Today we take yesterday (May 17, 2023) Tencent's 2023 first quarter report meeting as an example.
First of all, let’s take a look at what Pony (Ma Huateng) said at the beginning of the article to see how the meeting minutes in multi-scenario AI question-and-answer scenarios perform:
Ma Huateng: Thank you, Wendy. Good evening. Thank you for joining us. In the first quarter of $Tencent Holdings (00700)$, our revenue returned to double-digit growth as our payment volume benefited from and contributed to the recovery of domestic consumption.
Our game revenue has improved and advertising revenue has maintained rapid growth. Our non-IFRS net profit grew faster, reflecting positive revenue mix shifts, operating efficiencies and a relaxed base period. We are investing in our AI capabilities and cloud infrastructure to embrace the opportunities presented by the foundational model and expect AI to be a growth multiplier that enables us to better serve our users, customers, and society at large.
Let me now look at the key financials for the quarter. Total revenue was RMB 150 billion, an increase of 11% year-on-year and 3% quarter-on-quarter. Gross profit was RMB 68 billion, a year-on-year increase of 19% and a quarter-on-quarter increase of 10%.
Non-IFRS operating profit was RMB 48 billion, a year-on-year increase of 32% and a quarter-on-quarter increase of 23%. Non-IFRS net profit attributable to equity holders was RMB 33 billion, a year-on-year increase of 27% and a quarter-on-quarter increase of 10%. Through our key services, we focus on upgrading our technology and product innovation.
Our communications and social networking franchise remains strong. Combined MOUs of WeChat and WeChat increased 2% YoY to 1.3 billion, while QQ mobile device MOUs increased 6% YoY to 597 million. For games, we extend our leadership by expanding the visibility of established franchises and the success of new launches in China and international markets. For digital content, we maintained our number one position through subscription accounts, offering high-quality video, music and literary content. In fintech services, commercial payment volumes picked up sharply as consumer activity in China recovered.
For cloud, we operate one of the largest infrastructure-as-a-service platforms in China, and released our high-performance computing cluster in April, which will significantly improve the efficiency of our underlying model chain. We are the second largest component supplier in China by revenue, and we operate leading SaaS tools such as Tencent Meeting, the most widely used standalone video conferencing application.
First, open the Q&A of Knowing AI :
Click "Meeting Minutes" in the company copy:
Pop up as follows:
Fill in the "meeting content" and the limited number of words, and click "submit":
Do you know AI question and answer will be generated, if the limited number of words is less, the generated meeting minutes will be shorter:
Theme of the meeting: Minutes of the first quarter financial performance report meeting of Tencent Holdings
Participants: unknown
Meeting points:
- Revenue returned to double-digit growth in the quarter, mainly due to the recovery of domestic consumption and the rapid growth of advertising revenue.
- Gaming revenue improved, with non-IFRS net profit attributable to equity holders up 27% YoY.
- Tencent Holdings has invested in AI and cloud infrastructure to embrace the opportunities brought by the underlying model and expects AI to be a growth multiplier.
- Total revenue was RMB 150 billion, an increase of 11% year-on-year and 3% quarter-on-quarter. Gross profit was RMB 68 billion, a year-on-year increase of 19% and a quarter-on-quarter increase of 10%.
- Tencent Holdings' franchise in communications and social networking remains strong. Combined MOUs for WeChat and WeChat increased 2% year-over-year to 1.3 billion, while QQ mobile device MOUs increased 6% year-over-year to 597 million.
- The volume of commercial payments in financial technology services rebounded sharply, and digital content maintained its No. 1 position.
- Tencent Holdings operates one of the largest infrastructure-as-a-service platforms in China and released a high-performance computing cluster in April, which will significantly improve the efficiency of the underlying model chain.
Let’s take a look at another passage from President Liu Chiping :
Goldman Sachs analyst Ronald Keung: My first question is about the macro advertising business. It has been two quarters since the opening of the Chinese market. What is the management’s view on the consumption prospects? With the gradual growth of e-commerce and other businesses, the management believes that the company’s advertising business and video account business revenue will increase in the second half of 2023. continue to grow?
