Tencent

Tencent is a Chinese investment holding company specializing in various areas of high-tech business, including various Internet services, entertainment developments.

Tencent's numerous services include social media, music and web portals, e-commerce tools, search and payment systems, mobile and online games, cloud databases and email services.

Aktivs

Tencent owns the largest China in the social network QZone and the popular messenger QQ, and since May 2010 - also 11.46%. Mail.ru Group

The main asset of Tencent is the WeChat messenger, which has about a billion active users (the vast majority of them are in China). The messenger was launched in 2010, and since then Tencent's capitalization has grown approximately 10 times.

Separately, Tencent is passionate about gaming. Back in 2011, she acquired a controlling stake in Riot Games (most famous for the multiplayer game League of Legends), and in 2015 bought it entirely. She also owns a multiplayer online battle arena (MOBA) called King of Glory, with 200 million monthly active users. Overall, the games are one of Tencent's fastest growing businesses, already generating five billion dollars a quarter for the company.

Tencent shares in other companies at the beginning of 2022

Performance indicators

2023

Revenue growth of 10% to RMB609 billion

At the end of 2023, the Chinese private investment holding company Tencent received revenue of 609 billion yuan, or approximately $86 billion. This is about 10% more compared to the result for 2022. Such data are given in the financial report published on March 20, 2024.

Profit for 2023 amounted to 161.7 billion yuan - about $22.8 billion: this is 36% more compared to the previous year. The report said Tencent has updated its artificial intelligence-based advertising technology platform, which has significantly improved targeting accuracy and allowed advertising revenue to rise. The company continues to actively implement AI-based generative tools.

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Tencent captures revenue growth from fintech and business services. At the same time, there is a lull in the direction of games, as users began to return to normal life in the light of the lifting of severe restrictions imposed in response to the COVID-19 pandemic. The company also said it intends to at least double its share buyback.

Tencent President Martin Lau says the company's gaming revenues in early 2024 will be weak compared to the previous year. At the same time, Tencent is preparing a number of new projects that are expected to increase revenue in the Chinese market. In particular, Lau said that the company plans to release a new game Dungeon & Fighter Mobile, which, according to JP Morgan analysts, could generate revenue from 3 billion to 4 billion yuan (from $0.42 billion to $0.55 billion at the exchange rate on March 26, 2024). It is also said that Tencent continues to develop its large Hunyuan language model, which provides the highest level of performance in Chinese. It is scaled to approximately 1 trillion parameters.^[1]

In the list of companies with the largest R&D costs

The chart shows 12 months of data as of April 2023.
For Amazon shows the costs of technology and content (not R&D).
ByteDance statistics date back to 2021 (according to the Wall Street Journal)

2022: Revenue decline of 1% to RMB554.6 billion

The revenue of the Chinese Internet corporation Tencent Holdings in 2022 amounted to 554.6 billion yuan (approximately $80.6 billion at the exchange rate as of March 22, 2023). This is 1% less than in the previous year, as stated in the financial report published on March 22, 2023.

It is noted that Tencent faced a reduction in revenue on an annualized basis for the first time in its history. Net profit also decreased: the fall was 16% - to 188.2 billion yuan (about $27.3 billion).

Tencent revenue down for first time in company's history

At the end of 2022, the corporation's revenue in the segment of social networks and games decreased by 1% compared to the previous year, being at the level of 287.6 billion yuan (about $41.8 billion). Advertising on the Internet brought in 82.7 billion yuan ($12 billion), which is 7% less on an annualized basis. Revenue in the direction of fintech services and business solutions rose by 3%, reaching 177.1 billion yuan (approximately $25.7 billion).

Tencent speaks of growing demand for smart mobility solutions among automakers, with Nio, BMW and GAC Motor among the biggest customers. At the same time, the volume of commercial payments decreased due to restrictions in China associated with the COVID-19 pandemic. The number of active users of the QQ instant messaging platform as of the end of December 2022 was 572.1 million people: this is 3.6% more compared to 2021. The total number of Weixin and WeChat users increased by 3.5% on an annualized basis, reaching 1.31 billion.

In the cloud business segment, as noted in the report, Tencent in 2022 reduced unprofitable activities and optimized costs, focusing on more profitable PaaS solutions (platform as a service) of its own design. At the same time, the company continues to invest in promising products, in particular, in solutions based on artificial intelligence.^[2]

2021: Revenue from the sale of games - $32.2 billion

The largest public companies by revenue from the sale of games in 2021

History

2024: Tencent founder becomes China's richest man

The founder and head of the Chinese Internet company Tencent, Ma Huateng, also known by the pseudonym Pony Ma, has become China's richest man. According to the Bloomberg Billionaires Index, released on September 16, 2024, Ma's fortune is $43.9 billion. Read more here.

