Annual Report - Tencent

2020

Annual Report

CONTENTS

2

CORPORATE INFORMATION

3

FINANCIAL SUMMARY

4

CHAIRMAN¡¯S STATEMENT

10

MANAGEMENT DISCUSSION AND ANALYSIS

28

DIRECTORS¡¯ REPORT

72

CORPORATE GOVERNANCE REPORT

102

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT

155

INDEPENDENT AUDITOR¡¯S REPORT

164

CONSOLIDATED INCOME STATEMENT

165

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

166

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

169

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

173

CONSOLIDATED STATEMENT OF CASH FLOWS

175

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

305

DEFINITION

Corporate Information

DIRECTORS

NOMINATION COMMITTEE

Executive Directors

Ma Huateng (Chairman)

Ma Huateng (Chairman)

Lau Chi Ping Martin

Non-Executive Directors

Jacobus Petrus (Koos) Bekker

Li Dong Sheng

29/F., Three Pacific Place

Iain Ferguson Bruce

No. 1 Queen¡¯s Road East

Ian Charles Stone

Wanchai

Charles St Leger Searle

Hong Kong

REMUNERATION COMMITTEE

CAYMAN ISLANDS PRINCIPAL

SHARE REGISTRAR AND

TRANSFER OFFICE

Charles St Leger Searle

Ian Charles Stone (Chairman)

Independent Non-Executive Directors

Li Dong Sheng

Jacobus Petrus (Koos) Bekker

Li Dong Sheng

PRINCIPAL PLACE OF BUSINESS

IN HONG KONG

Suntera (Cayman) Limited

Suite 3204, Unit 2A

Iain Ferguson Bruce

AUDITOR

Ian Charles Stone

PricewaterhouseCoopers

Yang Siu Shun

Certified Public Accountants

Ke Yang

AUDIT COMMITTEE

PRINCIPAL BANKERS

Yang Siu Shun (Chairman)

Bank of China Limited

Iain Ferguson Bruce

The Hongkong and Shanghai Banking

Ian Charles Stone

Corporation Limited

Charles St Leger Searle

REGISTERED OFFICE

Block 3, Building D

P.O. Box 1586

Gardenia Court

Camana Bay

Grand Cayman, KY1-1100

Cayman Islands

HONG KONG BRANCH SHARE

REGISTRAR AND TRANSFER

OFFICE

Computershare Hong Kong Investor

CORPORATE GOVERNANCE

COMMITTEE

Cricket Square

Hutchins Drive, P.O. Box 2681

Shops 1712-1716, 17th Floor

Charles St Leger Searle (Chairman)

Grand Cayman KY1-1111

Hopewell Centre

Iain Ferguson Bruce

Cayman Islands

183 Queen¡¯s Road East

Ian Charles Stone

Wan Chai, Hong Kong

TENCENT GROUP HEAD OFFICE

Yang Siu Shun

Ke Yang

Tencent Binhai Towers

INVESTMENT COMMITTEE

No. 33 Haitian 2nd Road

COMPANY WEBSITE



Nanshan District

Lau Chi Ping Martin (Chairman)

Shenzhen, 518054

Ma Huateng

The PRC

Charles St Leger Searle

2

Services Limited

Tencent Holdings Limited

STOCK CODE

700

Financial Summary

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended 31 December

2016

RMB¡¯Million

2017

RMB¡¯Million

2018

RMB¡¯Million

2019

RMB¡¯Million

2020

RMB¡¯Million

151,938

237,760

312,694

377,289

482,064

Gross profit

84,499

116,925

142,120

167,533

221,532

Profit before income tax

51,640

88,215

94,466

109,400

180,022

Profit for the year

41,447

72,471

79,984

95,888

160,125

Profit attributable to equity holders of the Company

41,095

71,510

78,719

93,310

159,847

Total comprehensive income for the year

48,617

79,061

67,760

119,901

281,173

Total comprehensive income attributable to

equity holders of the Company

48,194

78,218

66,339

116,670

277,834

Non-IFRS profit attributable to

equity holders of the Company

45,420

65,126

77,469

94,351

122,742

Revenues

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at 31 December

2016

RMB¡¯Million

2017

RMB¡¯Million

2018

RMB¡¯Million

2019

RMB¡¯Million

2020

RMB¡¯Million

Assets

Non-current assets

Current assets

246,745

149,154

376,226

178,446

506,441

217,080

700,018

253,968

1,015,778

317,647

Total assets

395,899

554,672

723,521

953,986

1,333,425

Equity and liabilities

Equity attributable to equity holders of the Company

Non-controlling interests

174,624

11,623

256,074

21,019

323,510

32,697

432,706

56,118

703,984

74,059

Total equity

186,247

277,093

356,207

488,824

778,043

Non-current liabilities

Current liabilities

108,455

101,197

125,839

151,740

164,879

202,435

225,006

240,156

286,303

269,079

Total liabilities

209,652

277,579

367,314

465,162

555,382

Total equity and liabilities

395,899

554,672

723,521

953,986

1,333,425

Annual Report 2020

3

Chairman¡¯s Statement

I am pleased to present our annual report for the year ended 31 December 2020 to the shareholders.

RESULTS

The Group¡¯s audited profit attributable to equity holders of the Company for the year ended 31 December 2020 was

RMB159,847 million, an increase of 71% compared with the results for the previous year. Basic and diluted EPS for the year

ended 31 December 2020 were RMB16.844 and RMB16.523, respectively.

The Group¡¯s non-IFRS profit attributable to equity holders of the Company for the year ended 31 December 2020 was

RMB122,742 million, an increase of 30% compared with the results for the previous year. Non-IFRS basic and diluted EPS for

the year ended 31 December 2020 were RMB12.934 and RMB12.689, respectively.

OPERATING INFORMATION

As at

As at

31 December

31 December

2020

2019

Year-on-

As at

Quarter-on-

year 30 September

quarter

change

2020

change

(in millions, unless specified)

1,225.0

1,164.8

5.2%

1,212.8

1.0%

Smart device MAU of QQ

594.9

647.0

-8.1%

617.4

-3.6%

Fee-based VAS registered subscriptions

219.5

180.1

21.9%

213.4

2.9%

Combined MAU of Weixin and WeChat

BUSINESS REVIEW AND OUTLOOK

Strategic Progress and Outlook

While 2020 was an unprecedentedly challenging year, we believe our solid operational and financial results testify to our focus

on user value and technology innovation. Below are some highlights from our key products and business lines:

Communication and Social

Throughout the past decade, Weixin has evolved from an instant messaging app to a service meeting the digital needs of over

1.2 billion users. Each day, more than 120 million users post in Moments, 360 million users read Official Accounts articles and

400 million users access Mini Programs. SMEs and brands increasingly connect with users via Mini Programs and Weixin Pay,

and annual transaction volume generated from Mini Programs more than doubled year-on-year in 2020.

4

Tencent Holdings Limited

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