Tencent (00700) adjusted net profit for the third quarter was $44.921 billion, a 39% increase year-on-year.

TENCENT (00700) achieved a total revenue of RMB 154.625 billion in the third quarter of 2023, a year-on-year growth of 10%; net profit of RMB 36.182 billion, a year-on-year decrease of 9%; adjusted net profit of RMB 44.921 billion, a year-on-year growth of 39%. In the first three quarters, TENCENT's revenue reached RMB 453.819 billion, an increase of 11% compared to the same period last year; net profit was RMB 88.191 billion, an increase of 8% compared to the same period last year. Business Highlights: Value-added services: Revenue of RMB 75.7 billion, estimated at RMB 77.9 billion. Financial technology and enterprise services: Revenue of RMB 52 billion, estimated at RMB 50.71 billion. WeChat and WECHAT: Monthly active accounts of 1.34 billion, estimated market value of 1.33 billion. Video accounts: Total video views increased by over 50% compared to the same period last year, benefiting from a thriving creator community and improved user engagement. Big Models: Upgrading the self-developed basic model Tencent Mixyuan and deploying it in internal products. Music paying members: Increased by 21% to 103 million compared to the same period last year, while ARPU increased by 17%. Video paying members: Decreased by 3% compared to the same period last year, but increased by 1% compared to the previous quarter, reaching 117 million. The following is the full text of the financial report: Tencent Announces 2023 Third Quarter Results Hong Kong, November 15, 2023 - Tencent Limited ("Tencent" or the "Company", stock code: 00700) a leading provider of internet value-added services in China, today announced its unaudited consolidated results for the third quarter ended September 30, 2023. Summary of 2023 Third Quarter Results Total revenue: 10% year-on-year growth, adjusted net profit attributable to equity holders of Tencent: 39% year-on-year growth Total revenue reached RMB 154.6 billion (USD 21.5 billion), an increase of 10% compared to the third quarter of 2022 ("YoY"). Excluding the impact of certain non-recurring and/or non-cash items to reflect the performance of core businesses: Operating profit reached RMB 55.5 billion (USD 7.7 billion), a 36% increase YoY, with an operating profit margin rising from 29% to 36% compared to the same period last year. Net profit reached RMB 45.8 billion (USD 6.4 billion), a 37% increase YoY, with a net profit margin rising from 24% to 30% compared to the same period last year. Net profit attributable to equity holders of Tencent reached RMB 44.9 billion (USD 6.3 billion), a 39% increase YoY. Basic earnings per share reached RMB 4.753, and diluted earnings per share reached RMB 4.657. In accordance with International Financial Reporting Standards: Operating profit reached RMB 48.5 billion (USD 6.8 billion), a 6% decrease YoY, with an operating profit margin falling from 37% to 31% compared to the same period last year. Net profit reached RMB 36.8 billion (USD 5.1 billion), a 5% decrease YoY, with a net profit margin falling from 28% to 24% compared to the same period last year. Net profit attributable to equity holders of Tencent reached RMB 36.2 billion (USD 5 billion), a 9% decrease YoY. Basic earnings per share reached RMB 3.828, and diluted earnings per share reached RMB 3.752. Cash and cash equivalents at the end of the period amounted to RMB 387.4 billion (USD 54 billion). Chairman and CEO Ma Huateng commented, "In the third quarter of 2023, we achieved solid and high-quality revenue growth, significant improvement in profit margins, and structural operating leverage. Emerging businesses such as Video Accounts and mini-games contributed to our high-profit revenue sources, while we shifted our focus from businesses with limited growth potential to those with higher growth potential. We are increasing our investment in AI models to empower our products with new capabilities and enhance precision recommendations for content and advertising. We are not only committed to positioning leading AI capabilities as a multiplier for our own business development, but also to creating value for our corporate customers and the entire society." 