Key working metrics have been sturdy, because the mixed month-to-month lively customers (MAU) of Weixin and WeChat rose eight.2 per cent on a yr in the past to 1.2 billion on March 31. Clearly Tencent is close to saturation in China, however has scope for progress in neighbouring markets equivalent to south-east Asia and India.
Good gadget MAU of prompt messaging service QQ stood at 693.5 million on the finish of the quarter, down 1.zero per cent year-on-year. Many competing alternate options counsel customers have peaked, though there may be some scope for elevated monetisation. Tencent must play a balancing act, although, to keep away from cannibalising the totally different platforms.
Charge-based VAS (value-added providers) registered subscriptions hit 197.four million within the quarter, up 19.three per cent, and there may be substantial scope for this determine to extend because the Chinese language change into used to paying for content material. Progress was pushed by video and music subscriptions. Whole video subscriptions surged 26 per cent year-on-year to 112 million and music subscriptions have been up 50 per cent to 43 million. There may have been an accelerated increase from the stay-at-home restrictions, however well-liked self-commissioned video content material and an increasing music library bode effectively for progress in continued use.
The corporate has appointed a brand new administration group at subsidiary China Literature and can search to adapt its literature mental property into numerous media codecs equivalent to TV sequence, anime and video games. On this approach the corporate may add important worth.
Tencent has additionally reportedly signed a deal to accumulate the property of iFlix, a small video streaming platform in south and south-east Asia with about 25 million customers. Administration sees this as being in step with a technique to increase the worldwide streaming platform, WeTV, throughout south-east Asia.
There are additionally ideas that Tencent is desirous about buying a major stake in iQiYi, a key competitor to Tencent’s video enterprise in China. Tencent has a protracted observe report of taking stakes in competing corporations to merge and consolidate them inside trade verticals.
Regardless of hitting report ranges, Tencent’s share worth doesn’t look overvalued, given sturdy progress prospects and highly effective market positions in areas equivalent to video video games, China’s social media market, e-payments and a considerable alternative in cloud computing.
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