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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        billion, displacing Facebook as fifth most valuable global company. This growth has been highlighted by the        year-on-year (YoY) increase in revenue from        billion in 2016 to        billion in 2017. However, Tencent missed analyst revenue estimates for        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        of its        stake in March 2018, paints a mixed picture. 

Key Findings

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