SHENZHEN, China, March 22, 2021 /PRNewswire/ -- Tencent Music Entertainment Group ("Tencent Music," "TME," or the "Company") (NYSE:
TME), the leading online music entertainment platform in
China, today announced its
unaudited financial results for the fourth quarter and full year
ended December 31, 2020.
Financial and Operational Highlights
In the three months ended December 31,
2020:
- Online music paying users reached 56.0 million,
increasing by 40.4% year-over-year. On a sequential basis, the
number of online music paying users grew by 4.3 million. Paying
ratio was 9.0%, up from 8.0% in the third quarter of this year and
6.2% in the fourth quarter of last year.
- Total revenues were RMB8.34
billion (US$1.28 billion),
representing an increase of 14.3% year-over-year.
- Online music service revenues grew by 29.0%
year-over-year, up from 25.9% in the third quarter of 2020.
Revenues from music subscriptions were RMB1.58 billion (US$242
million), representing 41.9% year-over-year growth.
Advertising services recorded over 100% year-over-year growth in
the fourth quarter of 2020.
- Net profit attributable to equity holders of the Company
was RMB1.20 billion (US$183 million).
- Non-IFRS net profit attributable to equity holders of the
Company[1] was RMB1.35 billion (US$207
million).
In the full year ended December 31,
2020:
- Total revenues increased by 14.6% year-over-year to
RMB29.15 billion (US$4.47 billion).
- Net profit attributable to equity holders of the Company
increased by 4.3% year-over-year to RMB4.16
billion (US$637 million).
- Non-IFRS net profit attributable to equity holders of the
Company[1] increased by 0.9% year-over-year to
RMB4.95 billion (US$759 million).
[1] Non-IFRS net
profit attributable to equity holders of the Company was 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, fair
value change on puttable shares and income tax effects.
|
"In 2020, we demonstrated resilience and agility during and
after the COVID-19 pandemic. We forged ahead with our operations,
invested in technologies to customize services and introduced new
products to meet the evolving demands of our users. Our fourth
quarter results were underpinned by strong performance in online
music services, which registered outstanding year-over-year revenue
growth of 42% from subscriptions and over 100% from advertising.
Even against the backdrop of macro-economic uncertainty and a
changing competitive environment, our social entertainment services
delivered steady revenue growth alongside moderation in margins as
we proactively invested some profit to pave the way for future
growth," said Mr. Cussion Pang, Chief Executive Officer of
Tencent Music. "By investing in
various musical genres across multiple formats and enriching
long-form audio content, we have further strengthened our content
leadership and improved user engagement, reflected in the
sequential increase in total user time spent on our platform. Our
initial investment in long-form audio started to pay off with 15%
long-form audio penetration of our user base in the fourth quarter
of 2020, up from 6% for the same period last year."
"We have already started 2021 with exciting accomplishments,
including expanding our online music and audio entertainment
ecosystem, deepening user engagement and further diversifying our
business model. Motivated by our fundamental dedication to
continually improve the user experience, we are confident to be on
the cusp of new opportunities and sustainable growth for many years
to come," concluded Mr. Pang.
Recent Operational Highlights
- TME's online music and social entertainment services key
operating metrics*
|
4Q20
|
4Q19
|
YoY %
|
Mobile MAU - online
music (million)
|
622
|
644
|
(3.4%)
|
Mobile MAU - social
entertainment (million)
|
223
|
233
|
(4.3%)
|
Paying users - online
music (million)
|
56.0
|
39.9
|
40.4%
|
Paying users - social
entertainment (million)
|
10.8
|
12.6
|
(14.3%)
|
Monthly ARPPU -
online music (RMB)
|
9.4
|
9.3
|
1.1%
|
Monthly ARPPU -
social entertainment (RMB)
|
172.1
|
136.3
|
26.3%
|
We achieved solid progress across full business spectrum in
2020, in terms of scale, industry leadership, content
diversification and enrichment, monetization, and innovation,
solidifying our position as a leading all-in-one music and audio
entertainment platform in China,
and building a strong foundation for our music content
ecosystem:
- On the music content front, we strived for comprehensive
coverage through category expansion and deepening penetration,
inspired to better serve the evolving needs of our diverse
users:
- We made significant progress in trend-setting genres during the
fourth quarter through: a) increasing new hit content coverage
substantially, driven by our proprietary trend prediction
algorithms and expanding promotional capabilities; b) comprehensive
partnerships with leading rap music labels such as GOSH and 404
Rapper; c) notable breakthroughs in promoting hip-hop and Chinese
ancient style music, latter of which was streamed over 100 billion
times in 2020.
