Tencent released his interim results on the evening of the 18th, and the next day the market gave face an increase of 3%, and then fell rapidly.

With the stock price fluctuating like this, what on earth do you think of Tencent's financial report?

Performance

According to the financial report, Q2 Tencent achieved a revenue of 138.259 billion yuan in 2021.A year-on-year increase of 20.3% and a month-on-month increase of 2.18%

The net profit of homing (Non-IFRS) is 34.039 billion yuanYear-on-year growth of 12.9%, month-on-month growth of 2.78%

Deferred income of 102.7 billion, a net increase of 4.1 billion yuan over the previous monthA net increase of 7.9 billion yuan over the same period last year.

It can be seen that although the profit growth rate in the second quarter has been relatively low in several quarters, the high base of the epidemic last year has increased greatly, and deferred revenue is relatively bright.Overall, it was higher than the consensus of the market (Bloomberg).

In terms of subdivision

Value-added services:Revenue 72 billion yuan, year-on-year + 10.7%, month-on-month-0.59%; of which game revenue was 43 billion yuan, + 12% year-on-year

Social network revenue was 29 billion yuan, up 9% from the same period last year.

Among them, mobile games (including income belonging to social network business): 40.8 billion yuan, year-on-year + 13%, month-on-month-1.69%

PC games: 11 billion yuan, year-on-year + 1%, month-on-month-7.56%.

Overall, game revenue accounts for a maximum of 37.5% of Tencent's total income, and the dependence on games is actually reduced.

Online advertising:Revenue 22.8 billion yuan, year-on-year + 22.6%, month-on-month + 4.64%

Among them, social networking and other advertising: 19.5 billion yuan, year-on-year + 28%, month-on-month + 5.40%

Media advertising: 3.3 billion yuan, year on year + 0%, month-on-month + 0%.

Financial technology and corporate services:Revenue of 41.9 billion yuan, year-on-year + 40.1%, month-on-month + 7.34%

Other:Revenue 1.5 billion yuan, year-on-year + 3.68%, month-on-month-24.4%.

In a nutshell, several major games such as "Arena of Valor", "PUBG Mobile", "Valorant", "Tribal conflict" and "Tianya Mingyue knife hand Tour" all contributed to the increase in game revenue, partly offset by the decline in the income of "Game for Peace".

Superimposed in the second quarter and did not launch new blockbuster mobile games, the performance is well-behaved; the end-tour side showed a certain slowdown in revenue.

In the earnings report on the evening of 818, in fact, the PC game is a successful performance in the eyes of the management, the platform game is gradually developing, and it has great potential to break out in the future.

In terms of advertisingFrom a long-term point of view, many enterprises are starting to use Mini Program, which will further increase Tencent's advertising revenue in the future, and is expected to grow further in Q2 and Q3. In terms of the double reduction policy, the field of training has been greatly affected, and advertising revenue in this area has also decreased accordingly, but the demand of advertisers from categories such as Internet services and consumer necessities is increasing. Media advertising is mainly caused by the decrease in revenue from news advertising.

On the whole, the demand for more and more fine advertising is increasing, while the public domain advertising with large platforms is declining.

Financial science and technologyStill maintain a very good and restrained growth, has accounted for 70% of offline payment scenarios, can be said to be quite excellent, Tencent has always maintained a low profile and risk-controllable development.(the cost of trading to banks has actually fallen, from 71% to 68%. )

As the specific data of cloud services have not been disclosed, combined with the development history of Aliyun and the market position of Tencent Cloud, Tencent Cloud is still in the period of loss.

However, Tencent Cloud has made a set of excellent products in the field of Saas: WeCom, Tencent Conference, Tencent documentation. Although these products have not been realized yet, we have to admit that they have great value and will be gradually released with the process of social digitization in the future.

Another point of concern is that the gross margin for financial and cloud services is 32%. Combined with Tencent Yunda is still losing money, so it can be foreseen that there is a lot of room for the division to improve its gross profit in the future.

The overall gross margin was 45.4%, down 0.9% from a year earlier and 0.9% from a month earlier, higher than Bloomberg's consensus forecast of 0.9%.

It is worth noting that Tencent's gross profit in this quarter increased by 18% compared with the same period last year, and the net profit increased by 13% compared with the same period last year. The difference of 5% is mainly spent on general administrative expenses (recruitment) and marketing (advertising). There is no need to worry.This is also a capital expenditure to increase employee welfare expenditure.

Main application operation data:

Combined monthly active users of Wechat and Wechat: 1.25 billion, year-on-year + 3.8%, month-on-month + 0.8%

Number of QQ mobile terminal monthly active users: 590 million, year-on-year-8.8%, month-on-month-2.6%

Number of registered accounts for paid value-added services: 230 million, year-on-year + 12.8%, month-on-month + 1.7%

Tencent video membership: 0, year-on-year + 9%, month-on-month + 125 million

On the whole, keep running smoothly, it is still the largest social software platform in China.

