Hailing WeChat and Mobile Progress, Tencent Posts $7 Billion in 2012 Revenues
Hong Kong markets have just closed, and Tencent (HKG:0700), China’s biggest web company, has released its 2012 full-year and Q4 financials. With Tencent hoping to have a global success story with its WeChat messaging app, more eyes than ever are on Tencent. The headline figure from today’s financial report is that full-year revenues were up 54 percent in 2012 to hit US$6.994 billion. Let’s just say $7 billion.
Most of Tencent’s growing revenue ($5.09 billion) was from “internet value-added services”, including things like gaming and virtual products. After all, it’s China’s biggest gaming company as well.
With a growing push into e-commerce, $704.4 million of all that revenue came from its online stores, such as Paipai and its open platform QQ Buy.
Tencent’s operating profits for 2012 stand at $2.46 billion, up 26.3 percent on the 2011 figure.
WeChat and Social
Disappointingly, Tencent made only two bland references to WeChat’s overall progress, mentioning “substantial growth” in 2012 and an emphasis on “marketing investment to acquire users for WeChat” – both of which were obvious already. The financials also said that WeChat Moments – the Path-like social network inside the messaging app – has “enjoyed rapid user adoption.”
On its other social platforms, Tencent reported monthly active users on its Qzone web profiles (sort of a mix of MSN and Facebook) “increased by nine percent year-on-year to 603 million at the end of 2012.” As for its Facebook clone Pengyou site, it saw a 22 percent boost in monthly users to reach 247 million. The ubiquitous QQ instant messenger hit 798 million monthly active users.
In addition, its Twitter-esque Tencent Weibo hit 87 million daily active users by the end of the year. That’s out of its 540 million registered users. But the microblog remains out-hyped by the identically-named Sina Weibo.
Getting back onto the subject of gaming, Tencent’s QQ Game Platform saw peak concurrent users reach 8.8 million in the fourth quarter of 2012. That’s the casual, social gaming side of its many online title offerings.
Looking to the year ahead, Tencent teased possible “applications, games, and location-based activities” arriving in WeChat and its mobile QQ IM apps.
While Tencent might be worried in private that its big earners – stuff like games and advertising – are reliant on desktop and not well adapted to mobile, founder and CEO concludes that he’s pleased with the Shenzhen company’s push onto mobile screens:
During 2012, widespread smartphone adoption brought both disruption and opportunities to the China internet industry. At Tencent, we began to see early results from substantial investments we have made, and continue to make, in mobile internet products. Tencent now provides many of China’s most popular smartphone apps for activities such as communications, social networking, web browsing, games, news, and music, among others. These apps enable us to reach users who are increasingly spending time on smartphones, extend our ecosystem from PCs to mobile, and provide new mobile-specific features unavailable on PCs. During the year, we also introduced a powerful targeted advertising system leveraging our social networks, built the market-leading open platform in partnership with third party developers, diversified our game revenue internationally, and ramped up a sizeable e-commerce business. As a result, we achieved healthy increases in revenue and earnings in 2012, while continuing to invest aggressively in platforms, innovation and technology in order to enhance value to our users and drive long-term growth for our company.
We’ll drop in on Tencent’s post-earnings conference call later and post any juicy details that might emerge.
Find the full report on Tencent’s investor relations page.