2q21 performance meeting minutes have a relevant framework for future supervision, which will not affect the company’s long-term business structure From tencent

The following is the 2q21 performance meeting minutes have a relevant framework for future supervision, which will not affect the company’s long-term business structure From tencent recommended by recordtrend.com. And this article belongs to the classification: social networks, Network entertainment, network service, network game.

On August 19, 2021, Tencent announced its second quarter earnings today, followed by a earnings conference call.

The following is the minutes of the Q & a session:

Q&A：

Q1: are there more advertisers using applets? How to view the long-term advertising revenue? What are Tencent’s views and measures on improving applet ecology?

A1: in the long run, many enterprises have started to use applets, which have further increased our advertising revenue. In the wechat environment, there are many very good applets, and the applets can also generate a lot of growing advertising revenue. We expect Q2 and Q3 to grow further. In addition, during the Olympic Games, our video number also has a lot of new revenue. Driven by these important driving factors, I think the advertising revenue in Q3 will further increase in the future, and it may also decline due to regulatory factors.

Q2: in terms of Tencent’s use of professional technology to provide public services and improve efficiency, Tencent currently has software such as Tencent conference. What supplementary services and software will be available in the future, and what opportunities will this bring?

A2: our software to improve efficiency is not directly realized at present. Many solutions rely on the deployment of enterprise users to open the door. In the U.S. market, some of our products have been successfully commercialized, such as Tencent conference, Tencent documents, etc. Each has its own realization mode. At present, we are developing more additional functions and software. These services will form a certain commercial solution, build a service system, and give a “software + service” solution mode to improve efficiency for users. These services will strive to create value and form its business value while providing customers with high efficiency.

Q3: are there any changes in market regulation that need our attention? It’s completely different from a few quarters ago. What’s the impact?

A3: if we are required to mention one, it is the double reduction policy, which has been greatly impacted in the field of training, and the advertising investment in this field is also decreasing.

Q4: we know that China’s education and training industry has been greatly impacted by the regulatory impact. Does the company communicate with the regulatory side on relevant businesses? For example, the introduction of the “double reduction policy”?

A4: Global Internet regulation is the general trend. China’s structured regulation in the Internet field is leading and strict in the world. At present, China’s Internet regulation is relatively loose, but it is tightening. Second, the government needs the healthy and orderly development of the Internet industry. We also welcome more regulation in the market in the future, because it can better improve our social value and standardize our behavior. Therefore, we will fully integrate and embrace this new wave of regulatory policies. Our operating philosophy and standard is to create value for users. Considering the short-term uncertainty of these adjustments, new policies may appear in the future, but we believe we can handle them well. In terms of tax rate, the effective tax rate in the first half of 2021 is 11%, the same as that in the first half of 2020. According to non IFRS adjustment, the overall tax rate difference in 2021 is about 3%.

Q5: will there be stricter regulation on games? For example, the game duration for children under 12 and teenagers.

A5: the use of games for teenagers, including time investment and recharge, is an aspect we have been paying attention to, and our control in this aspect has achieved some results. In addition, we are also in close communication with regulators. From the perspective of the whole game industry, we are hoping to reach an agreement with the regulators to build a mechanism to monitor the total use time of teenagers across different games. At present, we are trying to further communicate with the regulatory authorities. I believe that if the policy can be reached, the game supervision for teenagers will be more effective and the accusations against the game industry will be gradually weakened.

Q6: is there a definite time point for the opening of the ecosystem? What is the potential impact? What opportunities will it bring?

A6: Tencent’s ecosystem has always been open, focusing on helping small and medium-sized enterprises to achieve further development. Tencent’s ecosystem is fundamentally open, and users can copy and paste. For the ecosystem, taking wechat as an example, the principle is to help the development and growth of small and medium-sized enterprises. Under this principle, many tool guides have been launched to achieve the vision of support. The platform has also been launched, but the process is complex, there are many businesses, and the platform rules are important, resulting in complex problems, such as how to protect copyright in many resources and so on. In this regard, we need to consider and explore. This is the focus and vision. There are some problems that are not well solved at present. There are many merchants and users, and we will treat them with caution.

Q7: what strategy do we adopt, especially for video numbers, such as the content management of video numbers?

A7: so far, the development of video number is still very healthy, including content and duration. The content of Tokyo Olympic Games is also very popular. We pay more attention to content ecology, including content quality, recommendation mechanism, etc. As for the realization of video content, the current focus is not on the realization.

Q8: in the context of recent policies on the protection of minor players, will the company’s development of new games stagnate or delay? Does the regulation of games mean less business opportunities?

A8: we have quantified the impact of the supervision of minor players. At present, it will have a certain impact. At present, the company has games in research and development, and has achieved success in China, Japan and other places. Therefore, in view of the uncertainty of the environment, we will make corresponding adjustments in the long and short term. We also hope that players can exercise self-restraint as much as possible in the game.

Q9: it is noted that Tencent has stricter measures for children under the age of 12 and limits their game consumption. Does this belong to Tencent’s corporate social responsibility strategy? In the long run, what will change Tencent’s corporate strategy? The long-term impact of corporate social responsibility on finance?

A9: the income contributed by players under the age of 12 only accounts for about 0.3% of our game flow, so the restrictions on them will not have too much impact on us. In the long run, our profitability is composed of different departments. We have many profitable businesses and some loss areas. We hope these loss areas will turn losses into profits in the future. We believe that Tencent has developed an overall strategy that is sustainable and profitable. In addition, the IFRS investment of billions of RMB will also bring us benefits.

