The three major businesses continue to be under pressure, and Tencent's bitter days have not been finished

Produced ｜ Pai Finance

Text ｜ Xin Youji Editor | Paid Son

In selling the public opinion of Meituan, Tencent made a second quarterly report of "Miscellaneous".

At the beginning of August, Tencent Holding Stocks once explored HK $ 288/share, which made many shareholders lament that they returned to 5 years ago, which was close to HK $ 750 a year ago. About 4.4 trillion Hong Kong dollars (about 3.79 trillion yuan).

The most reason for the stock market performance is to be attributed to Tencent's not optimistic performance and expectations. According to the synthesis of various securities firms, Tencent's second -quarter revenue generally predicted that it was about 130 billion yuan, a year -on -year decrease of about 4%, and net profit generally predicted that it would be around 25 billion yuan, down about 26%.

The Tencent Financial Report, which was just released, confirmed the forecast of the institutions. The second quarter report showed that Tencent's total revenue in the second quarter was 134 billion yuan, a year -on -year decrease of 3%; net profit was 18.6 billion yuan, a year -on -year decrease of 56%. After the adjustment, net profit was 28.1 billion yuan, a year -on -year decrease of 17%.

It can be seen that Tencent's fourth consecutive quarter of net profit declined. Although the decline is slightly better than market expectations, the decline is still very obvious. This may mean that Tencent's old performance engine has no dived. It did not really open.

01. The game business is still arrears

In the entire financial report, the pressure is undoubtedly the keywords of Tencent in the second quarter, especially the value -added service business. The financial report shows that the income of the business in this quarter was 71.7 billion yuan, a year -on -year decrease of 1%.

Tencent's value -added service business mainly includes digital content services such as Tencent Games, Tencent Video, QQ Music, as well as social networking businesses such as WeChat and QQ. Among them, the game business is the core of Tencent's part of the business. The financial report shows that in the second quarter of 2022, Tencent's game business revenue was 42.5 billion yuan, a year -on -year decrease of 1%.

Earlier, due to the impact of the epidemic factors, the overdrafts of the game business increased. With the improvement of domestic epidemic and the relaxation of the epidemic control overseas, the entire gaming market also began to pay off. The slowdown and even negative growth became the main tone of the first half of this year.

Looking at the domestic market first, according to Gamma data, the size of Chinese game users in the first half of 2022 decreased slightly by 0.1%year -on -year to 670 million people, and the actual market sales revenue decreased by 1.8%year -on -year to 147.79 billion yuan. Zhang Yijun, the first chairman of the China Audiovisual and Digital Publishing Association and chairman of the Game Working Committee, said that the "demographic dividend" of the game industry has basically disappeared and the industry may enter the era of stock competition.

However, not all game manufacturers have entered the era of stock competition. From the first time the regulatory authorities issued the game version number to early August, a total of 241 games in China received the version number. However, Tencent's products have not appeared in the list of the above games. At this point, Tencent has not received the version number for more than a year. The industry believes that to a certain extent, it shows that the tone of small and small game manufacturers has taken shape at the policy level, and the days of head manufacturers such as Tencent are still difficult.

Reflected in the financial report, the revenue of local market game in the second quarter decreased by 1%to 31.8 billion yuan, and the growth rate was basically the same as the first quarter. As far as a single game is concerned, the revenue of "Glory of the King", "Tianya Mingyue Sword Mobile Games" and "League of Legends" have declined, and "League of Legends Mobile Games", "Return to the Empire" and "The Battle of Gold Shovel" and other recent launch The income of the game has increased, but it is obviously unable to bear the burden of the growth of Tencent's game business.

Overseas markets have always been considered the next most potential growth space for Tencent's game business. According to Guhai Securities Research Report, the size of the overseas mobile game market (excluding China) in 2026 is expected to reach 97 billion US dollars. The growth rate reaches 12%, which will significantly higher than the growth rate of domestic mobile games.

