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Tencent’s revenue increased 0.5% year-on-year in Q4 2022

The company saw a small rebound following a turbulent year
Tencent’s revenue increased 0.5% year-on-year in Q4 2022
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Tencent has reported total revenue of 145 billion yuan ($20.8 billion) in Q4 2022, representing a 0.5% increase from the same period in 2021.

Profit for the period increased 19% year-on-year to 30.6 billion yuan ($4.4 billion), with the net margin increasing from 18% to 21%. Operating profit likewise increasing by 19% to 39.4 billion yuan ($5.7 billion), with the operating margin increasing from 23% to 27%.

“During 2022, we increased our business efficiency, sharpened our focus on core activities, and developed new services and revenue lines including Video Accounts and international games,” said Tencent CEO and chairman Pony Ma. “These changes position us to benefit from, and contribute to, a rebound in China economic growth which our users’ activity suggests is now underway.

“We are investing in our AI capabilities and cloud infrastructure to embrace foundation models, which we believe will enhance the experience of our existing products and services and allow us to explore introducing new products. Looking forward, we will continue to seek creating user value, commercial value and social value via technology and innovation.”

A mixed year

2022 proved to be a challenging year for Tencent, with the company reporting its first quarterly loss since listing, facing numerous lawsuits, and dealing with China’s increasingly strict regulations on the gaming sector. However, analysts predicted that the company would bounce back in 2023, with the possibility of greater stability in Q4. The latest financial report for the company suggests that these predictions, at least in part, were accurate.

Revenue for the full year fell 1% compared to 2021, reaching 554.6 billion yuan ($79.6 billion). Operating profit fell 4% to 153.5 billion yuan ($22 billion), with operating margin remaining stable 28%. Full year profit reached 119.2 billion yuan ($17.1 billion), representing a 7% decrease, with net margin falling from 23% in 2021 to 21%.

In a news conference, Tencent president Martin Lau said “Last year’s efforts have resulted in a more focused business structure, more responsive teams, and pushed our employees and managers to focus more on costs and efficiency.”

We listed Tencent as one of the top 50 mobile game makers of 2022.