Q10: future regulatory direction?

A10: there are already relevant frameworks. Because there are different regulatory entities and different regulatory requirements for different industries and departments, there will be more regulatory requirements in the future. We may really need to do more analysis. The company will continue to ensure that the business is fully compliant, the supervision will not affect the company’s long-term business construction, and will continue to make efforts in the fields of SaaS, games and short video. The short-term business results also show that the company is in the right direction.

Q11: the company’s financial services business has a high growth rate in Q2. How many of them come from the cloud and how many from other aspects? What is the gross profit of cloud services?

A11: cloud business is developing well. This market is growing every year, because the growth rate of infrastructure development is very good, especially in cloud software and communication technology, and the gross profit is growing every year. However, at present, its realization rate is low, and we hope to further improve the permeability of this part.

Q12: the change of management team in the first half of the year reflects Tencent’s attention to content. What is the target strategy of content? What is the focus of content investment? What is the development of Tencent meta universe related content?

A12: Tencent is right to pay more attention to content. We are also seizing the opportunity to produce more upstream content, covering the fields of literature, film and animation, and forming a joint force on different platforms. The “you are my glory” film released by our product King glory has been very popular, with a lot of discussion in different media and IP value. In addition, we will also focus on a wider range of valuable and marketable products such as digital IP works and mobile games, which is a good trend. We call it a content centered scheme and a platform work. Tencent has noticed the content centered development opportunities and hopes to promote its development in China.

Tencent is very interested in the meta universe and thinks it is a good opportunity. There are many ways to develop the meta universe. The meta universe has social attributes and can create more social networks. For most enterprises, the use of the meta universe is beneficial. The meta universe has the opportunity to enter offline real assets and put them into the meta universe process. We are social networking experts and leaders in the online game industry. We have confidence in the real-world asset virtualization meta universe.

Q13: reinvestment plan, review the investment direction from last quarter to now? And 22 year investment plan and adjustment.

A13: we generally don’t give guidance. We gave some signals last quarter about the adjustment of reinvestment in short videos, games and enterprise services. More importantly, it is to evaluate whether the reinvestment can be realized, promote the growth of the company’s revenue and the growth of international business. Our game has the opportunity of transformation for the first time, and has also entered the Japanese market, which is the correct development direction of the game industry; The dau and browsing time of short video are also expanded. In the next two or six quarters, we will pay more attention to business, enterprise software and video accounts, so as to promote more long-term advertising revenue, which is a long-term plan and Optimization in international business.

Q14: does the current supervision of data collection and user privacy affect the company’s advertising?

A14: during targeted advertising, we have strict control over user data and privacy. We will supervise the use of user data, especially the strict supervision of advertising. This is very important to us. We hope to pay more attention to the protection of user privacy in the localization process.

Q15: when exploring overseas game opportunities and expanding overseas business, do we pay more attention to mobile games or PC games? It is noted that Tencent has cultivated some game studios in the United States. Can you provide more information in this regard?

A15: from the global game market in the last quarter, in addition to mobile games, our PC games are also very successful. Last year, we invested three times our manpower and financial resources in the development of platform games, including mobile games, Xbox, PC, switch, etc. These are the game carriers we pay attention to. Our studio is also very concerned about the game infrastructure. In terms of software development and game engine, we hope to realize the synchronous development of game engine, especially in Game Studios outside China. We hope to further promote the work in this regard.

Q16: in terms of long video supervision, will the supervision direction be strengthened or relaxed, such as reality shows, film and television dramas?

A16: video has attracted much attention. In terms of content restrictions, more successful TV dramas will be launched, including reality shows. Some works have the expectation of realization, and there will be more successful film and television products with liquidity.

Q17: the international game market is changing rapidly. What will be deployed in the game field in the future? Is it internal R & D or M & A? What was the contribution of the game business in the second quarter?

A17: Overseas games contributed 25%, with a year-on-year increase of 37%. In China, both QQ and wechat are very important platforms, including distribution and content composition, which are more content driven. The future revenue point is the lack of technology in the existing studios and the supplement of M & A activities to expand the growth of international game business. A large part of them are games developed in China, as well as some excellent studios from abroad, such as tribal conflicts, cross brand international well-known cooperation, and products in the incubation stage.

Via futu shares read more: Tencent: the total revenue in the first half of 2021 was 273.6 billion yuan, up 23% year-on-year. Tencent: 1q18 operating profit increased 59% year-on-year to 30.7 billion yuan. Netease: 1q20 net profit exceeded market expectations by 3.5 billion yuan. Tencent: 1q20 total revenue was 108.065 billion yuan, up 26% year-on-year. Tencent: 1q20 earnings conference call summary embraces structural changes Sohu: 1q20 revenue narrowed by $436 million Year on year loss reduction of over 60% iqiyi: 1q20 total revenue of 7.6 billion, exceeding the expectation, net increase of 12 million members in a single quarter, station B: 1q20 revenue of 2.32 billion yuan, a year-on-year increase of 69%, Tencent: 2019 total revenue of 377.289 billion yuan, a year-on-year increase of 21%, Tencent: illustration of Tencent 1q20 financial report, social networking, games Tencent: 2q20 revenue was 114.883 billion yuan, up 29% year-on-year; iqiyi: 2020 revenue was 29.7 billion yuan, up 2% year-on-year; trafficguard: social network application downloads in Islamic countries increased 12% during Ramadan

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