- Tencent Musician Platform continued
to expand rapidly: a) the number of participating indie musicians
continued to grow over 100% year-over-year in the fourth quarter;
b) the number of exclusive indie musicians increased by 13 times in
the fourth quarter, compared to the same period a year ago; c) the
number of original songs uploaded doubled year-over-year, reaching
over 1 million by the end of 2020; d) as of the end of 2020,
efforts to promote diversity and gender equality resulted in nearly
40% of total artists on our Tencent
Musician Platform being female, compared with industry average of
around 20% in China.
- In January 2021, the Tencent-led consortium in which we have approximately 10% equity interest increased
total equity stake in Universal Music Group ("UMG") to 20%,
following the multi-year extension of our licensing agreement with
UMG in 2020.
- In March 2021, we extended our
multi-year strategic licensing agreement with Warner Recorded Music
("WRM") upon its future expiration. As part of the extension, we
also agreed to establish a new joint venture record label in
China as well as expand the
partnership to a wider range, including the usage of WRM's content
across all our music and entertainment platforms, as well as
developing new opportunities in music-for-business solutions and
connected devices.
- Positioning music as a home ground, we upgraded our products to
be more social, personalized and visually appealing to improve user
experience in the fourth quarter:
- Putong Community achieved a steady sequential increase in user
penetration and user retention. Fans Club, Kugou Music's new
community channel, recorded a 15% sequential increase
in total user time spent. Of
note, almost half of combined users of Putong Community and Fans
Club are in their teens and mid 20's.
- Our pioneering embedded MVs in Kugou Music streaming page
experienced over 70% sequential increase in users, driving a
rapidly increasing daily total time spent on MVs.
- Personalized recommendation streams as a proportion of total
streams increased sequentially.
- Extending our business boundaries, we vigorously developed
long-form audio through a two-pronged approach by integrating
with our music applications as well
as launching a standalone application, and achieved significant
milestones. During the fourth quarter:
- We significantly enriched long-form audio content offering with
the number of licensed titles increased by 370% year-over-year.
- MAU penetration increased to 14.8%, from 5.5% for the same period
last year, together with a
sequential uplift in average daily user time spent on
long-form audio.
- In January 2021, we entered into a
definitive agreement to acquire 100% equity interest of Shenzhen
Lanren Online Technology Co, Ltd ("Lazy Audio" or "Lanren
tingshu"), to significantly enrich our audio content offering and
boost our production of audiobooks.
- While our online music MAUs slightly
declined, core users on our platform are increasingly engaged and
we saw a year-over-year increase in average daily user time spent
on our platform during the fourth quarter. This is a result of our
concerted efforts to enrich music and audio content offering as
well as launches of innovative product features and services for
Putong Community and TME Live.
- Apart from being a pioneer of digital albums in China, we continue to transform and innovate a
fan-based economy to include music chart operations and recently
successfully rolled out online concerts with virtual fan-idol
gatherings. In the fourth quarter, we released various digital
albums, including:
- "π-volume.4" by LUHAN, a well-known trend-setting male
singer;
- "THE ALBUM" by BLACKPINK, a top Asian female band;
- "In My Thoughts" by Zhang Yunlei, an up-and-coming artist who is
a singer and a Chinese comedian; and,
- three digital releases by JJ Lin, including his fourteenth album,
"Drifter • Like You Do", which topped multiple music charts on the
first day of its release.
- Centering on singing, we added more playful elements to online
singing rooms and multi-genre remix and auto-tune tools which have
further bolstered the social and entertainment aspects of WeSing,
and contributed to stabilization of MAUs and improvement on user
engagement and monetization efficiency.
