Financial

2022 Interim Report: Tencent

Published by Tencent

Summary

Tencent’s 2022 interim report details a period of significant financial recalibration characterized by a 53% year-on-year decline in profit attributable to equity holders for the first half of the year. Faced with a challenging domestic gaming environment and broader macroeconomic headwinds, the company recorded total revenue of RMB 269.5 billion. This downturn was primarily driven by reduced investment gains, increased operating expenses, and higher impairment provisions for investee companies, which collectively caused the net margin to contract from 34% to 16%. Despite these pressures, the company maintained a strong liquidity position, reporting cash and cash equivalents of RMB 184.7 billion as of June 30, 2022. Management responded to the revenue stagnation by implementing disciplined cost-management strategies and exiting non-core businesses, which facilitated a 10% sequential increase in non-IFRS profit during the second quarter. The company’s asset base saw a reduction, largely due to the distribution of JD.com shares to shareholders and a decrease in the fair value of equity investments, while total debt rose to RMB 336.3 billion. The report underscores a strategic shift toward operational efficiency and long-term growth in FinTech, cloud services, and Video Accounts. Governance and human capital management remained central to the company’s operations, evidenced by extensive share-based compensation schemes designed to retain talent across Tencent and its subsidiaries, including Riot Games and Tencent Music Entertainment. Furthermore, the company demonstrated a commitment to shareholder value through the repurchase of 18.6 million shares for approximately HKD 7.3 billion. Ultimately, the 2022 interim results reflect a transition period where the company prioritized structural optimization and portfolio rationalization to navigate a volatile regulatory and economic landscape.

From the report

CONTENTS CONTENTS 2 Corporate Information 2 Corporate Information 3 Financial Performance Highlights 3 Financial Performance Highlights 5 Chairman's Statement 5 Chairman’s Statement 9 Management Discussion and Analysis 23 Report on Review of Interim Financial Information 24 Consolidated Income Statement 25 Consolidated Statement of Comprehensive Income 26 Consolidated Statement of Financial Position 29 Consolidated Statement of Changes in Equity 29 Consolidated Statement of Changes in Equity 33 Consolidated Statement of Cash Flows 33 Consolidated Statement of Cash Flows 35 Notes to the Interim Financial Information 35 Notes to the Interim Financial Information 84 Other Information 84 Other Information 116 Definition Definition

Corporate Information Corporate Information DIRECTORS NOMINATION COMMITTEE PRINCIPAL PLACE OF BUSINESS DIRECTORS NOMINATION COMMITTEE IN HONG KONG PRINCIPAL PLACE OF BUSINESS Executive Directors Ma Huateng (Chairman) IN HONG KONG Ma Huateng (Chairman) Li Dong Sheng 29/F., Three Pacific Place Lau Chi Ping Martin Ian Charles Stone No. 1 Queen’s Road East Non-Executive Directors Yang Siu Shun Wanchai Non-Executive Directors Charles St Leger Searle Hong Kong Jacobus Petrus (Koos) Bekker REMUNERATION COMMITTEE CAYMAN ISLANDS PRINCIPAL Jacobus Petrus (Koos) Bekker REMUNERATION COMMITTEE CAYMAN ISLANDS PRINCIPAL Charles St Leger Searle Ian Charles Stone (Chairman) SHARE REGISTRAR AND Independent Non-Executive Directors Ian Charles Stone (Chairman) TRANSFER OFFICE Independent Non-Executive Directors Li Dong Sheng Suntera (Cayman) Limited Li Dong Sheng Jacobus Petrus (Koos) Bekker Jacobus Petrus (Koos) Bekker Suntera (Cayman) Limited Li Dong Sheng Suite 3204, Unit 2A Ian Charles Stone AUDITOR Suite 3204, Unit 2A AUDITOR Block 3, Building D Yang Siu Shun Block 3, Building D P.O. Box 1586 Ke Yang PricewaterhouseCoopers P.O.

