Financial

Interim Report 2009: Tencent Holdings Limited

Published by Tencent

Summary

Tencent Holdings Limited demonstrated exceptional financial performance during the first half of 2009, characterized by robust revenue growth and a significant expansion of its user base. Total revenues reached RMB 5.38 billion, representing a 77.5% increase over the same period in 2008, while profit attributable to equity holders rose to RMB 2.23 billion. This growth was primarily fueled by the strong performance of Internet value-added services, mobile telecommunications, and online advertising. Specifically, the successful monetization of licensed online games such as DNF and Cross Fire served as a primary catalyst for second-quarter gains, helping the company maintain a healthy net margin of 41.8% despite rising operational costs associated with bandwidth, revenue sharing, and research and development. The company’s operational scale grew in tandem with its financial success, with active user accounts reaching 448 million by June 2009. To support this trajectory, the workforce expanded to 6,421 employees, leading to increased remuneration costs. Management maintained a disciplined approach to capital structure and liquidity, ending the period with RMB 4.06 billion in cash and cash equivalents and a stable gearing ratio of 31%. While the broader economic environment remained challenging, the company demonstrated strategic foresight by prioritizing long-term content quality, opting to delay the launch of two in-house massively multiplayer online games until 2010. Corporate governance and shareholder value remained central to the company’s strategy throughout this period. Tencent continued to utilize share-based compensation schemes, including a 15-year extension of its Share Award Scheme, to incentivize staff and align employee interests with long-term growth. Furthermore, the company actively managed its equity through share repurchases and the exercise of options, while maintaining transparent reporting on tax obligations and financial liabilities. With major shareholders like MIH China (BVI) Limited providing stable backing, the company concluded the first half of 2009 in a strong position to navigate future market demands.

From the report

Tencent Holdings Limited Incorporated in the Cayman Islands with limited liability EBR A (Stock Code1700) QQ.com Interim Report 2009 # # smart communication inspires

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 2009. 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 (the “Audit Committee”), comprising a majority of the independent non-executive directors of the Company. Consolidated Statement of Financial Position As at 30 June 2009 Unaudited Audited 30 June 31 December Tencent 2009 2008 Note RMB’000 RMB’000 ASSETS Non-current assets Holdings Fixed assets 6 1,703,614 1,165,048 Construction in progress 6 554,982 875,897 Investment properties 6 32,034 64,981 Leasehold land and land use rights 6 35,671 36,046 Limited Intangible assets 6 316,682 370,314 Investment in associates 7 324,429 302,712 Deferred income tax assets 19 302,599 334,164 Held-to-maturity investments 8 341,595 – Interim Available-for-sale financial assets 89,087 86,180 Prepayments, deposits and other receivables 10 93,129 124,354 Report 3,793,822 3,359,696

ts 6 316,682 370,314 Investment in associates 7 324,429 302,712 Deferred income tax assets 19 302,599 334,164 Held-to-maturity investments 8 341,595 – Interim Available-for-sale financial assets 89,087 86,180 Prepayments, deposits and other receivables 10 93,129 124,354 Report 3,793,822 3,359,696 Current assets 2009 Inventories 1,378 5,483 Accounts receivable 9 1,194,668 983,459 Prepayments, deposits and other receivables 10 410,800 378,340 Financial assets held for trading 8 – 329,804 Held-to-maturity investments 8 – 68,346 Term deposits with initial term of over three months 11 3,380,260 1,662,501 Cash and cash equivalents 12 4,061,022 3,067,928 9,048,128 6,495,861 Total assets 12,841,950 9,855,557

Consolidated Statement of Financial Position (Continued) As at 30 June 2009 Unaudited Audited 30 June 31 December 2009 2008 Note RMB’000 RMB’000 EQUITY Equity attributable to the Company’s equity holders Share capital 13 196 195 Share premium 13 1,163,452 1,155,209 Shares held for share award scheme 13 (46,232) (21,809) Share-based compensation reserve 13 485,139 381,439 Other reserves (431,621) (433,038) Retained earnings 7,610,759 5,938,930 Limited Minority interests in equity 8,781,693 7,020,926 102,894 98,406 Total equity 8,884,587 7,119,332 Holdings LIABILITIESliabilities Non-current Deferred income tax liabilities 19 73,365 78,368 Long-term payables 17 553,429 566,260 Tencent Current liabilities 15 626,794 644,628 Accounts payable 637,101 244,647 2009 Other payables and accruals 16 1,115,966 1,013,542 Current income tax liabilities 148,274 47,307 Report Other tax liabilities 112,566 103,933 Deferred revenue 18 1,316,662 682,168 Interim liabilities 3,330,569 2,091,597 Total 3,957,363 2,736,225 Total equity and liabilities 12,841,950 9,855,557 Net current assets 5,717,559 4,404,264 Total assets less current liabilities 9,511,381 7,763,960 On behalf of the board of directors of the Company Ma Huateng Zhang Zhidong Director Director The accompanying notes on pages 6 to 52 form an integral part of this Interim Financial Information.

Pages: 92
Words: 23,638
Type: Financial

Topics

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Consolidated Statement of Comprehensive Income For the three and six months ended 30 June 2009 Unaudited Unaudited Three months ended Six months ended 30 June 30 June 2009 2008 2009 2008 Note RMB’000 RMB’000 RMB’000 RMB’000 Revenues Internet value-added services 2,156,468 1,037,042 4,061,031 2,035,775 Mobile and telecommunications value-added services 470,003 338,311 909,548 626,602 Online advertising 243,044 222,790 389,607 367,370 Others 8,908 1,635 22,602 2,942 2,878,423 1,599,778 5,382,788 3,032,689 Cost of revenues 21 (934,613) (453,069) (1,720,527) (841,534) Gross profit 1,943,810 1,146,709 3,662,261 2,191,155 Tencent Other gains, net 20 25,328 25,855 24,557 73,303 Selling and marketing expenses 21 (114,587) (100,212) (212,692) (186,146) General and administrative expenses 21 (455,629) (307,059) (910,647) (575,701) Holdings Operating profit 1,398,922 765,293 2,563,479 1,502,611 Finance costs 22 (653) (40,918) (405) (135,384) Share of profit/(losses) of associates 3,452 (1,558) 8,824 (1,558) Limited Profit before income tax 1,401,721 722,817 2,571,898 1,365,669 Income tax expense 23 (199,973) (70,618) (316,540) (171,458) Profit/Total comprehensive Interim income for the period 1,201,748 652,199 2,255,358 1,194,211 Attributable to: Report Equity holders of the Company 1,192,410 643,979 2,227,850 1,178,357 Minority interests 9,338 8,220 27,508 15,854 1,201,748 652,199 2,255,358 1,194,211 2009 Earnings per share for profit attributable to equity holders of the Company during the period (expressed in RMB per share) - basic 24 0.662 0.359 1.239 0.657 - diluted 24 0.647 0.349 1.213 0.639

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