Tencent (TCEHY)Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

August 17, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Wendy Huang

Good day, and good evening. Thank you for standing by. Welcome to Tencent Holdings Limited 2022 Second Quarter Results Announcement Webinar. I'm Wendy Huang from Tencent IR team. [Operator Instructions] Please be advised that today's webinar is being recorded.

Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of Tencent. This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for measures of the group's financial performance prepared in accordance with IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website.

Now let me introduce the management team on the webinar tonight. Our Chairman and CEO, Pony Ma, will kick off with a short overview. President, Martin Lau will discuss strategy review. Chief Strategy Officer, James Mitchell, will provide a business review. Chief Financial Officer, John Lo, will conclude with financial discussion before we open the floor for questions.

I will now pass it to Pony.

Pony Ma

Thank you, Wendy. Good evening. Thanks, everyone, for joining us. During the second quarter, we actively exit noncore businesses, our marketing spending and changing the operating expenses. This enabled us to sequentially increase our earnings despite difficult revenue conditions. Total revenue was RMB 134 billion, down 3% year-on-year and 1% quarter-on-quarter. Gross profit was RMB 58 billion, down 8% year-on-year, but up 1% quarter-on-quarter. Non-IFRS operating profit was RMB 37 billion, down 14% year-on-year, but up 0.4% quarter-on-quarter. Non-IFRS net profit attributable to equity holders was RMB 28 billion, down 17% year-on-year, but up 10% quarter-on-quarter.

For our key services, we generally became our first-place positions in activities, including social games, long-form video, news, music, literature, payment and mobile browser. Combined MAU of Weixin and WeChat was $1.3 billion. Mobile devices MAU of 2Q was 569 million.

Before I hand over to Martin, I would like to welcome Professor John as a new Director and a member of Corporate Governance Committee. Broadening our Board's independence, gender diversity and areas of expertise.

With that, I hand over to Martin for a strategic review.