SHENZHEN, China, March 21,
2023 /PRNewswire/ -- Tencent Music Entertainment Group ("TME," or the
"Company") (NYSE: TME and HKEX: 1698), the leading online music and
audio entertainment platform in China, today announced its unaudited financial
results for the fourth quarter and full year ended December 31, 2022.
Financial Highlights
In the three months ended December 31,
2022:
- Net profit attributable to equity holders of the Company
was RMB1.15 billion (US$167 million), representing a 114.7%
year-over-year growth. Non-IFRS net profit attributable to
equity holders of the Company[1] was RMB1.44 billion (US$208
million), representing a 72.8% year-over-year growth.
- Total revenues were RMB7.43
billion (US$1.08
billion).
- Revenues from music subscriptions were RMB2.35 billion (US$341
million), representing a 20.6% year-over-year growth. Paying
users reached 88.5 million, increasing by 16.1% year-over-year. On
a sequential basis, the number of online music paying users grew by
3.2 million.
- Diluted earnings per ADS was RMB0.72 (US$0.11)
and ADS used in diluted earnings per ADS computation was
1.59 billion.
- Total cash, cash equivalents, term deposits and
short-term investments as of December
31, 2022 were RMB27.4 billion
(US$3.97 billion).
In the full year ended December 31,
2022:
- Net profit attributable to equity holders of the Company
was RMB3.68 billion (US$533 million), representing a 21.4%
year-over-year growth. Non-IFRS net profit attributable to
equity holders of the Company[1] was
RMB4.75 billion (US$688 million), representing a 14.4%
year-over-year growth.
- Total revenues were RMB28.34
billion (US$4.11
billion).
- Revenues from music subscriptions were RMB8.70 billion (US$1.26
billion), representing an
18.6% year-over-year growth.
"Amid a fast-changing macro environment in 2022, we continued to
innovate our services and carried out effective cost optimization
measures, leading to strong growth in our full-year profitability
as well as steady growth in online music subscriptions throughout
the year," said Mr. Cussion Pang, Executive Chairman of TME. "Our
diversified suite of monetization tools expanded and made progress
during the year such as ad-supported mode, long-form audio, as well
as audio live streaming and our international expansion, among many
more. Another meaningful accomplishment was the headway we made
with our 'music+public welfare' model, which innovatively combines
music's emotional expression and influence to promote social
progress. With our confidence in the long-term prospects of the
company, we had completed the US$1
billion share buyback program approved by the Board in 2021.
Looking ahead into 2023, as we are repositioning ourselves to
better capture future growth areas, we currently expect our
quarterly revenues from online music services will exceed those
from social entertainment services at some point within this year.
Meanwhile, with our relentless focus on executing our growth
strategies and operating efficiencies, we are confident to achieve
year-over-year growth in total revenues and profitability as well
as continuous improvement in user quality in 2023 while fueling the
thriving music industry."
"On the back of our firm execution of the dual engine
content-and-platform strategy, in 2022 TME launched a lineup of new
tools and leveraged our end-to-end production and promotional
resources to unlock value for our partners' content creation, while
delivering compelling experiences to all those who are passionate
about music as we innovated in each of our four entertainment
pillars: listen, watch, sing, and play," said Mr. Ross Liang, CEO of TME. "With our refined
mission to 'create endless possibilities with music and
technology,' in the fourth quarter, we launched multiple product
upgrades and made pioneering advancements in virtual
idol, sound quality, visual effects, social functions, virtual
entertainment experiences, and more, while comprehensively
extending our cooperation with Weixin Video Accounts in the
Tencent ecosystem to explore new
avenues to distribute music and video content. In addition, we have
been deploying and developing breakthrough AIGC tools, such as
the LyraSinger, Muse and Lingyin Engines, to further empower
music-related content creation and enhance production efficiency.
In the future, we will continue to explore the application of large
language models (LLMs) in the fields of pictures, texts, video and
other content, as well as music recommendation and search, to meet
the massive demand for music-related content. In 2023 and in the
years to come, we will keep driving industry development, blazing
new trails in content and platform innovations, while fulfilling
our responsibilities as a leading music industry player."
Financial Review for the Fourth Quarter of
2022
Total revenues for the fourth quarter of 2022 were RMB7.43 billion (US$1.08
billion) which declined 2.4% year-over-year but increased
quarter-over-quarter by 0.8%. Revenues from online music services
continued its growth trajectory and increased by 23.6%
year-over-year to RMB3.56 billion
(US$516 million). Revenues from
social entertainment services and others decreased by 18.2%
year-over-year to RMB3.87 billion
(US$561 million).
