Tencent Has Outgrown China Now Comes The Next Phase of Growth
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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 by from billion in 2016 billion in 2017
- Mobile video active users (DAU) increased by from million in 2016 to in 2017
- Value added subscriptions grew by from million 2014 to million in 2017, driven by video and music
- VAS revenue YoY from billion in 2016 billion in 2017
- Tencent is first Chinese company to achieve market capitalisation of over billion
- Total operating increased from billion in 2016 billion in 2017, up
- Revenues increased from 2016 to 2017, but slipped from to and have steadily decreasing quarterly since 2015
- Other revenues by from billion in 2016 billion in 2017, driven largely payment services
- Majority shareholder made a ROI from an million investment for in 2001
- Naspers current is worth billion
Companies and brands mentioned in this report: Alibaba, Amazon, Baidu, Facebook, Gaana, Google, iMessage, Naspers, Netflix, QQ, Spotify, Tencent, WeChat