In this regard, Tencent also started layout early. IT Orange data showed that as of August 17, Tencent participated in 6 game investment events this year, which was significantly less than 63 throughout 2021. Among them, Tencent's investment in overseas game studios and companies accounted for a higher proportion. This year, Tencent has invested 4 overseas companies in six game investment, accounting for 67%. Not long ago, it also increased the French game company Ubisoft with a premium of 127%and sought to become its largest shareholder.

However, these layouts cannot support the international gaming business. As the international game industry began to digest the influence of the epidemic, the revenue of Tencent International Market in the second quarter decreased by 1%to 10.7 billion yuan. In the previous quarter, this data increased by 4 %, 20%and 34%in the previous two quarters, the international game business is indeed not optimistic. As far as a single game is concerned, "PUBG Mobile" and "Wild Fighting" revenue declined. "Valorant" performed well and the newly launched "Rise of the Night" made an incremental income contribution.

It is worth noting that in July, a variety of new tour "Fingertips Lord", "Breakthrough in the Dark Area", and "League of Legends E -sports Manager" will be launched one after another, which may bring incremental performance to Tencent Game Q3 performance, but this may only be possible After all, after "Glory of the Kings" and "Peace Elite", Tencent has not been exploded for too long. At the same time, it may take some time to fully digest the overdraft growth of game transparency and negative domestic regulatory measures.

02. Online advertising waiting for the video number breaks the game

Advertising business is a barometer of the national economy, and this barometer is obviously very sensitive. According to data from the National Bureau of Statistics, in the first half of 2022, the total retail sales of social consumer goods were 21043.2 billion yuan, a year -on -year decrease of 0.7%. Behind this data is the downturn of the entire advertising market. Earlier this month, QuestMobile released the data of the "2022 Internet Advertising Market Half -Men Report" data showed that in the first half of this year, the overall growth of the Internet advertising market was under pressure, with a total scale of about 290.3 billion yuan , Decreased by 2.3%year -on -year.

Although, whether it is a short video or social software, the advertising concentration of head manufacturers is increasing, but the entire market is declining, and the influence of Tencent's network advertising business is particularly obvious. The report shows that the number of Internet advertising brands in the first half of 2022 decreased by 38.3%year -on -year, and the advertising business of various platforms on the Internet was affected to varying degrees.

Specifically, due to the negative impact of the needs of Internet services, education and financial fields, the online advertising revenue of Tencent Network Advertising fell 18%to 18.638 billion yuan in the second quarter. This growth rate was the same as the first quarter. Tencent said that the advertising business was highly impacted in April and May, and some of the advertising revenue brought by Sogou was offset. Among them, social and other advertising revenue decreased by 17%to 16.1 billion yuan. The main reason was that the advertising demand was weak and the advertising bidding was sluggish, which caused the ECPM to decline; the media advertising revenue decreased by 25%to 2.5 billion yuan. The decline effect.

The traffic giants have felt chills since the second half of 2021 and have continued to this day. Alibaba's latest financial report shows that in the second quarter of this year, its client management revenue, mainly advertising revenue and commission revenue, decreased by 10%year -on -year to 72.26 billion yuan.

In other words, in the economic downturn, customers have to be more cautious in advertising, and those who can not vote will not be voted. This is obviously not a problem with any platform. The survey data shows that more than 60%of advertisers believe that "the cost of transformation is getting higher and higher", and more than 80%of the advertisers set the "improvement of purchase and conversion" to the main marketing goal.

In order to grab the existing customers, the head advertising platform will inevitably continue to extend the development to depth and breadth. On August 4, Alibaba Intelligent Information Business Group announced that its smart marketing platform has officially upgraded to "Super Huichuan Advertising Platform". The purpose is to promote the advertising platform to provide exposure and pursuit of clicks from the past. , Conversion, active tilt.