Online Music Services
Revenues from music subscriptions for the fourth quarter of 2022
delivered healthy growth of 20.6% year-over-year and 4.5%
quarter-over-quarter growth to RMB2.35
billion (US$341 million) as we
strengthened our monetization capabilities with improved operating
efficiency. During the fourth quarter, the surge in COVID-19 cases
and churn of our casual users amid competition, along with cost
optimization measures aimed at boosting monetization efficiency as
a platform of scale, led to the year-over-year decline in online
music mobile MAUs. Nevertheless, online music paying users
maintained a strong growth trend of 16.1% year-over-year and
reached 88.5 million. At the same time, ARPPU continued to improve
sequentially for the third consecutive quarter and increased by
4.7% year-over-year to RMB8.9. The
strong paying user and ARPPU momentum was driven by optimized
content quality, more attractive member privileges, broadened sales
channels, and more effective promotions.
Revenues from online music services other than subscriptions for
the fourth quarter of 2022 increased by 29.8% year-over-year and by
2.3% quarter-over-quarter to RMB1.21
billion (US$175 million).
Revenues from advertising continued to recover
quarter-over-quarter. Specifically, ad-supported mode has achieved
strong growth, and leading advertisers, including WU LIANG CHUN, Coca-Cola, KFC and JD.com,
embraced TME Live and TMELAND as innovative channels for
musical-format advertising in the fourth quarter. Additionally, in
the fourth quarter, we worked with a wide range of A-list artists,
including Lu Han, JJ Lin,
Jackson Wang, Wang Yibo,
Roy Wang, Joker Xue and Lay
Zhang[3], to release their physical albums, digital
albums, vinyl records, or customized artist merchandise with
head-start benefits. For long-form audio, its subscribers doubled
year-over-year to surpass 10 million during the fourth quarter,
driving solid year-over-year growth of revenues from long-form
audio subscription.
Social Entertainment Services and Others
Revenues from social entertainment services and others for the
fourth quarter of 2022 decreased by 18.2% year-over-year to
RMB3.87 billion (US$561 million). Social entertainment services
MAUs and paying users declined year-over-year, resulted from the
impact of the evolving macro headwinds, increased competition from
other platforms and the surge in COVID-19 cases in the fourth
quarter of 2022. To adapt to the changing environment, we focused
on increasing our competitiveness through ongoing product
innovation and new initiatives in social entertainment services,
such as audio live streaming, real-time interactive experiences and
international expansion.
Revenues from audio live streaming in the fourth quarter of 2022
increased year-over-year driven by expanding QQ Music Live
Streaming, and Kugou Music's move, following QQ Music, to foster a
tighter connection between its music platform and audio live
streaming. WeSing's multi-person singing rooms in both video and
audio settings have continued to enrich real-time interaction
scenarios on the platform leading to increases in its penetration
rate and user time spent, and we plan to roll out the feature to
other platforms in the future. Meanwhile, we leveraged our
experience in operating singing and social products and mature
monetization models and brought them to the international market,
expanding our presence through both organic growth and M&A.
Revenues from our overseas business continued to increase
year-over-year in the fourth quarter.
Costs, Expenses and Profitability
Cost of revenues for the fourth quarter of 2022 decreased by
8.1% year-over-year to RMB4.98
billion (US$722
million). The decline in revenues from social
entertainment services led to a decrease in revenue sharing fees,
which was the primary reason for the overall decrease in cost of
revenues on a year-over-year basis, and it was partially offset by
the increase in content costs of royalties.
Gross margin for the fourth quarter of 2022 increased by 4.2% to
33.0% from 28.8% in the same period of 2021, primarily due to
our effective control of content costs including decreased revenue
sharing fees for our live streaming business, as well as improved
operational cost efficiency.
Total operating expenses for the fourth quarter of 2022
decreased by 25.1% year-over-year to RMB1.36
billion (US$197 million).
Operating expenses as a percentage of total revenues decreased to
18.3% in the fourth quarter of 2022 from 23.9% in the same period
of 2021.
- Selling and marketing expenses were RMB266 million (US$39
million), representing a year-over-year decrease of 64.5%.
This decrease was primarily due to effective control over marketing
expenses and optimization of the overall promotion structure to
improve operating efficiency. Our selling and marketing expenses
continuously decreased on a year-over-year basis as we reduced the
marketing spending on user acquisition and remained more focused on
driving high-quality paying user growth.
