Title: Visual China, this article is from the public number:outside the table (ID:excel -ers) , author: Zhou Xiao, editor: Reno, data support: insight data Institute

On the afternoon of November 13, Tencent released the 19Q3 financial report. This coincides with Tencent’s announcement of the first anniversary of organizational restructuring, but it has made a lot of investors stunned. Before the earnings report, Tencent’s share price has started to float green. It closed down by 0.85% on the same day. Since the opening of the market this morning, it has fallen by 2.32% at 10:20.

The financial report shows that 19Q3 Tencent’s revenue was about 97.2 billion yuan, which was less than the market expectation of 99.044 billion yuan; net profit was 20.382 billion yuan, down 13% year-on-year, and it did not reach the market expectation of 23.531 billion yuan. Excluding the recurring profits, the profit from continuing operations was only 20 billion yuan, down more than 600 million from the previous quarter, and no growth was seen.

However, when we delved into the root causes of the year-on-year decline in net profit, we found that Tencent’s domestic heavy truck was a more deadly engine crisis. This article will deeply analyze the problems exposed by Tencent Q3’s financial report through the following three aspects.

1 There is no increase in profit, and the financial move is exhausted

2 bytes of beating, is shaking the foundation of Tencent

3 Penguin’s “Opportunity and Pride”

profit growth slot, financial ups and downs are exhausted

In the Q3 earnings report, Tencent attributed the year-on-year decline in net profit to investment impairment. The implication is that the main business is not making money, but the investment profit is not as much as it used to be.

Therefore we push back from this sentence, does it mean that the net profit data before Tencent is sufficiently good to be derived from the vote?The profits released by the capital enterprises, not the operating profits of the actual business?

The data of the first three years of the resumption of Tencent can be found that the moisture of the net profit is indeed very large. In the figure below, the yellow line represents the actual operating profit, while the blue is the net profit. Since the beginning of 17 years, the gap between the blue column and the yellow line has expanded significantly, until the gap narrowed rapidly in 19Q2, and returned to the difference level of three years ago in Q3.

This shows that 17Q1 Tencent began to enrich its net profit through investment income, which is derived from the one-time release of profits after the listed company is listed. However, “one-off” must mean short-term or speculative. When these companies’ profit free space is exhausted, they can no longer contribute new profit vitality, which directly leads to the 19Q3 profit impairment.

In addition to the investment income of Tenggeng, Tencent had previously calculated the cost of the calculation. Since 17Q4, Tencent’s marketing expenses have been falling in proportion to revenue. Even in 19Q1 fell to less than 5%, also in 19Q1, Tencent’s net profit hit a peak of 27.9 billion.

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Time goes to 19Q3, the exhaustion of investment income and the increase in sales expenses have resulted in zero profit growth. Someone here will ask, since the cost can be cutFinishing the level of profit, then why is the proportion of Tencent’s marketing expenses increasing in the quarter when investment income is not available?

The reason is that the bytebeat has been burned to Tencent’s back garden. Tencent has to resist at least because of self-defense, which is reflected in marketing expenses. However, when we thoroughly analyzed the specific financial data of Tencent’s response to the Totem Storm, we found that the bigger problem was that we were indifferent to the fire in the back garden.

Bytes beating, is shaking the foundation of Tencent

In June of the 18th year, Tencent sued the “headline system” for unfair competition with a claim of 1 yuan, and the head-to-head battle kicked off.

Fundamentally, the essence of this competition is the giant battle of the content industry. Bytes have vibrato, headlines and watermelon videos; Tencent sits on WeChat QQ, layout fast. With the continuous consumption of the mobile Internet dividend, the battlefield of the Teng Teng war will also be transferred from the user’s incremental competition to the user’s time.

In the past 17 years, the headline products have developed rapidly, and the MAU compound growth rate has reached 48%. In 10 quarters, it has grown rapidly from less than 7% of the Tencent MAU to 33%. Tencent is sitting on a huge traffic empire, and users are growing slowly, or it can be said that there is basically no growth.

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The more obvious headline threats are in the battle for user time. Regardless of how irresistible the app is, the user’s attention on the mobile side is basically fixed. At this time, the rules of the game are that who can grab more users and have more opportunities to monetize.

The length of users of today’s headlines and vibrato has been growing, and the user’s length of Tencent is being squeezed. From March last year to June this year, the market share of Tencent declined by 5.2%, while the bytebeat system increased by 3.5%.