Compared with Ali's deep practices of packaging products and making traffic, Tencent's current thinking is mainly due to breadth, and it is the commercialization of the video number to undertake this task.

In the second quarter, WeChat monthly active households continued to grow to 1.299 billion, a year -on -year increase of 3.8%. In WeChat, the total use of the video number of the video number exceeds 80%of the total use time of the circle of friends. The total video playback volume of the video number increased by more than 200%year -on -year, and the video playback volume based on artificial intelligence was increased by more than 400%year -on -year. The number of daily active creators and daily average video upload increased by more than 100%year -on -year.

In order to accelerate the realization, the "video number shop" service was launched in July, which further improved the function of e -commerce and live broadcast and cargo. The video number also tested the information flow advertising function. In this financial report, Ma Huateng, chairman and CEO of Tencent's board of directors, also expressed the expectations of launching information flow advertisements in the video number.

Everbright Securities believes that the "video number shop" model may gradually reduce third -party sources in the future, realize the closed loop of live e -commerce, and promote the rapid growth of video e -commerce GMVs; macroeconomic recovery after the epidemic recovery, and the needs of advertisers are expected to get mentioned Zhen, the video number has sufficient information flow inventory and commercialization potential, and is expected to promote the recovery of Tencent's advertising business growth.

In addition, QuestMobile expects that the domestic Internet advertising scale will reach 391.31 billion yuan in the second half of the year, a year -on -year increase of 9.4%. For Internet traffic giants, Gan Lin, who is undoubtedly drought, believes that it can boost Tencent's advertising revenue to a certain extent.

However, in the case of short video advertisers and investment, the commercialization of the video has to face the pressure of Douyin and fast hands. In this financial report, the content of the video number is quite a lot, but the key data such as the user time of the video number is still missing. Data in January 2022 shows that the use time of the video number single user is only 35 minutes. One -third of the fast hand. Therefore, whether the commercialization of the video number can bring sufficient performance increase to WeChat, it remains to be verified.

03, the company's uniform "ups and downs"

The first time the fintech and corporate service sector appeared in Tencent's financial report, after the adjustment of the "930" organizational structure in 2018, the proportion of this revenue has increased all the way, from 25%in the first quarter of 2019 to more than 30%since 2021. Today, 2 B business has grown into a company's income pillar.

According to the financial report, in the second quarter, Tencent's fintech and corporate service business revenue increased by 1%to 42.2 billion yuan year -on -year, a decrease of 1.3%month -on -month, accounting for 31.5%of the total revenue, which was basically the same as the game business revenue. Among them, the year -on -year growth rate of fintech service revenue has slowed down from the previous quarter, mainly because the new crown epidemic in April and May has suppressed commercial payment activities; corporate service revenue has decreased year -on -year. Lost losses.

In fact, in addition to Tenpay, which is affected by the epidemic in Tencent's fintech business, the combat effectiveness of other fields is not strong. For example, on the consumer small loan, Tencent Tenpay has launched "division" and "micro -music points", respectively, respectively, "Huayan" and "borrowing", but both products have not yet operated on a large scale.

Looking at the business service business, the enterprise service business represented by Tencent Cloud has been in a loss. The total number of employees of Tencent Cloud 3 years ago was only more than 1,000, and more than 10,000 CSIG employees in 2021. With the same as CSIG, with the CSIG, with the CSIG, with the more than 10,000 people. In the increase in the number, Tencent's new business has been losing money.

What makes Tencent a headache is that such a huge manpower and financial investment still failed to gain more advantages in the market. Tencent Cloud has been surpassed by Huawei Cloud. According to the first quarter of 2022 released by the research institution Canalys, the China Cloud Computing Market Report showed that Alibaba Cloud maintained a leading position with a market share of 36.7%. The share is second to fourth.

Some senior analysts believe that China's public cloud market may be difficult to grow as much as before. After the industry has become balanced, the manufacturer's strategy and play are also changing, and profits have become the direction of everyone's work together.