In addition, could you ask the management to talk about your views on the basic model of artificial intelligence? What is Tencent's position in the industry? What kind of commercial value impact will it bring to Tencent's business? I believe everyone can see that as With the introduction of different regulations, more and more companies choose to enter the "artificial intelligence". From Tencent’s perspective, how does the management think artificial intelligence will drive the company’s future growth? Will it benefit the growth of Tencent’s cloud services in the second half of the year?
James Michelle: In terms of advertising, we all agree that the Chinese advertising market is currently experiencing a large-scale consumption recovery. Of course, not every category has the same recovery momentum. It may be that daily low-priced products have a more obvious momentum, while high-priced products have greater differences in performance. In terms of advertising revenue, Tencent is currently performing strongly in almost all categories, especially FMCG, e-commerce, finance, online services, healthcare, and travel. So far we haven't seen any weaker verticals. Demand for some vertical categories such as automobiles and electronic products still fluctuates, but we have also seen that companies in these vertical categories are still very keen on marketing, and one of the manifestations is to actively place advertisements on our platform.
Liu Chiping: In terms of the basic model of artificial intelligence, in fact, your question contains a lot of content, and it is difficult to answer them one by one. I will try to focus on the key points here.
As far as future development is concerned, we believe: First, there will be many models in the future market. I believe that every big company will have its own basic artificial intelligence model, which will not only be used within the company, but will also be market-oriented. Provide services to users. In addition, some start-up companies will try to create their own basic artificial intelligence models, which may be more applicable to a specific industry or category. All in all, I believe this will be a very active area in the future from a model usability standpoint.
In terms of application, I believe that artificial intelligence will be applied in different fields in the future. On the whole, more AI-driven applications will appear in these fields, such as user-machine interaction, information retrieval and generation, etc. For example, in terms of user interaction services, such as social networking, short video, games, and long video, the application of artificial intelligence will help improve content quality, improve content creation efficiency, and reduce content creation costs.
As for the regulatory issue you mentioned, at present, we believe that the macroscopic stance of the government department is supportive and positive, but we also firmly believe that this industry must be regulated. This kind of regulation is not unique to China, it is the same all over the world. You can see that there are a lot of discussions around industry regulation in the United States, and even the founder of OpenAI once pointed out that the industry must accept government supervision. Personally, I think this kind of regulation is extremely necessary. Under the correct regulatory framework, government departments maintain a supportive and positive attitude towards innovation, and good regulation will also bring a healthier development space for the industry.
You also mentioned the chip issue. At present, chip availability is available. I believe that all parties "into the game" are trying their best to obtain resources, and there may be a short-term chip shortage at that time, but as time goes by, I believe that the supply of chips will gradually recover, and all companies that want to build artificial intelligence basic models will also can obtain the required resources.
Credit Suisse analyst Kenneth Fong: My first question is about the gap between the company's revenue and profit. I noticed that this quarter, under the influence of positive factors such as video account monetization, operating leverage, and cost optimization, there is a big difference between the company's non-IAS net income growth and revenue growth. How does management see the trend for the next few quarters? My second question is about the tax rate. I see that the company's effective tax rate is quite high this quarter due to the impact of the deferred tax of the foreign subsidiaries, but I don't seem to see the adjustment made by the company in the non-GAAP net income. May I ask the management, what impact will the subsidiary's deferred tax have on the company's adjusted net profit?
Liu Chiping: As you can see, there is a big difference between the company's revenue growth and non-IAS net income growth this quarter. We believe that the reason behind this is that the non-IAS profit base was relatively low in the same period last year. We hope that the gap between the two can gradually narrow as the base effect normalizes. On the other hand, Tencent is gradually becoming a more cost-conscious and efficient mature company than in the past, which also helps to improve the company's profit margins. We also have many new sources of income, such as video accounts, e-commerce live broadcast monetization, and mini-program income. The gross profit of these businesses is relatively high. Compared with previous years, it is a relatively favorable and positive product profit mix for us.
