Tencent reported revenues of CNY 84.9 billion for the fourth quarter, up 28 percent from a year earlier as growth in social networks, payments and online content helped offset flat revenues from gaming. The company's net profit fell 35 percent to CNY 14.0 billion, due to costs for the IPO of Tencent Music and several disposal gains in the year-earlier period. Adjusted EBITDA rose 18 percent to CNY 29.7 billion.
Tencent said games revenue was flat year-on-year at CNY 24.2 billion in Q4, due to a decline in PC games, while smartphone games grew by 12 percent to CNY 19 billion. New launches have been delayed due to the industry regulator suspending licences for nine months. The authorisations resumed in December and Tencent said it's had eight games, including seven for mobile, approved so far. The launch of a 'Healthy Gameplay' system to protect minors has not had a significant impact on adult time spent on the games, the company said.
Social networks revenue grew 25 percent to CNY 19.5 billion, thanks to expansion in content such as live broadcasts and video streaming subscriptions. Online advertising revenue jumped 38 percent to CNY 17.0 billion, led by growth at Weixin Moments, Mini Programs and QQ KanDian. The combined monthly active users of Weixin and WeChat increased to 1.098 billion at year-end, up by 11 percent over the year, and the group said it had more than 100 million digital content subscribers, up by 50 percent from 2017. Tencent Video expanded its subscriptions to 89 million, up 58 percent year-on-year, driven by premium content and cross-promotions.
The company also grew revenue from other businesses, by 72 percent to CNY 24.2 billion, thanks to expansion in fintech and cloud services as well as film and television production. Daily transactions on its payment platform exceed 1 billion by year-end, and Weixin Pay was expanded to 49 markets outside Mainland China last year.
Looking ahead, Tencent said it plans to invest in infrastructure and expanding in industrial internet services, including more services for enterprises using its cloud, social and fintech platforms. To offset the difficulties on the Chinese gaming market, it's working on expanding its games business abroad and announced a new partnership with Razer to optimise its games for Razer hardware and cooperate on monetisation opportunities.