- Tapping into the prevailing trend of accelerated internet
penetration, we built an innovative online-merge-offline
performance ecosystem to pursue additional growth. TME Live has
been growing from strength to strength and its audience and
influence has continued to expand. Leveraging its influence, we
expect to expand TME Live's coverage beyond top artists and provide
performance opportunities to foster a wider range of musicians:
- Hosted more than 50 online live concerts since its launch with 25
in the fourth quarter for musicians from home and abroad including
aMei, Mayday, Stefanie Sun, Billie
Eilish and Tomorrowland.
- Benefiting from increasing brand awareness, TME Live continued to
attract sponsorships from reputable brands, paving the way for
further monetization opportunities.
- We strived to establish a fair and most credible content
evaluation system for China's
music industry which in turn enhanced our promotional capabilities
as well as industry influence. Our Uni
Chart was awarded the most influential digital music chart
of 2020 by Tech Innovators Conference organized by PingWest, a
service provider and a voice for the global technology
community.
[*] For the
definitions of the cited key operating metrics, please refer to the
introduction section in the Company's 2019 20-F filed on March 25,
2020. 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.
|
Fourth Quarter 2020 Financial Results
Revenues
Total revenues for the fourth quarter of 2020 increased by
RMB1.04 billion, or 14.3%, to
RMB8.34 billion (US$1.28 billion) from RMB7.29 billion in the same period of 2019.
- Revenues from online music services for the fourth quarter of
2020 increased by 29.0% to RMB2.76
billion (US$423 million) from
RMB2.14 billion in the same period of
2019. The increase was driven by strong growth in music
subscription revenues and advertising revenues, despite a decrease
in sublicensing revenues. Revenues from music subscriptions were
RMB1.58 billion (US$242 million), representing 41.9% growth
compared to RMB1.11 billion in the
fourth quarter of 2019, primarily due to the increase in the number
of paying users by 40.4%.
- Revenues from social entertainment services and others for the
fourth quarter of 2020 increased by 8.2% to RMB5.58 billion (US$854
million) from RMB5.15 billion
in the same period of 2019. The increase was driven by increased
revenues from online karaoke services. On a year-over-year basis,
ARPPU increased by 26.3% in the fourth quarter of 2020 while paying
users of social entertainment services decreased by 14.3%.
Cost of Revenues
Cost of revenues for the fourth quarter of 2020 increased by
17.3% to RMB5.64 billion
(US$864 million) from RMB4.81 billion in the same period of 2019,
primarily due to increased investments in new products and content
offering, as well as increased
revenue sharing fees.
Gross Profit and Gross Margin
Gross profit for the fourth quarter of 2020 increased by 8.4% to
RMB2.70 billion (US413 million) from
RMB2.49 billion in the same period of
2019. Gross margin for the fourth quarter of 2020 decreased by 1.7%
to 32.4% from 34.1% in the same period of 2019. This decrease was
primarily due to increased investments in new product and
content offering such as long-form audio, and TME Live, as well as
increased revenue sharing fees to strengthen our platform's
competitiveness.
Operating Expenses for the Period
Total operating expenses for the fourth quarter of 2020
increased by 18.4% to RMB1.68 billion
(US$257 million) from RMB1.42 billion in the same period of 2019.
Operating expenses as a percentage of total revenues increased to
20.1% in the fourth quarter of 2020 from 19.4% in the same period
of 2019.
- Selling and marketing expenses were RMB773 million (US$118
million), representing 9.3% of total revenues in the fourth
quarter of 2020, as compared to 9.2% in the same period of 2019.
This increase was primarily due to increased spending to promote
our brands, products and new offering.
- General and administrative expenses were RMB906 million (US$139
million), representing 10.9% of total revenues in the fourth
quarter of 2020, as compared to 10.2% in the same period of 2019.
The increase was mainly due to our increased investment in research
and development to expand our competitive advantages in product and
technology innovations.
Operating Profit for the Period
Operating profit was RMB1.30
billion (US$199 million) in
the fourth quarter of 2020, compared to operating profit of
RMB1.20 billion in the same period of
2019.
Income Tax Expenses
Effective tax rate for the fourth quarter of 2020 was 5.5%,
compared to 12.4% in the same period of 2019, as some of our
entities became qualified for certain tax benefits and the
cumulative impact was recorded this quarter.
