Financial

Interim Results: Six Months Ended 30 June 2007

Summary

Tencent demonstrated robust financial and operational growth during the first half of 2007, characterized by a 21.5% year-over-year revenue increase to RMB 1.64 billion. Profitability remained strong, with the company reporting a net profit of RMB 624.7 million for the period. This performance was primarily fueled by significant gains in internet value-added services and a notable 54.7% surge in online advertising revenue. These core segments successfully offset the impact of a more challenging regulatory environment for mobile and wireless services, which necessitated stricter account security measures and resulted in a decline in mobile value-added service subscriptions. Operational expansion remained a central focus throughout the first half of the year, as the company grew its workforce to 3,296 employees and increased its issued share capital to 1.78 billion shares. Infrastructure investments and rising staff costs contributed to total expenses of approximately RMB 1.01 billion, yet the company maintained a healthy profit margin of 38.5% during the second quarter. The platform’s reach continued to scale, with registered instant messaging accounts climbing to 647.1 million and fee-based internet value-added service subscriptions rising by 16.7% to 17.5 million. Looking forward, the company is positioned to leverage seasonal summer demand and an expanded pipeline of new game launches to sustain its growth trajectory. Despite regulatory headwinds in the mobile sector, the firm maintains a stable corporate governance structure, with MIH QQ (BVI) Limited holding a 35.36% stake. By prioritizing the monetization of its massive user base and continuing to refine its equity-based incentive schemes, the organization remains focused on balancing aggressive business expansion with the operational demands of a rapidly evolving Chinese internet market.

From the report

Interim Report The Board of Directors (the “Board”) of Tencent Holdings Limited (the “Company”) is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the three and six months ended 30 June 2007. These interim results have been reviewed by PricewaterhouseCoopers, the auditors of the Company (the “Auditors”), in accordance with International Standard on Review Engagements 2410 “Review of interim financial information performed by the independent auditor of the entity” issued by the International Auditing and Assurance Standards Board, and by the Audit Committee of the Company. Condensed Consolidated Balance Sheet As at 30 June 2007 and 31 December 2006 Unaudited Audited 30 June 31 December 2007 2006 Note RMB’000 RMB’000 ASSETS Non-current assets Fixed assets 7 739,955 549,109 Construction in progress 7 49,994 14,462 Leasehold land and land use rights 7 9,916 10,018 Intangible assets 7 168,461 155,587 Held-to-maturity investments 8 76,155 – Tencent Deferred income tax assets 16 141,848 130,522 Available-for-sale financial assets 9 59,974 56,440 Holdings 1,246,303 916,138 Current assets Limited Inventories 1,776 2,466 Accounts receivable 10 491,821 399,337 Prepayments, deposits and 2007 other receivables 193,746 113,768 Financial assets held for trading 11 245,278 195,907 Interim Held-to-maturity investments 8 228,465 234,261 Term deposits with initial term of over three months 914,784 944,375 Report Cash and cash equivalents 1,839,775 1,844,320 3,915,645 3,734,434

sits and 2007 other receivables 193,746 113,768 Financial assets held for trading 11 245,278 195,907 Interim Held-to-maturity investments 8 228,465 234,261 Term deposits with initial term of over three months 914,784 944,375 Report Cash and cash equivalents 1,839,775 1,844,320 3,915,645 3,734,434 Total assets 5,161,948 4,650,572

Condensed Consolidated Balance Sheet (Continued) As at 30 June 2007 and 31 December 2006 Unaudited Audited 30 June 31 December 2007 2006 Note RMB’000 RMB’000 EQUITY Shareholders’ equity Share capital 12 194 192 Share premium 12 1,509,906 1,459,020 Share-based compensation reserve 12 158,892 118,078 Other reserves 86,469 80,925 Retained earnings 2,468,441 2,059,541 4,223,902 3,717,756 LIABILITIES Non-current liabilities Deferred income tax liabilities 16 22,337 16,821 Long term payable – 48,148 22,337 64,969 Current liabilities Accounts payable 82,836 38,934 Limited Other payables and accruals 14 432,077 444,387 Current income tax liabilities 52,282 47,472 Holdings Other tax liabilities 31,518 17,715 Deferred revenue 15 316,996 319,339 915,709 867,847 Tencent Total liabilities 938,046 932,816 Total equity and liabilities 5,161,948 4,650,572 Report Net current assets 2,999,936 2,866,587 Interim Total assets less current liabilities 4,246,239 3,782,725 On behalf of the board of directors of the Company 2007 Ma Huateng Zhang Zhidong Director Director The accompanying notes on pages 6 to 36 form an integral part of these Interim Financial Statements.

