Tencent, China’s social media, games and streaming giant, unveiled solidly normal financial results for its year to December. It signaled damage to the Chinese economy from the coronavirus outbreak, but the group is expanding the range of business activities that can be done online.
Revenues, profits and dividend payouts for 2019 all increased by a fifth.Group revenue over 12 months was up 21% to $53.7 billion (RMB377 billion). Net profit was up 22% to $13.4 billion (RMB94.3 billion).The figures were closely in line with the mean forecasts of 59 financial analysts surveyed in a Bloomberg survey.
The company’s entertainment businesses were slowed by the side-effects of regulatory changes, which delayed the release of certain TV shows, but they mostly remain market leaders.
Tencent said that its WeChat platform increased users by 6% to 1.16 billion. Paying subscriber numbers grew by 12% to 180 million. That figure included 106 million for streaming service Tencent Video.
After being buffeted in 2018 by Chinese regulators who sought to slow down the games industry through delayed approvals, Tencent said that its emphasis in the sector has been on in-house development external partnerships, and expanding overseas business.
Highlights included strong performance from “PUBG Mobile” and “Call of Duty Mobile,” as well as the new Teamfight Tactics mode within “League of Legends.” The group claimed that international games revenues more than doubled year-on-year, and that at the end of 2019, five of the world’s top ten most-popular smart phone games, as measured by daily average users, were developed by Tencent group companies – it owns 100% of Riot Games, 84% of Supercell, 40% of Epic Games and 5% of Activision Blizzard.
“We experienced slower subscriber and revenue growth for our video subscription service in 2019 than 2018, reflecting delays in broadcasting key content. However our Tencent Video subscriptions reached 106 million, and we remained the clear industry leader in terms of content, users, and financial metrics, reducing our 2019 operating loss to below RMB3 billion ($427 million), substantially lower than the loss rates of industry peers,” Tencent said of its streaming business.
And in a bid to head off nimbler rivals such as Bytedance (Tiktok/Douyin) Tencent invested heavily in short video. Its Weishi app increased its DAU by 80% and daily uploads by 70% sequentially in the fourth quarter of 2019, Tencent said.
Tencent has been at the forefront of China’s high tech responses to the coronavirus. Its Tencent Health Code was the most used ePass for verifying health and travel history during the outbreak. It claimed 900 million users across more than 300 cities and a total of 8 billion visits.
Other moves saw: the group add 1,000 mini-programs on WeChat; Tencent Health used for real-time pandemic data, online consultation and AI-powered self-diagnosis; Wexin and Tencent News receive 600 million page views. Fortuitously, Tencent launched video-conferencing service Tencent Meeting in December and reached 10 million daily usage averages by February as the coronavirus forced more remote working.