All in all, we hope that the company's profit growth can be greater than or equal to revenue growth. However, due to the base effect and some factors just mentioned, there is a big difference between the company's profit growth and revenue growth in this quarter.
Luo Shuohan: Regarding the deferred tax adjustment you mentioned, we usually do not examine the company's effective tax rate on a quarterly basis, but on a yearly basis. This is because circumstances are always changing, and there are occasional withholding taxes, or the need to increase remittances to overseas subsidiaries, etc. But in order to give everyone a more comprehensive understanding of Tencent's effective tax rate, we expect the company's effective tax rate in 2023 to be between 18% and 20% (calculated based on non-international accounting standards).
Knowing AI Q&A will generate :
Conference Topic: Analysis of Tencent’s Second Quarter Financial Report
Participants: Participants: Luo Shuohan, Liu Chiping, James Michelle, Kenneth Fong, Ronald Keung
Conference content:
Participant Ronald Keung asked questions about the management's views on the future Chinese advertising market and whether the company's advertising business and video account business revenue growth will continue to grow. In this regard, James Michelle said that the Chinese advertising market is currently experiencing a large-scale consumption recovery. Tencent has a strong performance in advertising revenue, especially in vertical categories such as FMCG, e-commerce, finance, online services, healthcare, and travel. There are currently no weaker performing classes seen. As for whether growth will continue in the future, management is supportive but believes the industry must be regulated.
Regarding the basic model of artificial intelligence, Liu Chiping believes that all major companies will have their own models, and these models will provide services for users in the market. At the same time, some start-up companies will try to create models suitable for a specific industry or category. In terms of application, artificial intelligence will be applied in different fields, especially in the aspect of user interaction services, there will be more artificial intelligence-driven applications.
In response to Kenneth Fong's question about the gap between the company's revenue and profit, Liu Chiping said that the large difference is due to the relatively low non-IAS profit base in the same period last year. At the same time, Tencent is gradually becoming a more cost-conscious and efficient mature company, and has many newer sources of income, such as video accounts, e-commerce live broadcast monetization, and mini-program income. The gross profit of these businesses is relatively high. For For Tencent, it is a relatively favorable and positive product profit mix. Regarding the tax rate issue, Luo Shuohan said that the company usually examines the effective tax rate on an annual basis, and predicts that the company's effective tax rate in 2023 will be between 18% and 20%.
Minutes end.
Through the above two examples, do you have a deeper understanding of the "meeting minutes" function in the AI Q&A? ChatGPT's meeting minutes function can bring many benefits to people who often write meeting minutes, including:
1. Time and labor saving: Writing meeting minutes is usually a time-consuming task that requires listening to meeting recordings or reading meeting minutes and organizing important information into clear minutes. ChatGPT's meeting minutes function can help people automate this process, reducing the time and labor of manually writing minutes.
2. Improve accuracy and consistency: ChatGPT can convert meeting content into minutes in a high-speed and accurate manner, reducing errors and omissions that may occur due to manual writing. It records meeting details in a fast and coherent manner, ensuring that decisions, action items and important discussion points are accurately recorded.
3. Convenient access and sharing: The generated meeting minutes can be saved in text form and easily shared with the participants or other relevant personnel. This allows participants to review meeting content at any time, quickly review discussion points, or share minutes with those unable to attend the meeting.
4. Fast information retrieval: The meeting minutes generated by ChatGPT are usually organized and classified according to the keywords and topics discussed, so that participants can quickly retrieve and locate the discussion content of specific topics. This aspect is very helpful for follow-up and follow-up.
5. Specialization and standardization: The meeting minutes generated by ChatGPT can follow a predetermined template or structure to ensure the consistency and standardization of the minutes. This helps to improve the quality and standardization of meeting minutes within the organization, making them more professional.
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The above screenshots are all from our AI assistant: Zhiwu AI Q&A, a platform based on OpenAI’s GPT-3.5 version, which provides professional, high-speed, and stable copywriting and question-and-answer functions. One-click login by scanning the WeChat code, no other complicated verification is required, and new users can try it for free for 3 days.
