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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            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