- General and administrative expenses were RMB1.10 billion (US$159
million), representing a year-over-year increase of 2.6%.
The increase was mainly due to increased investment in research and
development to further empower music-related content creation,
enhance production efficiency and improve sound quality and
effects.
Driven by effective cost controls and improved operating
efficiency, our operating profit grew to RMB1.39 billion (US$201
million) in the fourth quarter of 2022, representing an
increase of 103.5% year-over-year.
For the fourth quarter of 2022, net profit attributable to
equity holders of the Company was
RMB1.15 billion (US$167 million), and non-IFRS net profit
attributable to equity holders of the Company was RMB1.44 billion (US$208
million). Please refer to the section in this press release
titled "Non-IFRS Financial Measure" for details.
Basic and diluted earnings per American Depositary Shares
("ADS") were RMB0.73 (US$0.11) and RMB0.72 (US$0.11),
respectively, for the fourth quarter of 2022, and non-IFRS basic
and diluted earnings per ADS were RMB0.92 (US$0.13)
and RMB0.91 (US$0.13), respectively. The Company had weighted
averages of 1.57 billion basic and 1.59 billion diluted ADSs
outstanding, respectively. Each ADS represents two of the Company's
Class A ordinary shares.
Financial Review for the Year of
2022
Total revenues for the full year of 2022 decreased by 9.3%
year-over-year to RMB28.34 billion
(US$4.11 billion).
Online Music Services
Revenues from online music services for the full year of 2022
increased by 8.9% year-over-year to RMB12.48
billion (US$1.81 billion). The
increase was driven by strong growth in music subscription
revenues, supplemented by growth in revenues from long form audio,
despite a decrease in sublicensing revenues and advertising
revenues. Revenues from music subscriptions were RMB8.70 billion (US$1.26
billion), representing an
18.6% year-over-year growth, primarily due to the increase in the
number of paying users by 22.7%, partially offset by a decrease in
ARPPU from RMB8.9 in year 2021 to
RMB8.6 in year 2022 as we had
relatively lower ARPPU in the first half of 2022 due to our
promotional efforts.
Social Entertainment Services and Others
Revenues from social entertainment services and others for the
full year of 2022 decreased by 19.8% year-over-year to RMB15.86 billion (US$2.30
billion). On a year-over-year basis, ARPPU increased by 5.9%
while paying users of social entertainment services decreased by
24.3%. The decrease was mainly due to the impact of the evolving
macro environment, increased competition from other platforms and
the impact related to COVID-19.
Costs, Expenses and Profitability
Cost of revenues for the full year of 2022 decreased by 10.4%
year-over-year to RMB19.57 billion
(US$2.84 billion). The decline in
revenues from social entertainment services led to a decrease in
revenue sharing fees, which was the primary reason for the overall
decrease in cost of revenues on a year-over-year basis.
Gross margin for the full year of 2022 increased by 0.9% to
31.0% from 30.1% in the same period of 2021, primarily due to
our effective control and optimization of content costs including
decreased revenue sharing fees for our live streaming business.
Total operating expenses for the full year of 2022 decreased by
16.9% year-over-year to RMB5.56
billion (US$806 million).
Operating expenses as a percentage of total revenues decreased to
19.6% for the full year of 2022 from 21.4% in 2021. After excluding
the impact of the expenses related to our secondary listing,
operating expenses as a percentage of total revenues would have
decreased by 2.1% year-over-year.
- Selling and marketing expenses were RMB1.14 billion (US$166
million), representing a decrease of 57.3% year-over-year.
This decrease was primarily due to effective control over marketing
expenses and optimization of the overall promotion structure for
marketing spending on user acquisition and we remained more focused
on driving high-quality paying user growth in 2022.
- General and administrative expenses were RMB4.41 billion (US$640
million), representing an increase of 10.1% year-over-year.
After excluding the impact from the expenses related to our
secondary listing, general and administrative expenses would have
increased by 8.0% year-over-year. The increase was mainly due to
increased investment in research and development to further empower
music-related content creation, enhance production efficiency and
improve sound quality and effects, as well as to support our
international expansion.
Driven by effective cost controls and improved operating
efficiency, our operating profit grew to RMB4.44 billion (US$644
million) for the full year of 2022, representing an increase
of 16.9% year-over-year.
For the full year of 2022, net profit attributable to equity
holders of the Company was RMB3.68
billion (US$533 million), and
non-IFRS net profit attributable to equity holders of the Company
was RMB4.75 billion (US$688 million). Please refer to the section in
this press release titled "Non-IFRS Financial Measure" for
details.
