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In 2021, Tencent's revenue was 560.118 billion yuan, an increase of 16% year-on-year. Net profit was 123.788 billion yuan, an increase of only 1% year-on-year. It is worth noting that this is the lowest increase in Tencent's net profit in the past decade.
Author 丨 Tianyu
Edit 丨 nuts
Cover source 丨 Figureworm Creative
Tencent in 2021 is not doing well.
On March 23, Tencent released its 2021Q4 and full-year financial reports. According to the financial report, in Q4 2021, Tencent's total revenue was 144.2 billion yuan, an increase of 8% year-on-year. Net profit was only 24.88 billion, down 25% year-on-year.
Throughout the year, Tencent also continued to be under pressure. According to the financial report, in 2021, Tencent's revenue was 560.118 billion yuan, an increase of 16% year-on-year. Net profit was 123.788 billion yuan, an increase of only 1% year-on-year. It is worth noting that this is the lowest increase in Tencent's net profit in the past decade.
In this regard, Ma Huateng, chairman and CEO of Tencent, joked: "After swimming for a year and shooting films, I found that my lumbar intervertebral disc was similar to Tencent's situation in 2021 - less prominent, and even missing a piece." ”
Although from Ma Huateng's ridicule, we do not see too much anxiety, but combined with the entire Internet environment, Tencent's "answer sheet" in 2021 actually echoes the dark tide of industry changes.
1
Say goodbye to the era of high net profit
To understand Tencent's 2021 financial report, we must turn the wheel of time back to ten years ago, because it was this year that Tencent established a new development strategy.
In 2011, after the 3Q war and the market value was surpassed by Baidu, Tencent fell into a trough. "Tencent Biography" also wrote: "Ma Huateng was exhausted, and even began to doubt his "product beliefs". ”
Because of this, Tencent began to think about the way of transformation. In early 2011, at a general meeting to discuss "what is Tencent's open capability", Ma Huateng and executives discussed Tencent's core capabilities. It was finally determined that Tencent's core capabilities are capital and traffic.
This also laid the foundation for Tencent's "investment banking thinking", in short, Tencent no longer has to personally "imitate" opponents, but to cut off the repetitive, unprofitable, bad prospects, and not good at business, through capital and traffic, "empower" vertical giants, let these giants to operate the above businesses, and only focus on high-margin businesses.
With the blessing of this strategy, Tencent has repeatedly created wealth myths. Taking the 2018 financial report as an example, Tencent's annual revenue was 312.694 billion yuan, an increase of 32% year-on-year; net profit was 77.469 billion yuan, an increase of 19% year-on-year. Affected by this favorable data, Tencent's stock price has increased by about ten times from about HK$40/share in 2011 to about HK$400/share today.
However, in 2021, Tencent's "investment banking strategy" began to fail. From the beginning of the financial report, it is not difficult to find that although Tencent's revenue is still growing, its net profit has continued to decline.
This is largely due to the stagnation of Tencent's "cash cow" and traffic and other pillar business growth.
Considering that the growth rate of net profit data in Tencent's financial report is slowing down, it is foreseeable that Tencent is about to bid farewell to the era of high net profit.
2
The Internet industry is changing
Tencent's poor financial performance, of course, is not because of Tencent's slackness, to a large extent, due to the entire Internet industry into a period of adjustment.
First of all, after more than a decade of running wildly, the mobile Internet has basically covered the vast majority of people, and there is no fresher traffic for the giants to dig.
According to the "2021 China Mobile Internet Annual Report" released by QuestMobile, by the end of 2021, the monthly active users of China's mobile Internet will be 1.174 billion, an increase of only 1.38% year-on-year. It is not difficult to cross-compare the WeChat monthly active data mentioned above, which covers almost the entire population using China's mobile Internet.
In fact, not only social, but even the business in the segment of games has encountered growth bottlenecks.
According to the "2021 China Game Industry Report" released by the Game Work Committee and the China Game Industry Research Institute, in 2021, the sales revenue of China's game market was 296.513 billion yuan, an increase of only 6.4% year-on-year, and the growth rate contracted by 15%. In terms of user scale, the number of game users in China in 2021 will be 666 million, an increase of only 0.22% year-on-year.