2023

Tencent Video Popularity Map by Country

As of October 2023

Baidu, ByteDance, Tencent and Alibaba ordered $5 billion in processors for generative AI

On August 10, 2023, it became known that the Chinese companies Baidu, ByteDance, Tencent and Alibaba ordered Nvidia chips for $5 billion to develop and maintain projects in the field of generative artificial intelligence. Read more here.

Abandonment of a failed VR equipment project due to falling interest in metaverse

In mid-February 2023, it became known about Tencent's decision to abandon the virtual reality (VR) hardware development project. The deteriorating economic environment also forces the company to cut costs and headcount in its metaverse development unit.

Tencent had ambitious plans in 2022 to build virtual reality software and hardware in its advanced reality (XR) division, which launched in June 2022 and for which about 300 people were hired, Reuters reported. The company was developing the concept of a hand-held game controller similar to a ring until the end of 2022. XR covers several technologies but also describes a range of reality change techniques including virtual reality (VR), augmented reality (AR) and mixed reality (MR).

Tencent closed the project for the creation of VR equipment

Difficulties in achieving rapid profitability and the large investment needed to produce a competitive product were among the factors that led to the strategy being abandoned in early 2023, according to the agency. According to one of the sources, according to the internal forecast, the XR project will not become profitable until 2027. Sources told journalists of the publication that the management of Tencent advised most employees of the XR division to look for other projects in the market.

The creation of the XR division for Tencent comes amid growing global interest in the concept of virtual worlds in metaverse in 2022. Tencent has entered the race with Western companies such as Meta Platforms (an extremist organization banned in the Russian Federation) and Microsoft, which build their own metaversions and have their own hardware projects. But 2022, according to Reuters, has become one of the most difficult for Tencent since its inception, as the company's revenues have suffered from regulatory repression and measures to combat the spread of the COVID-19 virus.^[3]

2022

Tencent and Alibaba AI systems understand Chinese speech better than people

On November 28, 2022, the results of testing language models of Tencent and Alibaba Group based on artificial intelligence (AI) were released. Smart algorithms are reportedly able to understand Chinese better than people do. Read more here.

Thousands laid off as revenue falls

In mid-November 2022, it became known that the Chinese Internet giant Tencent Holdings cut 1,879 jobs in the third quarter of 2022 and 5.5 thousand in the second quarter. Thus, the company continued layoffs due to falling revenues.

Tencent Holdings employed 108,836 people at the end of September 2022, the company said in its earnings statement. This is 1.7% less than in the previous quarter - 110,715 employees, but 1.4% more than in the same period in 2021 - 107,348 employees. Tencent Holdings has cut a total of 7,377 jobs since peaking in headcount in the first quarter of 2022.

Tencent Holdings laid off thousands of employees as revenue falls

The company's headcount continues to decline after several rounds of layoffs in early 2022 as part of the company's efforts to cut costs amid economic and regulatory winds that have hit key business lines, including gaming and advertising. The disappearance of jobs from employers such as Tencent Holdings has also affected entrepreneurship in the country. In China, many young graduates - with another 11.6 million expected next summer - have flocked to government jobs considered safer than the private sector.

Tencent Holdings began a new round of job cuts in early November 2022, affecting employees in Shenzhen and Shanghai. Employees of the company's cloud business were again among the most affected. The latest job cuts are minor adjustments in certain business units, employees said.

The new layoffs at Tencent Holdings affected video streaming, gaming and cloud businesses, Reuters reported on November 15, 2022. Tencent declined to comment. High-loss businesses like cloud computing and video platforms have gone through at least two rounds of layoffs since April 2022. Previous rounds of job cuts have also been accompanied by other cost-cutting measures, such as abolishing free breakfasts and dinners for contract workers and adjusting wage policies to slow the pace of wage increases.

In March 2022, Tencent Holdings president Martin Lau Chi-ping said the company would exit some non-core businesses or optimize them to control headcount, but the total number of employees would still be higher by the end of 2022 compared to 2021. Weakening macroeconomic environment and tight controls, COVID-19 including business closures, have weighed heavily on the world's second-largest economy, with tech companies hardest hit, Lau Chi-ping said.^[4]

Tencent acquires 10% of Ubisoft

On September 6, 2022, Ubisoft announced that Chinese conglomerate Tencent had bought 49.9% of Guillemot Bros. - the family company of Ubisoft CEO Yves Gyimo and his brothers. Read more here.