Basic and diluted earnings per ADS were RMB2.30 (US$0.33)
and RMB2.27 (US$0.33), respectively, for the full year of
2022, and non-IFRS basic and diluted earnings per ADS were
RMB2.96 (US$0.43) and RMB2.93 (US$0.43),
respectively. The Company had weighted averages of 1.60 billion
basic and 1.62 billion diluted ADSs outstanding, respectively.
Other Key Financial Information
As of December 31, 2022, the
combined balance of the Company's cash, cash equivalents, term
deposits and short-term investments amounted to RMB27.4 billion (US$3.97
billion), compared to RMB25.4
billion as of September 30,
2022. The increase was primarily driven by cash flows
generated from operations.
Operating Metrics
- TME's online music and social entertainment services key
operating metrics[2]
|
4Q22
|
4Q21
|
YoY %
|
Mobile MAU - online
music (million)
|
567
|
615
|
(7.8 %)
|
Mobile MAU - social
entertainment (million)
|
146
|
175
|
(16.6 %)
|
Paying users - online
music (million)
|
88.5
|
76.2
|
16.1 %
|
Paying users - social
entertainment (million)
|
7.6
|
9.0
|
(15.6 %)
|
Monthly ARPPU - online
music (RMB)
|
8.9
|
8.5
|
4.7 %
|
Monthly ARPPU - social
entertainment (RMB)
|
169.6
|
175.1
|
(3.1 %)
|
Business Review
Collaborated with top artists, labels and industry
partners to benefit users and artists:
- Reached an agreement with JVR to extend our close strategic
partnership, and will continue to provide our users with the
high-quality music created by JVR, accentuated by the extraordinary
experience on our platform. Deepened our strategic cooperation with
leading records such as B'in Music in the fourth quarter, providing
users with songs from Mayday and other renowned singers.
- Began teaming up with Billboard extensively and announced the
integration of TME UNI Chart on Billboard as its only music chart
from mainland China. Jointly
released the 2022 Annual Music Report, which attracted
participation from a record-high number of unique visitors. What's
more, coached and supported musicians such as Pan Yunqi to grow
quickly into rising stars by collaborating with Coca-Cola's music
event and promoting her via Billboard's global network. She also
came in third place in 2022 SING! China and was featured on the cover of
Billboard's December issue.
- Supported the strategic musician partner we cultivated,
Krystal Chen, by inviting well-known
producers to launch her first extended play, from which the song
"Skylight" topped QQ Music's Best New Release music chart.
Empowered original content production leveraging new tools
and end-to-end resources and services:
- Brought to life TME's first hyper-real virtual pop idol, Lucy,
along with our other virtual performers Xiaoqin, Shanbao and Anko
with original content, unique voices and dance moves. With a
record-grade, automatically generated vocal print developed by TME
LYRA LAB's LyraSinger Engine, Lucy has received partnership
interest for joint performances from a broad array of global
brands.
- Our Tencent Musician Platform has
empowered our indie musicians to create more than 2.3 million
musical works by the fourth quarter. Meanwhile, we constantly pay
close attention to music ecosystem development, and launched more
features and smart tools for indie musicians to accelerate song
composition and release while earning revenues from listeners who
want to show extra gratitude in addition to album sale.
- Created close to 1,000 original blockbusters throughout the
year, leading to streams exceeding 100 million each in 2022. In the
fourth quarter, the hit song "Grant Me" dominated major music
charts and took the market by storm, with nearly half a billion
streams. Another hit was "Turn into Fireworks and Fall for You,"
which has been extensively used as background music and generated
over five billion social media discussions.
- Deepened collaboration with the Tencent ecosystem and launched a total of 111
songs in the gaming and animation category in 2022. Notably,
"Fairytale Love" made for Peacekeeper Elite, was among the
finalists for the Best Original Song in the Mobile Video Game
category of the 13th Hollywood Music in Media Awards.
Strengthened product features to provide all-round musical
companionship to our users:
- We have been deploying and developing breakthrough AIGC tools
to further empower music-related content creation and enhance
production efficiency. For example, we rolled out the Muse Engine,
which enables automated large-scale music poster production based
on melody and lyrics. Expanded use cases for our patented
technology, Lingyin Engine, to produce long-form audio content read
by synthetic voices. Receivers of QQ Music's newly launched VR
greeting card can walk into the gift generated automatically, and
receive blessings as avatars in an exquisite virtual space.