At the same time, the relevant departments have also noticed that Internet companies, under the inducement of interests, attract users' attention through algorithms, games, entertainment and other functions, so they have repeatedly strengthened supervision.
Taking games as an example, in September 2021, the relevant departments issued new regulations on the prevention of addiction of minors in online games, strictly limiting the online time of minors' online games. At the same time, since the approval list of domestic online game version numbers was announced in July 2021, the relevant departments have not updated the domestic online game version numbers.
In this context, not only Tencent's game revenue has dropped sharply, but other Internet giants cannot be left alone. At the end of 2021, Interface News sent a message saying that Baidu's mobile ecological business group plans to lay off more than 300 employees for the game business team, "Baidu has reduced the budget of the game department since the fourth quarter." ”
On February 21, 2022, there were rumors on the Internet that there would be no more game version updates in 2022, and at the close of the day, Tencent's stock price fell by 5.23%, and the market value evaporated by HK$150 billion.
Although Zhang Jun, general manager of the public relations department of Tencent Group, called the news a rumor, under the pressure of policy and traffic contraction, Tencent's stock still "fell and fell". As of the close of trading on March 24, 2022, Tencent shares were only HK$366 per share, down 51.84% from the high of HK$760 per share a year ago.
With the example of Tencent in the past, whether from the perspective of supervision or the Internet industry, Internet companies need to say goodbye to the disorderly development model that once relied on traffic and capital, and explore a new development path.
3
Once again, the giants met in a narrow way
The reason why the relevant departments supervise the Internet giants is because these giants have violated relevant laws and regulations, and the deeper level is mainly because these Internet companies have not really empowered the real economy.
In short, most Internet companies used to shout about improving efficiency, but they used traffic as a chip to "squeeze" the real economy and did not create much real value.
For example, although Meituan takeaway can improve the operational efficiency of restaurants, it needs to take a commission of about 20%. In 2020, the commission income of Meituan takeaway reached 58.6 billion yuan. The guangdong catering association official micro issued the "Guangdong catering industry to the Meituan takeaway joint negotiation letter" pointed out, "the high additional sales commission charged by the Meituan takeaway to the catering enterprises has exceeded the limit of the catering enterprises." ”
In fact, as early as the 930 revolution in 2018, Tencent saw that the wind direction of the Internet industry was changing, and took the initiative to explore the industrial Internet with higher thresholds and thinner profits, but required core competitiveness.
In view of the performance in 2021, Ma Huateng also said: "In the face of industry challenges, the company actively embraces change, reduces costs and increases efficiency, focuses on key strategic areas, and strengthens long-term sustainable development initiatives. In short, Tencent next hopes to empower the real economy and not play the "zero-sum game" with the real economy, so as to achieve a win-win situation.
For example, Tencent's all-weather multi-channel artificial intelligence customer service Tencent enterprise point has helped more than 1 million enterprises reduce customer service costs.
From the financial report, we can also see Tencent's determination to transform. According to the financial report, in 2021, Tencent's annual research and development expenses were 51.88 billion yuan, an increase of 33.1% year-on-year. The company's R&D expense ratio was 9.3%, up from 8.1% in 2020. The "2021 Tencent R&D Big Data Report" also shows that the number of Tencent R&D personnel in 2021 increased by 41% year-on-year, with more than 6,000 new R&D projects.
However, these areas are not a blue ocean for Tencent, but a red ocean that needs to continue to fight. Because Ali, Baidu, and ByteDance have also increased this track. For example, in July 2021, Alibaba CEO Daniel Zhang made it clear: "Ali wants to become a two-wheel drive company of consumer Internet and industrial Internet." ”
However, because the previous business center has been on the C-side, Compared with competitors, Tencent's performance on the B-side is not eye-catching. Taking the B-end entrance "social" as an example, the data released by Questmobile shows that in August 2021, DingTalk's monthly active life was 193 million, while the enterprise WeChat monthly active was only 83.64 million, less than a fraction of DingTalk's.
Considering that Tencent has always been rooted in the social relationship chain, although there are still C-end basic disks, from the perspective of financial report data, C-end traffic has peaked. In this context, how Tencent makes up for the shortcomings of the B-side online office product traffic lags behind seems to be a more critical task than improving gross profit.