Regulation, tax rate

The loudest voice for supervision on the Internet belongs to the protection of minors' games.

From a statistical point of view, players under the age of 16 accounted for a proportion of Chinese games in the second quarter of this year.2.6%，In the fourth quarter of last year, the proportion was 3.2%. Half a year later, the proportion has been declining. It is more important to note that the proportion of players under the age of 12 is only0.3%。

In fact, Tencent has been working on the protection of minors since 2017, and later introduced the technical ability of face recognition to be applied to payment and more scenes.

Zero Cruise was piloted in April this year and was officially launched in July. Users who refuse or fail face verification will be taken offline as minors.

In August. Starting with the most popular "Arena of Valor" and "Game for Peace", the duration of non-statutory holiday games for minors has been reduced to 1 hour per day, with the regulatory requirement being 1.5 hours; and the statutory holiday has been reduced to 2 hours per day, with the regulatory requirement being 3 hours per day. The standard of Tencent's own implementation is even stricter than the regulatory requirements.(Quanhong Zen children have taken the lead.)

The company is also bullish on future supervision. In fact, this is a global trend, relatively speaking, it only slows down the rate of value growth, but the future increment can be sustained.

In terms of tax rates, the company's management said that Tencent does not enjoy many tax concessions at present, and if the tax policy is adjusted in the future, it is expected that the impact on profit fluctuations will not exceed 3%.

As for the anti-monopoly matter, in fact, after BABA was fined 18.2 billion yuan and cancelled the merger of HUYA Inc. and DouYu International Holdings Limited (anyway, it was all Penguin's), it roughly indicated the direction of the policy when acquiring Sogou. First, to declare; second, pay attention to the bottom line, touch what should be touched, do not reach out what should not be touched (such as the financial sector).

Social responsibility

In terms of social responsibility, it can be said that Tencent fully understood the meaning of the above and announced that he would invest another 50 billion, giving full play to the subjective initiative of the "three distributions" and contributing to common prosperity. This is Tencent's second investment of 50 billion in four months.

Mainly combined with their own digital and scientific and technological capabilities, we will provide sustained assistance in areas of people's livelihood, such as rural revitalization, income increase for low-income people, improvement of the primary health care system, balanced development of education, and so on.

In a positive and optimistic way, this is also equivalent to the government's investment in infrastructure projects in the past to contribute to the development of the country and the ultimate prosperity of national strength. The money invested by Tencent into society will also enable more people to improve their quality of life, and in the end, the money will come back when everyone has time to play games. )

More specifically, we can see that in this flood in Henan, Tencent not only announced a donation of 100 million.

What is more important than money is that Tencent urgently mobilizes product and technical resources to launch a combination toolbox of "Fast Aid to Henan". Tencent document is one of the most representative tools.

A document called "Information on rescuers" has been circulated on the Internet, which constantly collates, verifies and updates the information of rescuers and rescue workers in the severe floods in Henan Province.

This document has been "spontaneously" updated to nearly 300 editions, with more than 6.5 million visits, making it the largest "spontaneous co-building and rescue" operation in the history of Internet products. In this process, Tencent documentation product team in view of "the number of editable people has reached the upper limit" for the emergency expansion. In the latest financial report, Ma Huateng also made a special mention of the "Tencent document".

It can be said that a great enterprise is also constantly expanding its capacity and attaching equal importance to its responsibilities. what the country wants to go is not capitalism, but always socialism with characteristics, and as enterprises and people, they also need the same consciousness and vision of development. in order to enjoy the dividends of the country and move forward side by side.

Conclusion

Generally speaking, Tencent's operation is still very sound, so why does the stock price fall like this? It is because of the policy risk, for Tencent, the policy risk is the unknown of known, that is, what is known is unknown. It means that we know that there are policy risks, but we do not know the details of policy risks.

Generally speaking, the greatest risk is when the unknown of unknown has just appeared, so from the perspective of stock price, Tencent has actually passed the stage of the highest risk.

As for whether the bottom can be speculated and when can it rise again? I think we should look at it separately.

Today, it is reported that Tencent is carrying out a share buyback. We refer to Tencent's past buyback records. The last buyback was from September 2018 to October 2019. We can see that this price is indeed the bottom of Tencent at that time.

Therefore, at least we can judge the current price, the company thinks that there is value. (there is an assumption that the company knows the details of the policy and the impact of the policy on itself better than any other investor in the market.)

The next question is whether it will rise again immediately. According to the last buyback, it is obvious that the buyback is not directly related to the time of the rally. Therefore, if investors are going to copy the bottom of Tencent now, they need to be psychologically prepared to wait.
What is the risk of judging the buying range by referring to the company's buyback?

1. The impact of the company's misjudgment of policy rules on itself (if the company is wrong, then most people in the market do not have any judgment advantage)

2. The company misjudged the valuation range that the market is willing to give in the future (at this point, investors have a better judgment advantage than the company).