- Holistically improved sound quality and sound effects to bring
more vivid listening experiences via new launches such as the
Premium Sound series. Empowered users to flexibly customize their
listening experience through options such as the pitch and tempo
alteration feature. Recommendation streaming volume and time spent
per user produced sustained growth in the fourth quarter.
- Comprehensively expanded collaboration with Weixin Video
Accounts to enrich users' visual experience and explore new avenues
to distribute music and video content. TME Live deepened
cooperation with Weixin Video Accounts to allow a broader user base
to participate in concerts, both paid and free, and engage with
innovative online-merge-offline interactions at fourth quarter
performances from Ryuichi Sakamoto,
Andy Lau and Hacken
Lee[3], among others. Applied song recognition feature
to automatically identify the background music of videos from
Weixin Video Accounts and direct users to QQ Music to listen, set
their Weixin ringtone, or use in their own videos.
Social Responsibilities
Fulfilling social responsibilities remains one of our
priorities. In the fourth quarter, we launched "The Spirit of
Chinese Song: Guangxi Style" and
partnered with singers Fox Hu and XIN Liu (Yuxin Liu)[3] to promote Chinese
traditional culture through the power of digital music. In
December 2022, many of the musical
works from "The Spirit of Chinese Song 2020," a public welfare
album we released previously, officially entered the first digital
collection of National Archives of Publications and Culture,
supporting the preservation and inheritance of Chinese culture.
Share Repurchase Program
As of December 31, 2022, we had
completed the US$1 billion 2021 Share
Repurchase Program announced on March 28,
2021. In addition, to underscore our confidence in TME's
future development and growth prospects, our board of directors has
recently authorized a new Share Repurchase Program under which the
Company may repurchase up to $500
million of its Class A ordinary shares during a 24-month
period commencing from March
2023.
Exchange Rate
This announcement contains translations of certain RMB amounts
into U.S. dollars ("USD") at specified rates solely for the
convenience of the reader. Unless otherwise stated, all
translations from RMB to USD were made at the rate of RMB6.8972 to US$1.00, the noon buying rate in effect on
December 30, 2022, in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or USD amounts referred could be
converted into USD or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
Non-IFRS Financial Measure
The Company uses non-IFRS net profit for the period, which is a
non-IFRS financial measure, in evaluating its operating results and
for financial and operational decision-making purposes. TME
believes that non-IFRS net profit helps identify underlying trends
in the Company's business that could otherwise be distorted by the
effect of certain expenses that the Company includes in its profit
for the period. TME believes that non-IFRS net profit for the
period provides useful information about its results of operations,
enhances the overall understanding of its past performance and
future prospects and allows for greater visibility with respect to
key metrics used by its management in its financial and operational
decision-making.
Non-IFRS net profit for the period should not be considered in
isolation or construed as an alternative to operating profit, net
profit for the period or any other measure of performance or as an
indicator of its operating performance. Investors are encouraged to
review non-IFRS net profit for the period and the reconciliation to
its most directly comparable IFRS measure. Non-IFRS net profit for
the period presented here may not be comparable to similarly titled
measures presented by other companies. Other companies may
calculate similarly titled measures differently, limiting their
usefulness as comparative measures to the Company's data. TME
encourages investors and others to review its financial information
in its entirety and not rely on a single financial measure.
Non-IFRS net profit for the period represents profit for the
period excluding amortization of intangible and other assets
arising from acquisitions, share-based compensation expenses, net
losses/gains from investments and income tax effects.
Please see the "Unaudited Non-IFRS Financial Measure" included
in this press release for a full reconciliation of non-IFRS net
profit for the period to its net profit for the period.
[1] Non-IFRS net profit
and non-IFRS net profit attributable to equity holders of the
Company were arrived at after excluding the combined effect of
amortization of intangible assets and other assets arising from
acquisitions, share-based compensation expenses, net losses/gains
from investments, and income tax effects.
[2] For the definitions of the cited key operating metrics, please
refer to the introduction section in the Company's 2021 20-F filed
on April 26, 2022. The monthly ARPPU of social entertainment
services is calculated based on revenues from social entertainment
and others, including advertising services provided on our social
entertainment platforms. Online music mobile MAUs for a given month
refers to the sum of mobile MAUs of our music products, including
QQ Music, Kugou Music and Kuwo Music, for that month; duplicate
access to different services by the same device is not eliminated
from the calculation.