Net Profit and Non-IFRS Net Profit for the Period
Net profit attributable to equity holders of the Company for the
fourth quarter of 2020 was RMB1.20
billion (US$183 million),
compared to net profit of RMB1.04
billion in the same period of 2019. Non-IFRS net profit
attributable to equity holders of the Company was RMB1.35 billion (US$207
million) for the fourth quarter of 2020, compared to
RMB1.34 billion in the same period of
2019. Please refer to the section in this press release titled
"Non-IFRS Financial Measure" for details.
Earnings per ADS
Basic and diluted earnings per American Depositary Shares
("ADS") were RMB0.72 (US$0.11) and RMB0.71(US$0.11),
respectively, for the fourth quarter of 2020. Excluding
amortization of intangible assets and other assets arising from
acquisitions, share-based compensation expenses, net losses/gains
from investments, fair value change on puttable shares and income
tax effects, non-IFRS basic and diluted earnings per ADS were
RMB0.81 (US$0.12) and RMB0.80 (US$0.12),
respectively, for the fourth quarter of 2020. During the fourth
quarter of 2020, the Company had weighted averages of 1.66 billion
basic and 1.68 billion diluted ADSs outstanding, respectively. Each
ADS represents two of the Company's Class A ordinary shares.
Cash Flows
Net cash provided by operating activities for the fourth quarter
of 2020 was RMB1.86 billion
(US$286 million), compared to
RMB2.03 billion in cash provided by
operating activities during the same period of 2019. This decrease
was primarily due to higher content royalty payments during the
fourth quarter this year. Net cash used in investing activities for
the fourth quarter of 2020 was RMB143
million (US$22 million),
compared to net cash used in investing activities of
RMB6.57 billion during the same
period of 2019. The fluctuation of cash flows from investing
activities was primarily due to the purchase and maturity of term
deposits. Net cash provided by financing activities for the fourth
quarter of 2020 was RMB19 million
(US$3 million), compared to
RMB73 million of cash used in
financing activities during the same period of 2019. The
fluctuation of cash flows from financing activities was impacted by
the purchase of minority interests from a subsidiary in 2019.
Cash, Cash Equivalents and Term Deposits
As of December 31, 2020, the
combined balance of the Company's cash, cash equivalents and term
deposits amounted to RMB28.94 billion
(US$4.44 billion), compared to
RMB27.73 billion as of September 30, 2020. The increase in cash, cash
equivalents and term deposits was primarily due to cash flows
generated from operations of RMB1.86
billion (US$286 million), and
partially offset by cash used in investing activities. Such
combined balance was also affected by the change in the
exchange rate of RMB to USD at different balance sheet dates. The
exchange rate was 6.5250 to 1 on December
31, 2020.
Full Year 2020 Financial Results
Revenues
Total revenues for the full year of 2020 increased by
RMB3.72 billion, or 14.6%, to
RMB29.15 billion (US$4.47 billion) from RMB25.43 billion in the same period of 2019.
- Revenues from online music services for the full year of 2020
increased by 30.7% to RMB9.35 billion
(US$1.43 billion) from RMB7.15 billion in the same period of 2019. The
increase was driven by strong growth in music subscription revenues
and advertising revenues, supplemented by growth in sales of
digital albums, despite a decrease in sublicensing revenues.
Revenues from music subscriptions were RMB5.56 billion (US$852
million), representing 56.0% growth compared to RMB3.56 billion for the full year of 2019,
primarily due to the increase in the number of paying users by
46.6% and the improvement of monthly ARPPU by 6.8%.
- Revenues from social entertainment services and others for the
full year of 2020 increased by 8.3% to RMB19.80 billion (US$3.04
billion) from RMB18.28 billion
in the same period of 2019, contributed by the revenue growth in
online karaoke service, supplemented by growth in live streaming
services. The increase was primary due to the improvement of
monthly ARPPU by 8.6%.
Cost of Revenues
Cost of revenues for the full year of 2020 increased by 18.4% to
RMB19.85 billion (US$3.04 billion) from RMB16.76 billion in the same period of 2019,
primarily due to increased investments in new products and content
offering, and increased revenue sharing fees to strengthen our
platform's competitiveness, and other
increased royalty content costs related to variety
shows.