Purchase of game developer 1C Entertainment

At the end of February 2022, it became known about the sale of 1C Entertainment to the Chinese company Tencent. The latter buys a controlling stake in the publisher and developer of games from the Russian "1C." The value of the transaction was not disclosed. Read more here.

Investing in French online freelance bank Qonto

In early January 2022, an online bank for Qonto freelancers raised about 486 million euros as part of the Series D funding round. The estimate startup for this investment transaction rose to 4.4 billion euros. The latest investment round was led by Tiger Global and. The TCV round was also attended by some new investors such as Alkeon, Eurazeo,,, KKR Insight Partners Exor Seeds, Guillaume Pousaz, Gaingels and Ashley Flucas. Existing investors Valar, Alven, DST Global Yuri Milner and Tencent have also invested in Qonto. More. here

Purchase of gaming accessories manufacturer for smartphones Black Shark

In early January 2022, it became known about the sale of Black Shark to Tencent. The latter will join the purchased manufacturer of gaming smartphones and accessories to its Content Business Group division. The deal was announced after Tencent President Martin Lau called the metaverse a real possibility, adding that the company may need to take over profile developers to bring this concept to life. Read more here.

2021

Sale of a stake in JD.com for $16.3 billion

In mid-December 2021, Tencent sold its stake in the Chinese online retailer JD.com. The total value of shares is estimated at $16.3 billion. Read more here.

Tencent ordered to coordinate with the Chinese authorities all app updates

On November 24, 2021, it became known that Tencent should receive permission from Chinese regulators to send updates for its applications, state broadcaster CCTV said. This decision was made after regulators found that several applications created by the company violated data protection rules. Chinese authorities have begun to exert serious pressure on the country's technology sector since the fall of 2020.

For November 2021, approval of Tencent applications has been suspended. The Ministry of Industry information technology China and should consider all new updates before they are launched. This may take until the beginning of December 2021, CCTV reports. In 2021 China , he tightened rules on the domestic technology sector, which has developed almost without regulation since 2010. Beijing has imposed regulation in areas ranging from antitrust to the use of algorithms by tech companies.

Tencent obliged to coordinate with the PRC authorities all application updates

We are constantly working to improve user protection in our applications, and we regularly work with relevant government agencies to ensure compliance. Our applications remain functional and available for download from various services, but so far without additional updates, "said Ma Huateng, Chairman of the Board of Directors and Chief Executive Officer of Tencent.

One of the largest regulations adopted in 2021 was the landmark law on the protection of personal data. Regulators are focusing heavily on how companies within China collect and process data, and the latest action against Tencent is part of that process. Tencent has already felt the influence of Chinese regulators, because bans on other areas, such as education, video games have also weakened the advertising influx of finances into the company.^[5]

Investing in grocery delivery company Gorillas

In mid-October 2021 the German , food delivery company Delivery Hero invested $235 million in Gorillas and now owns 8%. As startup part of a $1 billion funding round Gorillas , Tencent, Coatue, the fund Yuri Milner DST Global and Dragoneer also invested. More. here

Investing in a used car sales service Cars24

In mid-September 2021, information appeared that the Indian service for the sale of used cars Cars24 attracts $259 million from eight investors, including the Yuri Milner Fund. Read more here.

Chinese authorities ban exclusive music licensing deals with record companies around the world

Tencent shares fell after Chinese authorities ordered the tech giant to end exclusive music licensing deals with record companies around the world in July 2021.

The move aims to combat the company's dominance in online music. Tencent controls more than 80% of exclusive streaming rights in China after acquiring China Music Corporation in 2016.

Buying UK game developer Sumo Group

In mid-July 2021, Chinese technology giant Tencent announced the purchase of the remainder of the shares of the British video game holding Sumo Group. The deal is estimated at $1.3 billion. Read more here.

Investing in robot surgeon manufacturer CMR Surgical

At the end of June 2021, the manufacturer of robotic surgeons CMR Surgical raised $600 million in Series D funding and was valued at $3 billion. The round was held by SoftBank Vision Fund 2ii in conjunction with Ally Bridge Group, and the funds received will be used to commercialize the next generation Versius surgical robotic system for open and laparoscopic operations, as well as to further develop the company's digital ecosystem. Read more here.