n) Limited Li Dong Sheng Jacobus Petrus (Koos) Bekker Jacobus Petrus (Koos) Bekker Suntera (Cayman) Limited Li Dong Sheng Suite 3204, Unit 2A Ian Charles Stone AUDITOR Suite 3204, Unit 2A AUDITOR Block 3, Building D Yang Siu Shun Block 3, Building D P.O. Box 1586 Ke Yang PricewaterhouseCoopers P.O. Box 1586 Certified Public Accountants Gardenia Court AUDIT COMMITTEE Camana Bay PRINCIPAL BANKERS Grand Cayman, KY1-1100 Yang Siu Shun Cayman Islands (Chairman) Ian Charles Stone Bank of China Limited Charles St Leger Searle The Hongkong and Shanghai Banking HONG KONG BRANCH SHARE Corporation Limited REGISTRAR AND TRANSFER CORPORATE GOVERNANCE OFFICE COMMITTEE REGISTERED OFFICE COMMITTEE REGISTERED OFFICE Computershare Hong Kong Investor Computershare Hong Kong Investor Charles St Leger Searle (Chairman) Cricket Square Services Limited Charles St Leger Searle (Chairman) Services Limited Ian Charles Stone Hutchins Drive, P.O. Box 2681 Shops 1712-1716, 17th Floor Hutchins Drive, P.O. Box 2681 Shops 1712-1716, 17th Floor Yang Siu Shun Grand Cayman KY1-1111 Hopewell Centre Ke Yang Cayman Islands 183 Queen’s Road East Ke Yang Cayman Islands Wan Chai, Hong Kong INVESTMENT COMMITTEE TENCENT GROUP HEAD OFFICE Wan Chai, Hong Kong INVESTMENT COMMITTEE TENCENT GROUP HEAD OFFICE COMPANY WEBSITE Lau Chi Ping Martin (Chairman) Tencent Binhai Towers COMPANY WEBSITE Ma Huateng No. 33 Haitian 2nd Road www.tencent.com Charles St Leger Searle Nanshan District www.tencent.com Charles St Leger Searle Shenzhen, 518054 STOCK CODE The PRC Shenzhen, 518054 700 The PRC 700

HEAD OFFICE COMPANY WEBSITE Lau Chi Ping Martin (Chairman) Tencent Binhai Towers COMPANY WEBSITE Ma Huateng No. 33 Haitian 2nd Road www.tencent.com Charles St Leger Searle Nanshan District www.tencent.com Charles St Leger Searle Shenzhen, 518054 STOCK CODE The PRC Shenzhen, 518054 700 The PRC 700 2 TENCENT HOLDINGS LIMITED

> **[Chart page]** This page contains visual data — view in PDF for the best experience. Financial Performance Highlights Financial Performance Highlights SECOND QUARTER OF 2022 SECOND QUARTER OF 2022 Unaudited Three months ended Unaudited Quarter- 30 June 30 June Three months ended 31 March Year- Quarter- 30 June 30 June on-year 31 March on-quarter 2022 2021 change 2022 change (RMB in millions, unless specified) Revenues 134,034 138,259 -3% 135,471 -1% Revenues 134,034 138,259 -3% 135,471 -1% Gross profit 57,867 62,745 -8% 57,074 1% Gross profit 57,867 62,745 -8% 57,074 1% Operating profit 30,067 52,487 37,217 Operating profit 52,487 -43% 37,217 -19% Profit for the period 19,230 43,022 -55% 23,733 -19% Profit attributable to equity holders of the Company 18,619 42,587 -56% 23,413 -20% EPS (RMB per share) – basic 1.951 4.472 -56% 2.455 -21% – diluted 1.915 4.387 -56% 2.404 -20% Non-IFRS operating profit 36,667 42,802 -14% 36,538 0% Non-IFRS operating profit Non-IFRS profit attributable to Non-IFRS profit attributable to 28,139 equity holders of the Company 34,039 -17% 25,545 10% equity holders of the Company 28,139 34,039 -17% 25,545 10% Non-IFRS EPS (RMB per share) – basic 2.949 3.574 -17% 2.678 10% – diluted 2.896 3.504 -17% 2.620 11% -diluted 2.896 3.504 -17% 2.620 11% INTERIM REPORT 2022 3

> **[Chart page]** This page contains visual data — view in PDF for the best experience. Financial Performance Highlights Financial Performance Highlights FIRST HALF OF 2022 FIRST HALF OF 2022 Unaudited Six months ended Unaudited Year- Six months ended 30 June 30 June Year- 30 June 30 June on-year 2022 2021 change (RMB in millions, unless specified) Revenues 269,505 273,562 -1% Revenues 269,505 273,562 -1% Gross profit 114,941 125,380 -8% Gross profit 114,941 125,380 -8% Operating profit 67,284 Operating profit 108,760 -38% Profit for the period 42,963 92,030 -53% Profit attributable to equity holders of the Company 42,032 90,354 -53% EPS (RMB per share) – basic 4.407 9.492 -54% – diluted 4.320 9.299 -54% Non-IFRS operating profit 73,205 85,560 -14% Non-IFRS operating profit Non-IFRS profit attributable to equity holders of the Company 53,684 67,157 -20% Non-IFRS profit attributable to equity holders of the Company 53,684 67,157 -20% Non-IFRS EPS (RMB per share) – basic 5.628 7.055 -20% – diluted 5.516 6.916 -20% - diluted 5.516 6.916 -20% 4 TENCENT HOLDINGS LIMITED

Pages: 122
Words: 51,797
Type: Financial

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