Tencent Beats On Q4 Earnings, Hikes Dividend By 33.33%

China’s Tencent Holdings Ltd TCEHY reported a 26% year-on-year revenue growth to $20.5 billion (RMB 133.7 billion) in the fourth quarter of FY20, beating the consensus estimate of $20.1 billion.

• The growth stemmed from higher revenue from online games, international games, smartphone games, social networks, digital content services, online advertising, fintech and, business services.
• The combined Monthly Active Users (MAU) of Weixin and WeChat rose 5.2% to 1.2 billion as of December 31, 2020. Smart device MAU of QQ declined 8.1% to 594.9 million. Fee-based VAS registered subscriptions rose 21.9% to 219.5 million.
• Operating profit rose 26% to $5.8 billion (RMB38 billion) with a stable margin of 28%. Adjusted EBITDA increased 21% to RMB46.5 billion with a 100-basis points margin contraction to 35%.
• Net profit rose 175% to $9.1 billion (RMB59.3 billion), and Non-IFRS EPS of RMB3.413 beat the consensus estimate of RMB3.26.
• Capital expenditures declined 43% to RMB9.7 billion, and free cash flow fell 11% to RMB27.7 billion.
• The closing quarterly cash balance amounted to $39.8 billion (RMB259.5 billion).
• Tencent hiked the FY20 dividend per share by 33.33% to HKD1.60.
• The company extended its leading position in the consumer internet space with enriched content and innovations across products while making notable international expansion progress, starting with games as per CEO Ma Huateng. The company further penetrated the industrial internet with flagship SaaS products and upgraded cloud infrastructure.
• Price action: TCEHY shares closed at $80.93 on Tuesday.