Investing in the online education platform GoStudent

In mid-June 2021, the online educational platform GoStudent, designed to interact between students and tutors, raised 205 million euros. The series C investment round was headed by the Yuri MilnerDST Global fund, SoftBank also invested in the startup through its fund, Tencent, Dragoneer and previous investors: Coatue, Left Lane Capital and DN Capital. Read more here.

Investing in Gorillas Essential Food Delivery Service

At the end of March 2021, the Berlin service of ultra-fast delivery of essential products Gorillas raised $290 million. The investment round was led by Coatue Management, Yuri Milner's fund DST Global and Tencent with the participation of Fifth Wall, Greenoaks and existing investor Atlantic Food Labs. Read more here.

Investing in Udemy Education Service

In March 2021, it became known that the Winter Capital fund, associated with the head of Norilsk Nickel Vladimir Potanin, turned out to be one of the investors in the American company Udemy. The fund, together with Learn Capital (acted as the main investor), took part in the Series F round for $50 million. Chinese internet giant Tencent was also involved in the deal. Read more here.

Investing in Indian marketplace Udaan

In early January 2021, Udaan announced the attraction of $280 million in investments. Both new and existing investors have invested in the Indian B2B-Marketplace. The latter include the DST GlobalYuri Milner Foundation. Read more here.

2020

The volume of investments in startups reached $12 billion

In mid-March 2021, it became known that the Chinese Internet center Tencent Holdings during 2020 spent more than $12 billion on the purchase of shares of 163 companies in a wide range of industries. As a result, Tencent has become the largest sponsor of startups among non-financial companies in China.

According to Chinese research group Beijing Suiyue Juzi Technology, Tencent began investing heavily in startups in the late 2000s and by the end of February 2020 had acquired a certain stake in approximately 880 companies. In 2020, Tencent invested its capital in the development of 163 companies, that is, 40% more than in 2019.

Tencent invested more than $12 billion in startups in 2020

Tencent's investment strategy is heavily focused on the entertainment and gaming industry. For the internet giant, which derives most of its profits from the gaming business, synergy with game, music and video service providers is incredibly profitable. Tencent also invests in overseas companies, including PlatinumGames, an Osaka-based game developer.

Unlike local rival Alibaba, which often tries to acquire controlling stakes, Tencent prefers to remain a minority shareholder and avoids direct interference in the management of those companies.

Companies partly owned by Tencent and listed include the interactive e-commerce platform Pinduoduo, Meituan's leading food delivery service, and Singapore-based Sea, which handles online gaming, e-commerce and digital financial services. Tencent's investment portfolio also includes a group of private companies valued above $1 billion, such as WeDoctor, the world's leading healthcare technology platform .^[6]

Tencent acquires Warframe game developers for $1.5 billion

In August 2020, Tencent acquired Leyou Technologies. This game development studio is known for creating the MMO shooter Warframe. The value of the transaction reached an amount of $1.5 billion dollars.

Leyou Technologies has been trying to sell since 2019: Sony also competed for the company, the deal was estimated at $1.2 miliard, but the COVID-19 coronavirus pandemic prevented it.

Investing in a digital bank for small and medium-sized businesses Qonto

In January 2020, Qonto announced the attraction of $115 million in investments. The company held a Series C funding round led by DST GlobalYuri Milner Foundation and Chinese internet giant Tencent. Read more here.

2019

Company corruption: 60 employees laid off

In late December 2019, Tencent Holdings announced that it had laid off more than 60 employees in connection with corruption, with 10 of them breaking the law and being turned Chinese over to law enforcement.

Overall, Tencent has investigated more than 40 cases, mostly involving misappropriation of the company's assets, corruption and bribery. According to the company's statement, the offenses were reported in various business groups, including the development department, the online platform maintenance department, and the cloud and smart technology department.

Tencent Holdings announces it has laid off more than 60 employees over corruption

Tencent's statement on corporate social responsibility outlined the so-called "high-voltage line" - unforgivable employee behaviour that entails legal liability. It includes fraud using company information, taking bribes or kickbacks, as well as transferring confidential information to third parties.

Tencent not only fired all employees who were suspected of such offenses, but also blacklisted 16 related companies.

Cooperation with these companies has been completely terminated. We will no longer offer any services or products to these companies and are not going to accept services on their part, Tencent said in a statement.