Gross Profit and Gross Margin
Gross profit for the full year of 2020 increased by 7.3% year
over year to RMB9.30 billion
(US$1.43 billion) from RMB8.67 billion in the same period of 2019. Gross
margin for the full year of 2020 decreased by 2.2% to 31.9% from
34.1% in the same period of 2019. This decrease was primarily due
to increased investments in new product and content offering such
as long-form audio and TME Live, increased revenue sharing fees to
strengthen our platform's competitiveness, as well as other
increased royalty content costs related to variety shows
Operating Expenses for the Year
Total operating expenses for the full year of 2020 increased by
17.5% to RMB5.58 billion
(US$855 million) from RMB4.74 billion in the same period of 2019.
Operating expenses as a percentage of total revenues increased to
19.1% for the full year of 2020 from 18.7% in the same period of
2019.
- Selling and marketing expenses were RMB2.48 billion (US$379
million), representing 8.5% of total revenues for the full
year of 2020, as compared to 8.0% in the same period of 2019. The
increase was primarily due to increased spending in promoting new
products and content offering as we continue to invest for their
future growth. Additionally, we also increased spending to promote
our brands and existing products in order to strengthen our company
and products' competitiveness.
- General and administrative expenses were RMB3.10 billion (US$475
million), representing 10.6% of total revenues for the full
year of 2020, as compared to 10.6% in the same period of 2019.
Operating Profit for the Year
Operating profit was RMB4.71
billion (US$722 million) for
the full year of 2020, compared to operating profit of RMB4.62 billion in the same period of 2019.
Income Tax Expenses
Effective tax rate was 9.8% in 2020, compared to 12.4% in 2019,
as some of our entities became qualified for certain tax
benefits in 2020.
Net Profit and Non-IFRS Net Profit for the Year
Net profit attributable to equity holders of the Company for the
full year of 2020 was RMB4.16 billion
(US$637 million), compared to net
profit of RMB3.98 billion in the same
period of 2019. Non-IFRS net profit attributable to equity holders
of the Company was RMB4.95 billion
(US$759 million) for the full year of
2020, compared to RMB4.91 billion in
the same period of 2019. Please refer to the section in this press
release titled "Non-IFRS Financial Measure" for details.
Earnings per ADS
Basic and diluted earnings per ADS were RMB2.51 (US$0.38)
and RMB2.47 (US$0.38), respectively, for the full year of
2020. Excluding amortization of intangible assets and other assets
arising from acquisitions, share-based compensation expenses, net
losses/gains from investments, fair value change on puttable shares
and income tax effects, non-IFRS basic and diluted earnings per ADS
were RMB2.99 (US$0.46) and RMB2.95 (US$0.45),
respectively, for the full year of 2020. During the full year of
2020, the Company had weighted averages of 1.66 billion basic and
1.68 billion diluted ADSs outstanding, respectively.
Conference Call Information
Tencent Music's management will hold a conference call
on Monday, March 22, 2021, at 8:00 P.M. Eastern
Time or 8:00 A.M. Beijing Time on Tuesday,
March 23, 2021, to discuss the financial results. Listeners may
access the call by dialing the following numbers:
United States Toll
Free:
|
+1-888-317-6003
|
International:
|
+1-412-317-6061
|
Mainland China Toll
Free:
|
400-120-6115
|
Hong Kong, China Toll
Free:
|
800-963-976
|
Access
Code:
|
6516722
|
The replay will be accessible through March 29, 2021,
by dialing the following numbers:
United States Toll
Free:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Access
Code:
|
10151724
|
A live and archived webcast of the conference call will also be
available on the Company's investor relations website at
https://ir.tencentmusic.com/.
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 RMB6.5250 to US$1.00, the noon buying rate in effect on
December 31, 2020, 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.
Tencent Music 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.
Tencent Music 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.
Tencent Music 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
year excluding amortization of intangible and other assets arising
from acquisitions, share-based compensation expenses, net
losses/gains from investments, fair value change on puttable shares
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.
