] - Total assets as of December 31, 2021, amounted to RMB 1,612.364 billion, up from RMB 1,333.425 billion in 2020[4] - Total equity attributable to equity holders was RMB 806.299 billion, compared to RMB 703.984 billion in the previous year[4] - The company reported a total comprehensive income of RMB 200.390 billion for the year ended December 31, 2021[3] - Tencent's operating profit under non-IFRS was RMB 159.539 billion, reflecting a growth from RMB 149.404 billion in 2020[3] - Tencent's cash flow from operating activities for the year was RMB 300.000 billion, indicating strong operational performance[3] - Revenue for the year ended December 31, 2021, increased by 16% to RMB 560.12 billion compared to RMB 482.06 billion in 2020[22] - Gross profit for the year was RMB 245.94 billion, up from RMB 221.53 billion in the previous year[22] - Operating profit rose to RMB 271.62 billion, compared to RMB 184.24 billion in 2020[22] - Annual profit attributable to equity holders was RMB 224.82 billion, an increase from RMB 159.85 billion in 2020[22] Revenue Breakdown - Value-added services revenue grew by 10% to RMB 291.57 billion, with domestic game revenue increasing by 6% to RMB 128.80 billion[24] - Online advertising revenue increased by 8% to RMB 88.66 billion, with social and other advertising revenue up 11% to RMB 75.30 billion[25] - Financial technology and enterprise services revenue surged by 34% to RMB 172.20 billion, driven by increased commercial payment volumes[25] - In Q4 2021, the company's fintech and enterprise services revenue grew by 25% year-on-year to RMB 48 billion, driven by increased commercial payment volumes[39] Cost and Expenses - Cost of revenue for the year ended December 31, 2021, rose by 21% to RMB 314.174 billion, with the cost as a percentage of revenue increasing from 54% in 2020 to 56% in 2021[26] - The cost of value-added services increased by 14% to RMB 138.636 billion, primarily due to increased revenue-sharing costs related to live streaming services and higher content costs[27] - The cost of online advertising rose by 20% to RMB 48.072 billion, driven by increased server and bandwidth costs[27] - Financial technology and enterprise services saw a 32% increase in costs to RMB 120.799 billion, reflecting higher transaction costs due to increased payment volumes[27] - Selling and marketing expenses grew by 20% to RMB 40.6 billion, representing 7% of total revenue, remaining stable compared to the previous year[28] - General and administrative expenses increased by 33% to RMB 89.8 billion, with the percentage of revenue rising from 14% in 2020 to 16% in 2021[28] Shareholder Returns - The board proposed a final dividend of HKD 1.60 per share for the year ended December 31, 2021, consistent with the previous year[20] - The company repurchased 5,581,800 shares at a total cost of approximately HKD 2.599 billion during the year, with the aim of enhancing shareholder value[80] - The company declared a distribution of JD.com shares, which will reduce its beneficial ownership to approximately 2.3% post-distribution[62] Investment and Portfolio - As of December 31, 2021, the company's investment portfolio reached RMB 878.653 billion, up from RMB 690.886 billion on December 31, 2020, reflecting a significant increase[60] - The fair value of the company's equity in listed investment companies (excluding subsidiaries) was RMB 982.835 billion as of December 31, 2021[61] - The company recorded a return from its investment portfolio of RMB 120.305 billion for the year, representing a year-on-year growth of 123%[63] - The company plans to continue monitoring the performance of its investment portfolio and pursue strategic investments and acquisitions as market opportunities arise[63] Corporate Governance - The board of directors includes key executives such as Ma Huateng (Chairman) and Liu Chiping (President), who have extensive experience in the industry[171][175] - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring governance integrity[171] - The company has implemented a directors' and officers' liability insurance policy to provide appropriate protection for its board members[194] - There are no significant transactions or arrangements involving the company's directors or related entities that could impact the business[193] Employee Incentives - The company has a structured vesting schedule for share options, with 25% vesting annually after the first year[87] - The company continues to monitor and adjust its share option plans to align with market conditions and employee performance[88] - The company aims to attract, motivate, and retain qualified participants through these incentive plans[158] Market Position and Strategy - The company is actively involved in mergers and acquisitions, enhancing its market position and expanding its service offerings[175] - The company is focused on strategic planning and management, with a strong emphasis on technology and internet services[174] - The company is enhancing its advertising and smart retail business development, with a senior vice president responsible for strategic development and business synergy[187]