[3] Sorted by Chinese surname.
|
About Tencent Music
Entertainment
Tencent Music Entertainment Group
(NYSE: TME and HKEX: 1698) is the leading online music and audio
entertainment platform in China,
operating the country's highly popular and innovative music apps:
QQ Music, Kugou Music, Kuwo Music and WeSing. TME's mission is to
create endless possibilities with music and technology. TME's
platform comprises online music, online audio, online karaoke,
music-centric live streaming and online concert services, enabling
music fans to discover, listen, sing, watch, perform and socialize
around music. For more information, please visit
ir.tencentmusic.com.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Statements that
are not historical facts, including statements about the Company's
beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and
uncertainties, and a number of factors could cause actual results
to differ materially from those contained in any forward-looking
statement. In some cases, forward-looking statements can be
identified by words or phrases such as "may," "will," "expect,"
"anticipate," "target," "aim," "estimate," "intend," "plan,"
"believe," "potential," "continue," "is/are likely to" or other
similar expressions. Further information regarding these and other
risks, uncertainties or factors is included in the Company's
filings with the SEC and the HKEX. All information provided in this
press release is as of the date of this press release, and the
Company does not undertake any duty to update such information,
except as required under applicable law.
Investor Relations Contact
Tencent Music Entertainment
Group
ir@tencentmusic.com
+86 (755) 8601-3388 ext. 818415
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED INCOME
STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Year ended December
31
|
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
(in millions, except
per share data)
|
|
(in millions, except
per share data)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online music
services
|
|
|
2,880
|
|
3,559
|
|
516
|
|
11,467
|
|
12,483
|
|
1,810
|
Social entertainment
services and others
|
|
|
4,727
|
|
3,866
|
|
561
|
|
19,777
|
|
15,856
|
|
2,299
|
|
|
|
7,607
|
|
7,425
|
|
1,077
|
|
31,244
|
|
28,339
|
|
4,109
|
Cost of
revenues
|
|
|
(5,415)
|
|
(4,978)
|
|
(722)
|
|
(21,840)
|
|
(19,566)
|
|
(2,837)
|
Gross
profit
|
|
|
2,192
|
|
2,447
|
|
355
|
|
9,404
|
|
8,773
|
|
1,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
(750)
|
|
(266)
|
|
(39)
|
|
(2,678)
|
|
(1,144)
|
|
(166)
|
General and
administrative expenses
|
|
|
(1,067)
|
|
(1,095)
|
|
(159)
|
|
(4,009)
|
|
(4,413)
|
|
(640)
|
Total operating
expenses
|
|
|
(1,817)
|
|
(1,361)
|
|
(197)
|
|
(6,687)
|
|
(5,557)
|
|
(806)
|
Interest
income
|
|
|
122
|
|
224
|
|
32
|
|
530
|
|
711
|
|
103
|
Other gains,
net
|
|
|
185
|
|
78
|
|
11
|
|
553
|
|
516
|
|
75
|
Operating
profit
|
|
|
682
|
|
1,388
|
|
201
|
|
3,800
|
|
4,443
|
|
644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of net
profit/(loss) of investments
accounted for using
equity method
|
|
|
1
|
|
16
|
|
2
|
|
(47)
|
|
38
|
|
6
|
Finance cost
|
|
|
(31)
|
|
(31)
|
|
(4)
|
|
(121)
|
|
(108)
|
|
(16)
|
Profit before income
tax
|
|
|
652
|
|
1,373
|
|
199
|
|
3,632
|
|
4,373
|
|
634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
(75)
|
|
(168)
|
|
(24)
|
|
(417)
|
|
(534)
|
|
(77)
|
Profit for the
period/year
|
|
|
577
|
|
1,205
|
|
175
|
|
3,215
|
|
3,839
|
|
557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
536
|
|
1,151
|
|
167
|
|
3,029
|
|
3,677
|
|
533
|
Non-controlling
interests
|
|
|
41
|
|
54
|
|
8
|
|
186
|
|
162
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class
B ordinary
shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.16
|
|
0.37
|
|
0.05
|
|
0.91
|
|
1.15
|
|
0.17
|
Diluted
|
|
|
0.16
|
|
0.36
|
|
0.05
|
|
0.90