About Tencent Music
Entertainment
Tencent Music Entertainment Group
(NYSE: TME) is the leading online music entertainment platform in
China, operating the country's
highly popular and innovative music apps: QQ Music, Kugou Music,
Kuwo Music and WeSing. Tencent
Music's mission is to use technology to elevate the role of music
in people's lives by enabling them to create, enjoy, share and
interact with music. Tencent Music's
platform comprises online music, online karaoke and music-centric
live streaming 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. 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. 883606
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED
INCOME STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
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
|
|
2,139
|
|
2,760
|
|
423
|
|
7,152
|
|
9,349
|
|
1,433
|
Social entertainment
services and others
|
|
5,154
|
|
5,575
|
|
854
|
|
18,282
|
|
19,804
|
|
3,035
|
|
|
7,293
|
|
8,335
|
|
1,277
|
|
25,434
|
|
29,153
|
|
4,468
|
Cost of
revenues
|
|
(4,805)
|
|
(5,638)
|
|
(864)
|
|
(16,761)
|
|
(19,851)
|
|
(3,042)
|
Gross
profit
|
|
2,488
|
|
2,697
|
|
413
|
|
8,673
|
|
9,302
|
|
1,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
(671)
|
|
(773)
|
|
(118)
|
|
(2,041)
|
|
(2,475)
|
|
(379)
|
General and
administrative expenses
|
|
(747)
|
|
(906)
|
|
(139)
|
|
(2,703)
|
|
(3,101)
|
|
(475)
|
Total operating
expenses
|
|
(1,418)
|
|
(1,679)
|
|
(257)
|
|
(4,744)
|
|
(5,576)
|
|
(855)
|
Interest
income
|
|
173
|
|
156
|
|
24
|
|
615
|
|
622
|
|
95
|
Other (losses)/gains,
net
|
|
(41)
|
|
122
|
|
19
|
|
78
|
|
362
|
|
55
|
Operating
profit
|
|
1,202
|
|
1,296
|
|
199
|
|
4,622
|
|
4,710
|
|
722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of net
(loss)/profit of investments
accounted for using equity method
|
|
(8)
|
|
5
|
|
1
|
|
(18)
|
|
19
|
|
3
|
Finance
cost
|
|
(7)
|
|
(18)
|
|
(3)
|
|
(64)
|
|
(97)
|
|
(15)
|
Profit before
income tax
|
|
1,187
|
|
1,283
|
|
197
|
|
4,540
|
|
4,632
|
|
710
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(147)
|
|
(71)
|
|
(11)
|
|
(563)
|
|
(456)
|
|
(70)
|
Profit for the
period/year
|
|
1,040
|
|
1,212
|
|
186
|
|
3,977
|
|
4,176
|
|
640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
1,042
|
|
1,197
|
|
183
|
|
3,982
|
|
4,155
|
|
637
|
Non-controlling
interests
|
|
(2)
|
|
15
|
|
2
|
|
(5)
|
|
21
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class
B ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.32
|
|
0.36
|
|
0.06
|
|
1.22
|
|
1.25
|
|
0.19
|
Diluted
|
|
0.31
|
|
0.36
|
|
0.05
|
|
1.19
|
|
1.24
|
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS
(2 Class A shares
equal to 1 ADS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.63
|
|
0.72
|
|
0.11
|
|
2.43
|
|
2.51
|
|
0.38
|
Diluted
|
|
0.62
|
|
0.71
|
|
0.11
|
|
2.38
|
|
2.47
|
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings per Class A and
Class B ordinary share computation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,298,087,474
|
|
3,320,795,974
|
|
3,320,795,974
|
|
3,272,754,403
|
|
3,313,527,847
|
|
3,313,527,847
|
Diluted
|
|
3,349,111,362
|
|
3,364,932,615
|
|
3,364,932,615
|
|
3,347,572,338
|
|
3,360,460,759
|
|
3,360,460,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in
earnings per ADS
computation
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1,649,043,737