Condensed Consolidated Income Statement For the three and six months ended 30 June 2007 Unaudited Unaudited Three months ended Six months ended 30 June 30 June 2007 2006 2007 2006 Note RMB’000 RMB’000 RMB’000 RMB’000 Revenues Internet value-added services 546,235 462,260 1,048,022 898,798 Mobile and telecommunications value-added services 206,036 178,355 402,580 341,781 Online advertising 114,599 62,972 188,667 104,742 Others 1,146 1,394 1,808 4,965 868,016 704,981 1,641,077 1,350,286 Cost of revenues 18 (266,041) (199,035) (503,560) (374,728) Gross profit 601,975 505,946 1,137,517 975,558 Other gains, net 17 23,315 21,357 57,328 42,893 Selling and marketing expenses 18 (70,870) (74,838) (141,080) (154,586) General and administrative expenses 18 (192,017) (142,440) (363,994) (272,247) Operating profit 362,403 310,025 689,771 591,618 Tencent Finance costs, net 19 (16,690) (6,537) (29,195) (16,632) Profit before income tax 20 345,713 303,488 660,576 574,986 Holdings Income tax expenses (11,227) (35,599) (35,921) (57,397) Profit for the period 334,486 267,889 624,655 517,589 Limited Earnings per share for profit attributable to the equity holders of the Company 2007 during the period (expressed in RMB per share) Interim - basic 21 0.188 0.151 0.352 0.290 - diluted 21 0.183 0.147 0.341 0.282 Report The accompanying notes on pages 6 to 36 form an integral part of these Interim Financial Statements.

Condensed Consolidated Statement of Changes in Shareholders’ Equity For the six months ended 30 June 2007 Unaudited Share-based Share Share compensation Capital Statutory Retained capital premium reserve reserve reserves earnings Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2007 192 1,459,020 118,078 20,000 60,925 2,059,541 3,717,756 Profit for the period ––––– 624,655 624,655 Employees share option scheme: - value of employee services – – 40,814 ––– 40,814 - proceeds from shares issued 2 50,886 –––– 50,888 Profit appropriations to statutory reserves –––– 5,544 (5,544 ) – Dividend relating to 2006 (Note 22) ––––– (210,211) (210,211) Balance at 30 June 2007 194 1,509,906 158,892 20,000 66,469 2,468,441 4,223,902 Unaudited Share-based Share Share compensation Capital Statutory Retained Limited capital premium reserve reserve reserves earnings Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Holdings Balance at 1 January 2006 192 1,666,044 40,109 20,000 46,609 1,155,459 2,928,413 Profit for the period ––––– 517,589 517,589 Tencent Employees share option scheme: - value of employee services – – 33,804 ––– 33,804 - proceeds from shares issued 1 14,948 –––– 14,949 Report Repurchase and cancellation of shares (2 ) (241,076 ) –––– (241,078) Interim Profit appropriations to 14,316 (14,316 ) statutory reserves –––– – Dividend relating to 2005 ––––– (145,402) (145,402) 2007 Balance at 30 June 2006 191 1,439,916 73,913 20,000 60,925 1,513,330 3,108,275

– 14,949 Report Repurchase and cancellation of shares (2 ) (241,076 ) –––– (241,078) Interim Profit appropriations to 14,316 (14,316 ) statutory reserves –––– – Dividend relating to 2005 ––––– (145,402) (145,402) 2007 Balance at 30 June 2006 191 1,439,916 73,913 20,000 60,925 1,513,330 3,108,275 The accompanying notes on pages 6 to 36 form an integral part of these Interim Financial Statements.

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Type: Financial

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