2024-05-14 16:03Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was RMB 160 billion, up 6% year-on-year and 3% quarter-on-quarter [7] - Gross profit increased to RMB 84 billion, up 23% year-on-year and 8% quarter-on-quarter [7] - Non-IFRS operating profit rose to RMB 59 billion, up 30% year-on-year and 19% quarter-on-quarter [7] - Non-IFRS net profit attributable to equity holders was RMB 50 billion, up 54% year-on-year and 18% quarter-on-quarter [7][24] - Diluted EPS increased to RMB 4.386, up 66% year-on-year [24] Business Line Data and Key Metrics Changes - Value-Added Services (VAS) represented 49% of total revenue, with social networks at 19%, domestic games at 22%, and international games at 8% [9] - Online advertising revenue was RMB 26.5 billion, up 26% year-on-year [18] - Fintech and business services revenue was RMB 52 billion, up 7% year-on-year [20] - Domestic games revenue decreased by 2% year-on-year to RMB 35 billion, while international games revenue increased by 3% year-on-year to RMB 14 billion [12][13] Market Data and Key Metrics Changes - Combined MAU of Weixin and WeChat groups grew to 1.36 billion [8] - Video accounts user time spent grew 80% year-on-year [15] - Mini games gross receipts increased by 30% year-on-year [15] - Tencent Cloud media services achieved over 50% year-on-year revenue growth [21] Company Strategy and Development Direction - The company is focused on returning excess capital to shareholders through a buyback plan of over HK 100 billion in 2024 and increased dividends [6] - Investments are being made in AI technology, platform enhancements, and high production value content [6] - The strategy includes rejuvenating key game titles and leveraging AI for better user engagement and ad targeting [31][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of game revenues and the effectiveness of proactive adjustments made to key titles [6][12] - The operating environment remains mixed, with advertising sentiment being challenging but expected to improve [37] - The company anticipates continued growth in high-margin revenue streams and a positive mix shift in business segments [40][50] Other Important Information - The overall gross margin improved to 53%, up seven percentage points year-on-year [25] - Free cash flow was RMB 51.9 billion, stable year-on-year and up 52% quarter-on-quarter [28] - The company is investing heavily in AI and SaaS products, with WeCom revenue tripling year-on-year [22][60] Q&A Session Summary Question: Online games rejuvenation strategy and buyback pace - Management highlighted the ongoing rejuvenation of key games and the importance of team adjustments for success [31][32] - Buyback strategy remains consistent regardless of share price fluctuations, as the current price is still considered attractive [33] Question: Advertising business momentum and market share - Management noted mixed advertiser sentiment but expects to gain market share through ad tech upgrades and AI deployment [37][38] Question: Gaming revenue growth and App Store revenue-sharing - Deferred revenue growth is a positive indicator for future gaming revenue, with no significant risks identified [44][45] Question: New game launch strategy - The focus is on fewer but higher-quality new games, with metrics like player engagement being prioritized over initial hype [48][49] Question: Wealth management strategy and investment - The strategy involves building trust in the payment platform and increasing the number of use cases for wealth management services [63]