Table of Contents

Financial Highlights

2018 Third Quarter
Total Revenue
80.6 billion RMB, +24% YoY
Net Profit attr. to Shareholders
19.7 billion RMB, +15% YoY
23.3 billion RMB, +30% YoY
Diluted EPS
2.061 RMB, +15% YoY
2.440 RMB, +29% YoY

Key Platforms Update

Weixin & WeChat
1,082 m, +10% YoY
803 m,
Smart Devices:
698 m, +7% YoY
Monthly Active Users as of 30 Sept 2018

Strategic Highlights

Embracing the Industrial Internet

  • Extend our “Connection” Strategy from connecting people, content and services to helping industries expand via digital channels
  • Enable industries to benefit from:
    • Mobile Internet ubiquity
    • Data insights
    • Applied AI
  • Position as a digital assistant to facilitate and empower our partners while respecting their independence
  • Tencent capabilities and infrastructure to support clients' upgrades:
    • High-traffic platforms connect industries with users
    • Enterprise services (Mini Programs, Official Accounts, WeChat Work, mobile payment) facilitate communications and transactions
    • Advanced technologies (cloud services, AI, big-data analytics) unlock data value
    • Large ecosystem with strategic partnerships offers industry knowledge and customer understanding, empowering customer-specific solutions

Strategic Highlights

Cloud Services

  • Fast growing and gaining market share
    • Revenue over RMB6 billion for 1Q-3Q18, more than doubled YoY
    • Further strengthening cloud services position in games, video and other Internet services, while advancing into finance, municipal, smart retail and industrial
    • Paying customers grew at a triple-digit rate YoY
  • Initiatives to sustain future growth
    • Technology - integrate our proprietary technologies into cloud-based solutions
    • Offerings - continue to expand products to more than 200 and industry solutions to over 70(IaaS, PaaS, SaaS, AIaaS)
    • Cost - scale and continuous cost optimisation enable cost-effective products and services
    • Customer acquisition -
      • Cooperate with over 4,000 channel partners (ISVs, strategic partners)
      • Unified sales teams, increasing efficiency in acquiring KAs
      • Leverage synergies from enterprise services, e.g. Mini Programs, to attract SMEs

Strategic Highlights

Smart Healthcare

Industry Status

  • Challenges
    • Under-resourced healthcare providers
    • Patients lack objective information about providers
    • Communication between healthcare providers and patients sporadic and disconnected
  • Solutions
    • Apply AI to enhance providers' capabilities (e.g. diagnosis)
    • Link patients to most relevant providers
    • Simplify and systemise provider-to-patient communications
  • Opportunities
    • Cloud and AI services to healthcare providers
    • Mobile payment adoption
    • Value-added services to patients

Strategic Highlights

Smart Healthcare (cont'd)

Tencent Offerings

  • For patients:
    • Hospital registration and video inquiry via Official Accounts and Mini Programs
    • Pay for treatment expense via Weixin Pay
    • Tencent Medipedia, an online medical resource, covering >1,000 symptoms, serving Weixin, QQ, Mobile QQ Browser users
  • For medical industry:
    • Tencent AIMIS has read >100 million films and served >1 million patients, assisting doctors in polyps screening and diagnosis
    • Security, cloud computing, AI and big-data analytics capabilities to strengthen staff management and patient-relationship management

Strategic Highlights

Smart Transportation

Industry Status

  • Trends & Challenges
    • In-car connectivity
    • Electric vehicles
    • Autonomous driving
    • OEMs desire to connect more closely with customers
    • Transport-as-a-service
  • Solutions
    • In-car internet services, voice user interface, location, navigation and AD assisted driving
    • OEMs: cloud-based solutions and CRM
    • Public transportation companies: cloud-based solutions
  • Opportunities
    • Cloud services for OEMs and transportation companies
    • Expanding use cases for digital content
    • Marketing for cars and related services

Strategic Highlights

Smart Transportation (cont'd)

Tencent Offerings

  • For drivers/passengers:
    • Integrate Weixin and our digital content services, e.g. music, video, reading, into vehicles’ smart systems
    • Transit QR Code based on Mini Programs serves over 50 million passengers in 120 cities
  • For transport industry:
    • Tencent LBS: over 60 billion daily location requests, empowering car navigation
    • Tencent Auto Intelligence (TAI): in-car internet service ecosystem with 15 OEMs
    • Tencent Autonomous Driving (TAD): HD map, simulation, cloud computing and security

Revenue Mix


Value Added Services Revenue

in billions, RMB
Online Games
Social Networks

Online Advertising Revenue

in billions, RMB
Social and Others

Segment Gross Margin

VAS (%)
Online Advertising (%)
Others (%)

Operating Expenses

in billions, RMB
in billions, RMB
G&A excl. R&D
in billions, RMB

Margin Ratios

GAAP Gross Margin (%)
Non-GAAP Net Margin (%)
Operating Margin (%)

CAPEX and Credit Metrics

2018 Third Quarter
6.0billion RMB,
+71% YoY
Total Debt
173.7billion RMB,
+32% YoY
Debt to (adj.)
EBITDA ratio
Free Cash Flow
26.4billion RMB,
-4% YoY
Net Debt
29.2billion RMB
Fair Market Value of
our listed investee companies*
273.1billion RMB

*Excluding subsidiaries

For More Information

Investor Relations