Reports Media & Marketing

Tencent Has Outgrown China Now Comes The Next Phase of Growth

Report by Alistair Taylor
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The 20,000 Foot View: Following the release of its fourth quarter earnings, Tencent is the first Chinese company to achieve a market capitalisation of over XXX billion, displacing Facebook as fifth most valuable global company. This growth has been highlighted by the XXX year-on-year (YoY) increase in revenue from XXX billion in 2016 to XXX billion in 2017. However, Tencent missed analyst revenue estimates for XXX 2017. This combined with the concerns for rising ecosystem investments, rising overall costs, and a slowdown in monthly active user (MAU) growth and biggest shareholder Naspers selling off XXX of its XXX stake in March 2018, paints a mixed picture. 

Key Findings

  • Annual revenue increased by XXX from XXX billion in 2016 to XXX billion in 2017 
  • Mobile video daily active users (DAU) increased by XXX YoY from XXX million in 2016 to XXX million in 2017
  • Value added services subscriptions grew by XXX from XXX million in 2014 to XXX million in 2017, mainly driven by video and music 
  • VAS revenue increased XXX YoY from XXX billion in 2016 to XXX billion in 2017
  • Tencent is the first Chinese company to achieve a market capitalisation of over XXX billion
  • Total operating costs increased from XXX billion in 2016 to XXX billion in 2017, up XXX increased by XXX from 2016 to 2017, but margins slipped from XXX to XXX and have been steadily decreasing quarterly since XXX 2015
  • Other revenues increased by XXX from XXX billion in 2016 to XXX billion in 2017, driven largely by payment services
  • Majority shareholder Naspers, made a XXX ROI from an initial XXX million investment for XXX in 2001
  • Naspers current XXX stake is worth XXX billion

Companies and brands mentioned in this report: Alibaba, Amazon, Baidu, Facebook, Gaana, Google, iMessage, Naspers, Netflix, QQ, Spotify, Tencent, WeChat

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