Tencent and Ali performance are released! Tencent's net profit increased by 62% year-on-year, and Alibaba's net profit fell by nearly 100%

Time Finance

2024-05-15 15:14Published on the official account of Financial News under Beijing Beijing Time

On the evening of May 14, Chinese Internet giants Tencent Holdings and Alibaba Group announced their results for the first quarter of 2024 and the fourth quarter of fiscal 2024 (i.e., the first quarter of 2024 in the natural quarter) respectively.

Tencent Holdings announced that its revenue in the first quarter was 159.501 billion yuan, estimated at 158.81 billion yuan, a year-on-year increase of 6%; net profit was 41.9 billion yuan, a year-on-year increase of 62%; The adjusted net profit was 50.27 billion yuan, estimated at 43 billion yuan, a year-on-year increase of 54%.

Alibaba announced that its revenue in the fourth quarter of fiscal year 2024 was 221.87 billion yuan, a year-on-year increase of 7%, and the market estimate was 219.79 billion yuan, and the net profit was 919 million yuan, a year-on-year decrease of 96%; The adjusted net profit was 24.418 billion yuan, down 11% year-on-year.

According to the analysis, Tencent's performance is beyond expectations, after the adjustment of the past few years, Tencent has stepped out of the recovery trend, but Alibaba's performance is still a little struggling.

Tencent's performance exceeded expectations

On May 14, Tencent Holdings announced that its revenue in the first quarter was 159.501 billion yuan, a year-on-year increase of 6%; Net profit was 41.9 billion yuan, up 62% year-on-year, and adjusted net profit was 50.27 billion yuan, up 54% year-on-year.

Specifically, in the first quarter, Tencent Holdings' value-added service business revenue fell by 0.9% year-on-year to 78.6 billion yuan. Among them, the game business in the international market increased by 3% year-on-year to RMB13.6 billion, the total turnover of games in the domestic market recovered year-on-year with an increase of 3%, and the game revenue in the domestic market decreased by 2% year-on-year to RMB34.5 billion, mainly due to the deferred revenue. Social network revenue fell 2% to $30.5 billion.

In addition, in the first quarter, Tencent Holdings' online advertising revenue increased by 26% year-on-year to RMB26.5 billion, mainly driven by the growth of WeChat Channels, Mini Programs, Official Accounts and Soyisou, as well as increased user engagement and the upgrading of its AI-powered advertising technology platform. Advertising spending increased in all major sectors except the automotive industry, with significant growth in gaming, internet services and consumer goods.

In the first quarter, Tencent Holdings' financial technology and enterprise services business revenue increased by 7% year-on-year to 52.3 billion yuan. Tencent Holdings said that fintech service revenue increased by a single-digit percentage year-on-year, mainly due to the slowdown in offline consumer spending growth and lower cash withdrawal revenue, while wealth management service revenue grew strongly. The year-on-year growth rate of enterprise service business revenue was more than 10 points, due to the increase in cloud service revenue and technical service fees of Channels merchants.

In terms of gross profit, in the first quarter, Tencent Holdings' gross profit increased by 23% year-on-year to 83.9 billion yuan, and the gross profit margin increased to 53% from 45% in the same period last year. According to Tencent Holdings, the increase in gross profit was due to the rapid growth of high-gross margin revenue sources, including advertising revenue from WeChat Channels and Soyisou, service fees for Mini Game platforms, financial service revenues and technical service fees for Channels merchants. The improved cost efficiency of the company's long-form video and cloud businesses also contributed to the gross profit growth.

Tencent Holdings said that in the first quarter, the total user time of Channels increased by more than 80% year-on-year, and the total user time of Mini Programs increased by more than 20% year-on-year.

Tencent Holdings said that it will increase its repurchase efforts, implement a share repurchase of more than HK$100 billion in 2024 as planned, increase dividends, and continue to invest in AI technology, improve the platform and produce high-value content.

Alibaba's quarterly net profit plummeted by nearly 100%

On the evening of May 14, Alibaba Group released its results for the fourth quarter and full year (April 2023 to March 2024) of fiscal year 2024. Alibaba Group's revenue in the fourth quarter (January-March 2024) was 221.874 billion yuan, a year-on-year increase of 7%, exceeding market expectations. net profit was 919 million yuan, down 96% year-on-year.

Note: Performance for the three months ended 31 March

Affected by this news, Alibaba's U.S. stocks closed down more than 6% overnight.

As for the sharp drop in net profit, Alibaba explained that it was mainly due to the net loss caused by the change in the mark-to-market value of its equity investment in listed companies, compared with net income in the same period last year.

Excluding certain items such as equity incentive expenses, gains (losses) on investments, and impairment of intangible assets, non-GAAP net profit was RMB24.418 billion (approximately US$3.382 billion), down 11% from the same period last year.

According to the 13F U.S. stock position documents submitted by Alibaba, in the first quarter, Alibaba liquidated 10 million shares of Bilibili and 8.43 million shares of Zhiwen Group (Momo's parent company), and bought more than 1.7 million shares to build a position in Zhihu. Maintain the positions of Xpeng Motors and Weibo unchanged.

By the end of the first quarter, Alibaba's total U.S. stock holdings fell from $421 million to $154 million.

Take Bilibili, for example. Previously, it was reported that Taobao China Holdings Co., Ltd., a subsidiary of Alibaba, the majority shareholder, no longer owns any ordinary shares or American depositary shares of Bilibili. In addition, reports of Alibaba's stake in Bilibili have appeared as early as March 22.

Look at Xpeng Motors again. On March 22, Taobao China Holdings Co., Ltd., a subsidiary of Alibaba, completed the sale of 33 million ADSs (representing 66 million Class A ordinary shares) of Xpeng Motors, according to the disclosure of interests in the Hong Kong Stock Exchange.

In the Hong Kong stock market, Alibaba sold 838,400 shares of Kuaigou Dache last year, with a transaction value of about HK$423,000.

(Source: Announcements of Listed Companies, China Securities News, Finance Associated Press, etc.)

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