|
|
1,660,397,987
|
|
1,660,397,987
|
|
1,636,377,201
|
|
1,656,763,924
|
|
1,656,763,924
|
Diluted
|
|
1,674,555,681
|
|
1,682,466,307
|
|
1,682,466,307
|
|
1,673,786,169
|
|
1,680,230,380
|
|
1,680,230,380
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
UNAUDITED NON-IFRS
FINANCIAL MEASURE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(in millions,
except per share data)
|
|
(in millions,
except per share data)
|
Profit for the
period/year
|
|
1,040
|
|
1,212
|
|
186
|
|
3,977
|
|
4,176
|
|
640
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible and other assets arising
from business combinations*
|
|
91
|
|
103
|
|
16
|
|
362
|
|
392
|
|
60
|
Share-based
compensation
|
|
137
|
|
141
|
|
22
|
|
519
|
|
570
|
|
87
|
Losses/(gains) from
investments**
|
|
80
|
|
(39)
|
|
(6)
|
|
79
|
|
(101)
|
|
(15)
|
Fair value change on
puttable shares ***
|
|
10
|
|
9
|
|
1
|
|
37
|
|
37
|
|
6
|
Income tax
effects****
|
|
(18)
|
|
(62)
|
|
(10)
|
|
(71)
|
|
(103)
|
|
(16)
|
Non-IFRS Net
Profit
|
|
1,340
|
|
1,364
|
|
209
|
|
4,903
|
|
4,971
|
|
762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
|
1,342
|
|
1,349
|
|
207
|
|
4,908
|
|
4,950
|
|
759
|
Non-controlling
interests
|
|
(2)
|
|
15
|
|
2
|
|
(5)
|
|
21
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
for Class A and Class B
ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.41
|
|
0.41
|
|
0.06
|
|
1.50
|
|
1.49
|
|
0.23
|
Diluted
|
|
0.40
|
|
0.40
|
|
0.06
|
|
1.47
|
|
1.47
|
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS
(2 Class A shares equal to 1
ADS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.81
|
|
0.81
|
|
0.12
|
|
3.00
|
|
2.99
|
|
0.46
|
Diluted
|
|
0.80
|
|
0.80
|
|
0.12
|
|
2.93
|
|
2.95
|
|
0.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
earnings per Class A and
Class B ordinary share computation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
3,298,087,474
|
|
3,320,795,974
|
|
3,320,795,974
|
|
3,272,754,403
|
|
3,313,527,847
|
|
3,313,527,847
|
Diluted
|
|
3,349,111,362
|
|
3,364,932,615
|
|
3,364,932,615
|
|
3,347,572,338
|
|
3,360,460,759
|
|
3,360,460,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS used in
earnings per ADS computation
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1,649,043,737
|
|
1,660,397,987
|
|
1,660,397,987
|
|
1,636,377,201
|
|
1,656,763,924
|
|
1,656,763,924
|
Diluted
|
|
1,674,555,681
|
|
1,682,466,307
|
|
1,682,466,307
|
|
1,673,786,169
|
|
1,680,230,380
|
|
1,680,230,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
fair value changes on the put liability of certain shares issued in
2018
|
**** Represents the
income tax effects of Non-IFRS adjustments
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONSOLIDATED
BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
As at December 31,
2019
|
|
As at December 31,
2020
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
(in
millions)
|
ASSETS
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property,
plant and equipment
|
|
179
|
|
176
|
|
27
|
Right-of-use
assets
|
|
148
|
|
311
|
|
48
|
Intangible
assets
|
|
1,622
|
|
2,020
|
|
310
|
Goodwill
|
|
17,140
|
|
17,492
|
|
2,681
|
Investments
accounted for using equity method
|
|
489
|
|
2,255
|
|
346
|
Financial
assets at fair value through other comprehensive
income
|
4,461
|
|
9,771
|
|
1,497
|
Other
investments
