Tencent (TCEHY) Q3 2022 Earnings Call Transcript

For the period ending september 30, 2022

November 16, 2022 7:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Wendy Huang

Good day, and good evening. Thank you for standing by. Welcome to Tencent Holdings Limited 2022 Third Quarter Results Announcement Webinar. I'm Wendy Huang from Tencent IR team. At this time, all participants are in a listen-only mode. After management's presentation, there will be a question-and-answer session. [Operator Instructions] And 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. Let me now 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.

Huateng Ma

Thank you, Wendy. Good evening. Thanks, everyone for joining us. During the third quarter, we streamlined our cost and activate new revenue-generating services, returning to year-on-year earnings growth. We also delivered quarter-on-quarter earnings growth with some tailwind from positive seasonality. Total revenue was RMB 140 billion, down 2% year-on-year, but up 5% quarter-on-quarter. Gross profit was RMB 62 billion, down 1% year-on-year, but up 7% quarter-on-quarter. Non-IFRS operating profit was RMB 41 billion, flat year-on-year and up 12% quarter-on-quarter. Non-IFRS net profit attributable to equity holders was RMB 32 billion, up 2% year-on-year and 15% 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 QQ was 574 million. I will now hand over to Martin for strategic review.

Martin Lau

Thank you, Pony, and good evening and good morning to everybody. In last quarter's strategy review, I discussed how we have positioned ourselves to improve efficiencies, develop new revenue streams and to revive our profit growth. Today, I will update you on our progress and some early stage results. In addition, I will touch on our latest steps in returning capital to shareholders. Let's start off with the progress of our efficiency initiatives.