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Tencent 00700
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| Chairman |
MA Huateng |
| Issued Capital (Shares) |
1,836M |
| Par Value (HKD) |
0.000 |
| Market Capitalization (HKD) |
267,280M |
| Corporate Profile |
Principally engaged in the provision of Internet value-added services mobile and telecommunications valueadded services and online advertising services to users in the People¡¦s Republic of China (the ¡§PRC¡¨).
Business Review - For the year ended December 31 2010
2010 witnessed another year of steady development in the Internet market in China. According to the China Internet Network Information Center (¡§the CNNIC¡¨) the total number of Internet users increased by 19.1% on a year-on-year basis to 457.3 million at the end of 2010 compared to a growth rate of 28.9% in the previous year. Internet penetration increased to 34.3% exceeding global average for the first time. Although the growth of China¡¦s Internet user base has been slowing down as its scale continues to increase the Internet has increasingly become an integral part of people¡¦s everyday life as users spend more time online. We expect future growth of the industry to be increasingly driven by rising level of Internet usage by users and businesses as opposed to user growth. In addition advertising and e-commerce will become more important business models for the industry in addition to revenue generated from users.
The industry witnessed several significant developments during 2010. First of all the year saw continued rapid growth of the wireless Internet market. According to the CNNIC the total number of wireless Internet users in China increased by 29.7% to 302.7 million at the end of 2010 representing 66.2% of the Internet user base. This was mainly driven by better wireless data infrastructure and availability of mobile applications such as WAP portal IM and social games. Secondly while traditional SNS continued to develop following a year of strong growth in 2009 microblog enjoyed explosive growth and emerged as a major social media platform in China. Thirdly although the growth of the online gaming sector slowed down with the increasing scale of the industry the web game sector experienced rapid growth in 2010. Meanwhile the online advertising market benefited from the buoyant economy in China as well as positive impact of major events including the World Cup and the World Expo. In addition the strong growth momentum of e-commerce and search advertising continued.
In 2010 our businesses delivered a strong set of financial and operating results riding on the growth of our platforms and our relentless focus on user experience. Our Internet value-added services (¡§IVAS¡¨) grew rapidly during the year thanks to the robust revenue increase of our online gaming business. Community value-added services also registered solid growth. Our mobile and telecommunications value-added services (¡§MVAS¡¨) benefited from increased popularity of our bundled SMS packages mobile social games and mobile music services. Our online advertising business achieved significant growth in revenues and client base reflecting our expanding platforms improved brand position and media influence as well as successful leverage of major events.
For the fourth quarter of 2010 our IVAS business expanded compared to the previous quarter. This primarily reflected the revenue increase of our online gaming business mainly driven by a full quarter contribution from Qi Xiong Zheng Ba a web-based MMOG launched in August 2010 and increased monetisation of Cross Fire. Our MVAS business registered revenue growth mainly driven by our bundled SMS packages and mobile social games. Our advertising business also grew during the quarter reflecting the revenue increase of our search business. Despite weaker seasonality in the fourth quarter advertising revenues from IM client and portal were broadly stable.
Looking into the first quarter of 2011 we expect more favourable seasonality for our IVAS business particularly for online games as users generally spend more during the winter school break and the Chinese New Year holiday. Monthly subscription of IVAS will also benefit from positive seasonality albeit to a lesser extent. For MVAS monthly subscription will see a more benign environment as the negative impact of the regulation requiring service providers to conduct double confirmation plus reminder services stablises. For our online advertising business the first quarter is traditionally a weaker season as advertisers reduce their activities around the Chinese New Year holidays.
Source: Tencent (00700) Annual Results Announcement |
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Copyright 1999-2001 SHK Financial Data Limited
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Last Updated: 5 Oct 2011
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