|
|
1.14
|
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS (2
Class A shares
equal to 1
ADS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.33
|
|
0.73
|
|
0.11
|
|
1.82
|
|
2.30
|
|
0.33
|
Diluted
|
|
|
0.32
|
|
0.72
|
|
0.11
|
|
1.80
|
|
2.27
|
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings per Class A and
Class B ordinary
share computation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,284,580,063
|
|
3,142,973,505
|
|
3,142,973,505
|
|
3,321,067,177
|
|
3,203,995,973
|
|
3,203,995,973
|
Diluted
|
|
|
3,308,612,118
|
|
3,175,415,350
|
|
3,175,415,350
|
|
3,363,045,757
|
|
3,234,507,356
|
|
3,234,507,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in earnings
per ADS
computation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,642,290,032
|
|
1,571,486,752
|
|
1,571,486,752
|
|
1,660,533,589
|
|
1,601,997,986
|
|
1,601,997,986
|
Diluted
|
|
|
1,654,306,059
|
|
1,587,707,675
|
|
1,587,707,675
|
|
1,681,522,878
|
|
1,617,253,678
|
|
1,617,253,678
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
UNAUDITED NON-IFRS
FINANCIAL MEASURE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Year ended December
31
|
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
|
|
(in millions, except
per share data)
|
|
(in millions, except
per share data)
|
Profit for the
period/year
|
|
|
577
|
|
1,205
|
|
175
|
|
3,215
|
|
3,839
|
|
557
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible and other assets arising
from
acquisitions*
|
|
|
127
|
|
126
|
|
18
|
|
484
|
|
498
|
|
72
|
Share-based
compensation
|
|
|
202
|
|
178
|
|
26
|
|
753
|
|
834
|
|
121
|
Losses/(Gains) from
investments**
|
|
|
35
|
|
-
|
|
-
|
|
51
|
|
(141)
|
|
(20)
|
Income tax
effects***
|
|
|
(68)
|
|
(17)
|
|
(2)
|
|
(171)
|
|
(123)
|
|
(18)
|
Non-IFRS Net
Profit
|
|
|
873
|
|
1,492
|
|
216
|
|
4,332
|
|
4,907
|
|
711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
|
832
|
|
1,438
|
|
208
|
|
4,146
|
|
4,745
|
|
688
|
Non-controlling
interests
|
|
|
41
|
|
54
|
|
8
|
|
186
|
|
162
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class B
ordinary
shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.25
|
|
0.46
|
|
0.07
|
|
1.25
|
|
1.48
|
|
0.21
|
Diluted
|
|
|
0.25
|
|
0.45
|
|
0.07
|
|
1.23
|
|
1.47
|
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS (2
Class A shares equal to 1
ADS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.51
|
|
0.92
|
|
0.13
|
|
2.50
|
|
2.96
|
|
0.43
|
Diluted
|
|
|
0.50
|
|
0.91
|
|
0.13
|
|
2.47
|
|
2.93
|
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings per Class A and
Class B ordinary
share computation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
3,284,580,063
|
|
3,142,973,505
|
|
3,142,973,505
|
|
3,321,067,177
|
|
3,203,995,973
|
|
3,203,995,973
|
Diluted
|
|
|
3,308,612,118
|
|
3,175,415,350
|
|
3,175,415,350
|
|
3,363,045,757
|
|
3,234,507,356
|
|
3,234,507,356
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in earnings
per ADS computation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,642,290,032
|
|
1,571,486,752
|
|
1,571,486,752
|
|
1,660,533,589
|
|
1,601,997,986
|
|
1,601,997,986
|
Diluted
|
|
|
1,654,306,059
|
|
1,587,707,675
|
|
1,587,707,675
|
|
1,681,522,878
|
|
1,617,253,678
|
|
1,617,253,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Represents the
amortization of identifiable assets, including intangible assets
and prepayments for music content, resulting from
acquisitions
|
** Including the net
losses/gains on deemed disposals/disposals of investments, fair
value changes arising from investments, impairment provision of
investments and other expenses in relation to equity transactions of
investments
|
*** Represents the
income tax effects of Non-IFRS adjustments
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED BALANCE
SHEET
|
|
|
|
|
|
|
|
|
|
As at December 31,
2021
|
|
As at December 31,
2022