|
|
217
|
|
349
|
|
53
|
Prepayments,
deposits and other assets
|
|
816
|
|
956
|
|
147
|
Deferred tax
assets
|
|
192
|
|
303
|
|
46
|
Term
deposits
|
|
500
|
|
2,953
|
|
453
|
|
|
25,764
|
|
36,586
|
|
5,607
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Inventories
|
|
26
|
|
18
|
|
3
|
Accounts
receivable
|
|
2,198
|
|
2,800
|
|
429
|
Prepayments,
deposits and other assets
|
|
2,220
|
|
2,846
|
|
436
|
Other
investments
|
|
38
|
|
37
|
|
6
|
Short-term
investments
|
|
6
|
|
-
|
|
-
|
Term
deposits
|
|
7,000
|
|
14,858
|
|
2,277
|
Cash and cash
equivalents
|
|
15,426
|
|
11,128
|
|
1,705
|
|
|
26,914
|
|
31,687
|
|
4,856
|
|
|
|
|
|
|
|
Total
assets
|
|
52,678
|
|
68,273
|
|
10,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Equity
attributable to equity holders of the
Company
|
|
|
|
|
|
|
Share
capital
|
|
2
|
|
2
|
|
0
|
Additional
paid-in capital
|
|
34,425
|
|
35,044
|
|
5,371
|
Shares held
for share award schemes
|
|
(31)
|
|
(78)
|
|
(12)
|
Treasury
shares
|
|
|
|
(134)
|
|
(21)
|
Other
reserves
|
|
2,187
|
|
6,300
|
|
966
|
Retained
earnings
|
|
7,007
|
|
11,111
|
|
1,703
|
|
|
43,590
|
|
52,245
|
|
8,007
|
Non-controlling
interests
|
|
88
|
|
486
|
|
74
|
|
|
|
|
|
|
|
Total
equity
|
|
43,678
|
|
52,731
|
|
8,081
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Notes
payable
|
|
-
|
|
5,175
|
|
793
|
Accounts
payable
|
|
-
|
|
136
|
|
21
|
Other payables
and other liabilities
|
|
68
|
|
68
|
|
10
|
Deferred tax
liabilities
|
|
297
|
|
265
|
|
41
|
Lease
liabilities
|
|
78
|
|
218
|
|
33
|
Deferred
revenue
|
|
67
|
|
78
|
|
12
|
|
|
510
|
|
5,940
|
|
910
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
2,559
|
|
3,565
|
|
546
|
Other payables
and other liabilities
|
|
3,782
|
|
3,881
|
|
595
|
Current tax
liabilities
|
|
386
|
|
445
|
|
68
|
Lease
liabilities
|
|
69
|
|
103
|
|
16
|
Deferred
revenue
|
|
1,694
|
|
1,608
|
|
246
|
|
|
8,490
|
|
9,602
|
|
1,472
|
|
|
|
|
|
|
|
Total
liabilities
|
|
9,000
|
|
15,542
|
|
2,382
|
|
|
|
|
|
|
|
Total equity and
liabilities
|
|
52,678
|
|
68,273
|
|
10,463
|
TENCENT MUSIC
ENTERTAINMENT GROUP
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2019
|
|
2020
|
|
2019
|
|
2020
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
Unaudited
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
Unaudited
|
|
Unaudited
|
|
|
(in
millions)
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities
|
|
2,033
|
|
1,864
|
|
286
|
|
6,200
|
|
4,885
|
|
749
|
Net cash used in
investing activities
|
|
(6,572)
|
|
(143)
|
|
(22)
|
|
(8,102)
|
|
(14,206)
|
|
(2,177)
|
Net cash (used
in)/provided by financing activities
|
|
(73)
|
|
19
|
|
3
|
|
(31)
|
|
5,292
|
|
811
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(4,612)
|
|
1,740
|
|
267
|
|
(1,933)
|
|
(4,029)
|
|
(617)
|
Cash and cash
equivalents at beginning of the period/year
|
|
20,036
|
|
9,641
|
|
1,478
|
|
17,356
|
|
15,426
|
|
2,364
|
Exchange differences
on cash and cash equivalents
|
|
2
|
|
(253)
|
|
(39)
|
|
3
|
|
(269)
|
|
(41)
|
Cash and cash
equivalents at end of the period/year
|
|
15,426
|
|
11,128
|
|
1,705
|
|
15,426
|
|
11,128
|
|
1,705
|
View original
content:http://www.prnewswire.com/news-releases/tencent-music-entertainment-group-announces-fourth-quarter-and-full-year-2020-unaudited-financial-results-301252954.html
SOURCE Tencent Music Entertainment
Group