2023 Third Quarter Financial Review Revenue from Value-added services increased by 4% YoY to RMB 75.7 billion in the third quarter of 2023. International market gaming revenue increased by 14% to RMB 13.3 billion, with a growth rate of 7% excluding the impact of exchange rate fluctuations. Revenue from specific games such as "PUBG Mobile," "Goddess of Victory: Niji," "VALORANT," and "Triple Match 3D" contributed to the revenue growth, while the revenue of "Fantasy Tower" was lower than the same period last year. Domestic market gaming revenue increased by 5% to RMB 32.7 billion, driven by the release of "Arknights," "Fearless Contract," and the increased revenue of perennial games such as "Honor of Kings" and "Dungeon Fighter." Social network revenue remained stable at around RMB 29.7 billion, as increased revenue from music paying members, mini-game platform service fees, and mobile game virtual item sales were offset by decreased revenue from music live streaming and game live streaming services. Revenue from Online Advertising reached RMB 25.7 billion in the third quarter of 2023, a YoY increase of 20%, driven by strong demand for Video Accounts, our mobile advertising alliance, and WeChat search advertising, with significant growth in the local services and fast-moving consumer goods industries. Revenue from Financial technology and enterprise services increased by 16% YoY to RMB 52 billion in the third quarter of 2023. Financial technology service revenue continued to grow at a double-digit rate, driven by increased commercial payment activities and growth in wealth management service revenue. Enterprise service revenue achieved faster YoY growth in the third quarter of 2023, benefiting from our optimization of cloud service business structure in the earlier period and increased technology service fees from Video Accounts driving sales. Other Key Financial Information for the Third Quarter of 2023 EBITDA reached RMB 55.8 billion, a YoY increase of 29%. Adjusted EBITDA reached RMB 61.3 billion, a YoY increase of 26%. Capital expenditure amounted to RMB 8 billion, a YoY increase of 237%. Free cash flow reached RMB 51.1 billion, a YoY increase of 85%. As of September 30, 2023The company's net cash amount is CNY 36.4 billion. The fair value of our investments in listed investment companies (excluding subsidiary companies) is CNY 464.4 billion (USD 64.7 billion), and the book value of our investments in unlisted companies is CNY 347.2 billion (USD 48.4 billion). In the third quarter, the company repurchased approximately 47.52 million shares on the Hong Kong Stock Exchange with a total cost of around CNY 14 billion.Business Performance Highlights of business review and selected product performances: In terms of WeChat, the total number of video views increased by over 50% compared to last year, benefiting from a thriving creator community and an increasingly engaged user base. The growth in views of original content has been strong, currently accounting for the majority of the total video views on WeChat. As for QQ, we are enhancing the features of QQ Channels, utilizing software tools such as voice chat and event management to support the operation of interest-based communities for users with common hobbies, activities, or membership. The number of paid video members decreased by 3% compared to last year but increased by 1% compared to the previous quarter, reaching 117 million. The number of paid music members increased by 21% compared to last year, reaching 103 million, while ARPU increased by 17%. Esports were officially included as a competitive event in the 19th Asian Games and Tencent's four published esports games were included in the national medal tally. Recently launched games in the domestic market include the tactical shooting PC game "Unwavering Contract," the hero shooting mobile game "High Energy Heroes," and the MMORPG mobile game "MapleStory: Maple Legend." Recently launched games in the international market include the first-person tactical shooting mobile game "Dark Zone Breakout." Advertising revenue generated from WeChat's ecosystem (including WeChat Mini Programs, Video Channels, Official Accounts, and Enterprise WeChat) increased by over 30% compared to last year, contributing to more than half of WeChat's total advertising revenue. Video Channel advertising revenue increased significantly quarter-on-quarter due to an increase in video views and user engagement, while the ad load rate remained stable. We have expanded the parameters of our advertising AI models to improve targeting and attribution accuracy. We have also started to provide advertisers with generative AI tools that allow them to automatically generate ad materials through text descriptions and adapt them to various ad inventory, generating multiple sizes of creative assets. We are upgrading our proprietary foundational model, Tencent Mixed Yuan, and deploying it in internal products while also opening it up for external enterprise customers. This article is reproduced from Tencent's selected stocks, GMTEight editing by Chen Xiaoyi.