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
(in
millions)
|
ASSETS
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
243
|
|
323
|
|
47
|
Land use
rights
|
|
1,495
|
|
2,480
|
|
360
|
Right-of-use
assets
|
|
283
|
|
398
|
|
58
|
Intangible
assets
|
|
2,829
|
|
2,368
|
|
343
|
Goodwill
|
|
19,121
|
|
19,493
|
|
2,826
|
Investments accounted
for using equity method
|
|
3,599
|
|
4,330
|
|
628
|
Financial assets at
fair value through other comprehensive income
|
7,302
|
|
3,168
|
|
459
|
Other
investments
|
|
199
|
|
304
|
|
44
|
Prepayments, deposits
and other assets
|
|
743
|
|
709
|
|
103
|
Deferred tax
assets
|
|
346
|
|
347
|
|
50
|
Term
deposits
|
|
4,303
|
|
6,530
|
|
947
|
|
|
40,463
|
|
40,450
|
|
5,865
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Inventories
|
|
24
|
|
14
|
|
2
|
Accounts
receivable
|
|
3,610
|
|
2,670
|
|
387
|
Prepayments, deposits
and other assets
|
|
2,731
|
|
2,958
|
|
429
|
Other
investments
|
|
37
|
|
37
|
|
5
|
Short-term
investments
|
|
1,029
|
|
-
|
|
-
|
Term
deposits
|
|
12,769
|
|
11,291
|
|
1,637
|
Restricted
cash
|
|
-
|
|
34
|
|
5
|
Cash and cash
equivalents
|
|
6,591
|
|
9,555
|
|
1,385
|
|
|
26,791
|
|
26,559
|
|
3,851
|
|
|
|
|
|
|
|
Total
assets
|
|
67,254
|
|
67,009
|
|
9,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Equity attributable
to equity holders of the
Company
|
|
|
|
|
|
|
Share
capital
|
|
2
|
|
2
|
|
0
|
Additional paid-in
capital
|
|
36,238
|
|
36,456
|
|
5,286
|
Shares held for share
award schemes
|
|
(183)
|
|
(202)
|
|
(29)
|
Treasury
shares
|
|
(3,660)
|
|
(6,349)
|
|
(921)
|
Other
reserves
|
|
3,726
|
|
6,140
|
|
890
|
Retained
earnings
|
|
14,194
|
|
12,052
|
|
1,747
|
|
|
50,317
|
|
48,099
|
|
6,974
|
Non-controlling
interests
|
|
738
|
|
1,028
|
|
149
|
|
|
|
|
|
|
|
Total
equity
|
|
51,055
|
|
49,127
|
|
7,123
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Notes
payables
|
|
5,062
|
|
5,536
|
|
803
|
Accounts
payable
|
|
93
|
|
-
|
|
-
|
Other payables and
other liabilities
|
|
32
|
|
6
|
|
1
|
Deferred tax
liabilities
|
|
271
|
|
211
|
|
31
|
Lease
liabilities
|
|
205
|
|
306
|
|
44
|
Deferred
revenue
|
|
86
|
|
106
|
|
15
|
|
|
5,749
|
|
6,165
|
|
894
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
4,329
|
|
4,998
|
|
725
|
Other payables and
other liabilities
|
|
3,832
|
|
4,022
|
|
583
|
Current tax
liabilities
|
|
363
|
|
404
|
|
59
|
Lease
liabilities
|
|
92
|
|
123
|
|
18
|
Deferred
revenue
|
|
1,834
|
|
2,170
|
|
315
|
|
|
10,450
|
|
11,717
|
|
1,699
|
|
|
|
|
|
|
|
Total
liabilities
|
|
16,199
|
|
17,882
|
|
2,593
|
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
67,254
|
|
67,009
|
|
9,715
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31
|
|
Year Ended December
31
|
|
|
2021
|
|
2022
|
|
2021
|
|
2022
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
(in
millions)
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
822
|
|
2,494
|
|
362
|
|
5,239
|
|
7,481
|
|
1,085
|
Net cash provided
by/(used in) investing activities
|
|
996
|
|
(1,108)
|
|
(161)
|
|
(5,999)
|
|
(1,446)
|
|
(210)
|
Net cash used in
financing activities
|
|
(286)
|
|
(383)
|
|
(56)
|
|
(3,710)
|
|
(3,419)
|
|
(496)
|
Net increase/(decrease)
in cash and cash equivalents
|
|
1,532
|
|
1,003
|
|
145
|
|
(4,470)
|
|
2,616
|
|
379
|
Cash and cash
equivalents at beginning of the period/year
|
|
5,078
|
|
8,582
|
|
1,244
|
|
11,128
|
|
6,591
|
|
956
|
Exchange differences on
cash and cash equivalents
|
|
(19)
|
|
(30)
|
|
(4)
|
|
(67)
|
|
348
|
|
50
|
Cash and cash
equivalents at end of the period/year
|
|
6,591
|
|
9,555
|
|
1,385
|
|
6,591
|
|
9,555
|
|
1,385
|
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content:https://www.prnewswire.com/news-releases/tencent-music-entertainment-group-announces-fourth-quarter-and-full-year-2022-unaudited-financial-results-301776943.html
SOURCE Tencent Music Entertainment
Group