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) Lau Chi Ping Martin

Non-Executive Directors

Ma Huateng (Chairman) Li Dong Sheng Iain Ferguson Bruce Ian Charles Stone Charles St Leger Searle

Jacobus Petrus (Koos) Bekker Charles St Leger Searle

Independent Non-Executive Directors Li Dong Sheng Iain Ferguson Bruce Ian Charles Stone Yang Siu Shun Ke Yang

REMUNERATION COMMITTEE

Ian Charles Stone (Chairman) Li Dong Sheng Jacobus Petrus (Koos) Bekker

AUDITOR

PricewaterhouseCoopers Certified Public Accountants

AUDIT COMMITTEE

Yang Siu Shun (Chairman) Iain Ferguson Bruce Ian Charles Stone Charles St Leger Searle

CORPORATE GOVERNANCE COMMITTEE

Charles St Leger Searle (Chairman) Iain Ferguson Bruce Ian Charles Stone Yang Siu Shun Ke Yang

INVESTMENT COMMITTEE

Lau Chi Ping Martin (Chairman) Ma Huateng Charles St Leger Searle

PRINCIPAL BANKERS

Bank of China Limited The Hongkong and Shanghai Banking

Corporation Limited

REGISTERED OFFICE

Cricket Square Hutchins Drive, P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

TENCENT GROUP HEAD OFFICE

Tencent Binhai Towers No. 33 Haitian 2nd Road Nanshan District Shenzhen, 518054 The PRC

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

29/F., Three Pacific Place No. 1 Queen's Road East Wanchai Hong Kong

CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Suntera (Cayman) Limited Suite 3204, Unit 2A 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 Services Limited

Shops 1712-1716, 17th Floor Hopewell Centre 183 Queen's Road East Wan Chai, Hong Kong

COMPANY WEBSITE



STOCK CODE

700

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Tencent Holdings Limited

Financial Summary

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

2016 RMB'Million

Year ended 31 December

2017 RMB'Million

2018 RMB'Million

2019 RMB'Million

Revenues Gross profit Profit before income tax Profit for the year Profit attributable to equity holders of the Company Total comprehensive income for the year Total comprehensive income attributable to

equity holders of the Company Non-IFRS profit attributable to

equity holders of the Company

151,938 84,499 51,640 41,447 41,095 48,617

48,194

45,420

237,760 116,925 88,215 72,471 71,510 79,061

78,218

65,126

312,694 142,120 94,466 79,984 78,719 67,760

66,339

77,469

377,289 167,533 109,400 95,888 93,310 119,901

116,670

94,351

2020 RMB'Million

482,064 221,532 180,022 160,125 159,847 281,173

277,834

122,742

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

2016 RMB'Million

As at 31 December

2017 RMB'Million

2018 RMB'Million

2019 RMB'Million

Assets Non-current assets Current assets

Total assets

Equity and liabilities Equity attributable to equity holders of the Company Non-controlling interests

Total equity

Non-current liabilities Current liabilities

Total liabilities

Total equity and liabilities

246,745 149,154 395,899

174,624 11,623 186,247 108,455 101,197 209,652 395,899

376,226 178,446 554,672

256,074 21,019 277,093 125,839 151,740 277,579 554,672

506,441 217,080 723,521

323,510 32,697 356,207 164,879 202,435 367,314 723,521

700,018 253,968 953,986

432,706 56,118 488,824 225,006 240,156 465,162 953,986

2020 RMB'Million

1,015,778 317,647

1,333,425

703,984 74,059 778,043 286,303 269,079 555,382 1,333,425

Annual Report 2020

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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

Year-on-

As at

31 December 31 December

year 30 September

2020

2019

change

2020

(in millions, unless specified)

Quarter-onquarter change

Combined MAU of Weixin and WeChat Smart device MAU of QQ Fee-based VAS registered subscriptions

1,225.0 594.9 219.5

1,164.8 647.0 180.1

5.2% -8.1% 21.9%

1,212.8 617.4 213.4

1.0% -3.6% 2.9%

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.

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Tencent Holdings Limited

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