In May 2022, Tang Daosheng said: "In the past three years, Tencent's CSIG's growth model emphasizes more income scale, but this year we have a large sales reform. Model, which is based on Tencent's self -developed product -led, healthy and sustainable business model. "

Tencent pointed out in the financial report that the company focuses on the growth of high -quality income of clouds and other enterprises, and prefer to focus on self -developed products and reduce losses at the same time. For example, self -researching the cloud, which is also considered a milestone in Tencent Cloud Capability. In June of this year, Tencent, including QQ, WeChat, Tencent Video, King Glory, etc., was fully cloudy. Data show that in the past three years, Tencent's self -developed business has exceeded 50 million cores, saving a total of more than 3 billion.

Data show that compared with the high point in the fourth quarter of 2021, in the second quarter of 2022, Tencent compressed the cost of enterprise service business by nearly 7 billion yuan, which directly brought the gross profit margin of corporate services. In terms of PaaS, TDSQL database revenue increased by more than 30%year -on -year, accounting for more than 5%of cloud service revenue in the second quarter of 2022.

At the same time, in order to cooperate with the cost reduction and efficiency, Tencent began to lay off the Tencent CSIG (Cloud and Smart Industry Business Group). According to media reports, the proportion of departmental layoffs reached 2/3, and even all members were cut.

However, the disadvantages of layoffs are also obvious. As far as products are concerned, Tencent Cloud has insufficient use in the use scenario. Tencent Cloud is better at using video, games, live broadcasts and other use scenarios. In terms of government -enterprise, traditional industries and other applications, its product power still has a relatively obvious shortcomings. If you want to make up for the shortcomings, I believe that the layoffs will not have a positive impact on Tencent Cloud. For example, the current customer of Xiangzhuang Government Cloud, which needs strong future sales to maintain.

In July, the Tencent Cloud and Smart Industry Business Group (CSIG) announced the establishment of a political enterprise line. Li Qiang, vice president of Tencent, was the president of the Political Enterprise Affairs Line and fully responsible for industry team management and regional business expansion. It is understood that Previously, Li Qiang had more than ten years of experience in digital sales of government and enterprises. The interpretation of the outside world is that Tencent will open a fierce attack on the TO B and TO G government and enterprise market.

The difficulty of iteration in products and services is still huge. Cloud computing manufacturers have not changed the status quo of long -term investment in R & D and personnel. Calculating the market, it is unknown whether Tencent Cloud can break through.

04. Summary

In the first half of 2022, "pressure" and "breakthrough" must be Tencent's keywords. Value -added service business, online advertising business, gold science and enterprise service business have fallen into similar dilemma, especially the game business and online advertising business. Negative growth is still continuing, and Jinke and the enterprise service, which has been highly hoped, has failed to provoke the heavy responsibility of growth.

In addition, even if the performance is still under pressure, Tencent's investment in research and development is still increasing year by year. In the second quarter, R & D investment reached 15.01 billion yuan, a year -on -year increase of 17%. In the first half of the year, Tencent's R & D investment reached 30.4 billion yuan, an increase of 26%year -on -year. Since 2019, Tencent's investment in research and development has exceeded 151.6 billion yuan.

However, Tencent has responded to this situation, such as "cost reduction and efficiency." The financial report shows that sales and marketing expenditures decreased by 21%year -on -year to RMB 7.9 billion. At the same time, Tencent made streamlined personnel in the winter. According to the relevant data of Tencent's financial report, the per capita salary of employees in the second quarter decreased by 900 yuan compared to the first quarter, from from From the end of March to the end of June, 3 months employees decreased by 5,498 employees.

On the other hand, Tencent is also stepping up the exploration of new business growth, such as overseas markets in the game business, advertising business brought by the video number, and the new direction of cloud business in the cloud business, but these businesses are truly supported by Tencent. It's too early to go.

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