Tencent is not the only Chinese tech company to start fighting corruption. Beijing Bytedance startup, the operator of the TikTok video application, fired an executive who took bribes from a business partner, including cash and in the form of luxury cars. In addition, the former president Alibaba of the Youku Group (Yang Weidong) video platform was arrested on suspicion of corruption. Meituan Dianping conducted a large-scale internal investigation, which resulted in the dismissal of 89 people.^[7]

Investing in the fintech company Nubank, which was estimated at $10 billion

At the end of July 2019, Nubank announced a Series F venture financing round, as a result of which the company raised $400 million. Among the investors of the Brazilian fintech startup was Tencent. Moreover, this is not the first time he has invested in Nubank. Read more here.

Second place after YouTube in watching videos on Android smartphones

YouTube captured 70% of the time spent on smartphones with OS Android when watching videos, the study said. App Annie Interestingly, the growth of the other four streaming applications was provided by Chinese users.

2018: Tencent becomes platinum member of Linux Foundation

At the end of June 2018, Tencent announced that it had received platinum partner status with the Linux Foundation. This maximum possible level indicates the growing attention of the most expensive Chinese IT company to open source software products.

 As a platinum member, Tencent will annually transfer $500 thousand to the fund (for comparison, the contribution of a gold participant is $100 thousand per year, silver - $5-20 thousand per year) and undertakes to support its open source and  Linux initiatives. In particular, these funds will help the organization support a safe coding program, diversity promotion and infrastructure development.

Tencent Announces Platinum Partner Status for Linux Foundation

As part of the Linux Foundation, Tencent has expressed interest in working on projects such as the OpenDaylight SDN platform , blockchain platform Hyperledger, as well as on systems, machine learning cloud and network technologies developed in the working groups LF Deep Learning, Cloud Native Computing, LF Networking and. Open Networking Foundation

In addition, Tencent intends to contribute to the development of a microservice project called TARS and service Tseer, as well as to contribute to the development of the Angel AI project by adding to it its developments in the field of deep learning.

Tencent will get a seat on the board (Liu Xing will take it). The Chinese IT giant is also involved in the Open Compute Project, an organization that develops open source hardware.

In addition to Tencent, companies such as,,,,,,,,,,,,,,, and have platinum status in the Linux Foundation Verizon Fujitsu AT&T Microsoft VMware Cisco Huawei. By the IBM Intel Samsung NEC end of Qualcomm Hitachi June Oracle 2018, Tencent's market capitalization is about $580 billion, the highest among Chinese technology companies.^[8]

2017: Capitalization of $500 billion

In November 2017, Tencent Holdings became the first Chinese IT company worth more than $500 billion. According to this indicator, Tencent bypassed Facebook and became the fifth largest company in the world by market capitalization, behind only four American technology giants - Apple, Alphabet (Google), Microsoft and Amazon.

By the close of the Hong Kong Stock Exchange on November 22, 2017, Tencent's market capitalization amounted to HK $4.05 trillion (about $519 billion at the exchange rate that day). A day earlier, the cost reached $522 billion.

Tencent is China's first $500bn IT company

Since the beginning of 2017, Tencent shares have more than doubled in price, making the company the most expensive in Asia. At the same time, the quotes of the Chinese giant are growing faster than the Hang Seng index, which includes Tencent securities. In nearly 11 months, the Hang Seng gained 36%.

Tencent's market capitalization has more than tripled since March 2014, when it reached $150 billion, which at that time was more than Intel. The latter by November 22, 2017 was estimated at $210 billion.

According to the Reuters news agency, Tencent's rise on the exchange is due to high financial results, which the company has consistently demonstrated from quarter to quarter. In addition, Tencent is quite successfully developing the gaming business and the WeChat messenger, the monthly audience of which in 2017 approached 1 billion. The Tencent Video project (the Chinese alternative to YouTube) has become the largest video service in China in terms of the number of paid accounts.

Tencent's shares may continue to rise in price, given that the company is exploring new sources of growth through cloud, financial services, movies and music. An international expansion of the WeChat service is also planned: first, the corresponding ecosystem will be built in Malaysia.

For a long time, the largest Chinese IT company by value was Alibaba. By November 22, 2017, the market capitalization of this Internet holding had grown to $490 billion.^[9]

2009

In 2009, Tencent, according to its reporting, earned 76.6% of revenue on paid services, and only 6.6% on online advertising.

2004: Hong Kong Stock Exchange Offering

The shares are traded on the Hong Kong Stock Exchange. IPO (initial offering of shares) she conducted in 2004. As the Chinese newspaper South China Morning Post^[10] calculated^[11]if you bought Tencent shares worth 1,764, in dollar 2017 you would have been a millionaire. Have you^[12]

Notes