2024.0410

Number of words in this article:1684, reading time is about 3 minutes

introduction：腾讯董事会主席兼首席执行官马化腾、腾讯总裁刘炽平去年酬金分别为4292.3万元和5247.8万元。

** Author| ** First Finance Zheng Xutong

On the evening of April 8, Tencent Holdings released a full version of its 2023 financial report, adding some information compared with the previously announced full-year results. In terms of shareholder shareholding, the financial report shows that at the end of 2023, Naspers Limited, Tencent's major shareholder in South Africa, held 2.367 billion shares of Tencent through MIH Internet Holdings B.V. controlled by Prosus, a decrease of 210 million shares compared with the previous year, and the shareholding ratio dropped from 2022. 26.93% at the end of 2023. While major shareholders reduced their holdings, Tencent spent HK$49.43 billion to repurchase 152 million shares last year.

In addition, the financial report also disclosed the remuneration of directors and some managers. Ma Huateng, Chairman and CEO of Tencent, and Liu Chiping, President of Tencent, were 42.923 million yuan and 52.478 million yuan respectively last year, increasing and decreasing year-on-year.

The reduction of holdings by major shareholders may exceed HK$60 billion

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On December 29, 2023, Tencent's share price was 293.6 Hong Kong dollars/share, and its share price fell by 6.79% in 2023. Based on HK$300 per share, Naspers Limited reduced its holdings by more than HK$60 billion last year. As of the end of 2023, Naspers Limited still holds 2.367 billion shares of Tencent, ranking as the largest shareholder. Advance Data Services Limited, wholly owned by Ma Huateng, holds 8.49% of Tencent's shares, and the number of shares held remains unchanged.

Naspers reduced its stake in Tencent in 2018 and 2021. In 2018, Naspers reduced its holdings of 190 million shares of Tencent at a price of HK$405 per share after Tencent's share price climbed to a high level, accounting for approximately 2% of Tencent's issued shares. In 2021, Tencent's share price reached its highest point since listing, exceeding HK$700 per share during intraday trading in February of that year. In April 2021, Prosus, a subsidiary of Naspers, announced that it would sell up to 2% of its Tencent shares and promised not to reduce its holdings of Tencent shares within three years. After this reduction, Prosus's share of Tencent shares fell from 30.86% to 28.86%. After Naspers announced the reduction of Tencent's share price, Tencent's share price fluctuated and fell. In October 2022, the share price fell below HK$200/share.

In June 2022, Naspers broke its promise and decided to continue to reduce its shares in Tencent by a small amount for a certain period of time. The reason was that Prosus and Naspers planned to launch a share repurchase plan from their respective public shareholders, and the sale of Tencent shares was to raise funds needed for the repurchase.

While major shareholders reduce their holdings, Tencent has been buying back the company's shares every year since 2021, and its repurchase efforts have increased. In the comprehensive cash flow statement, Tencent spent 2.17 billion yuan on share repurchase in 2021, which increased to 29.307 billion yuan and 43.767 billion yuan in 2022 and 2023 respectively. The number of shares repurchased annually also increased from 5.5818 million shares in 2021 to 107 million shares in 2022 and 152 million shares in 2023. Share repurchase had a certain impact on the net cash flow used by Tencent's financing activities last year. Last year, this figure reached 82.57 billion yuan, a year-on-year increase of 37.7%. However, the cash flow from Tencent's operating activities also increased last year. At the end of last year, the company's cash and cash equivalents increased year-on-year.

Previously, Tencent announced that the repurchase scale will at least double in 2024 and will exceed HK$100 billion in 2024. At the media communication meeting after the release of the earnings report on March 20, Liu Chiping said that increasing repurchase efforts is the most beneficial plan for shareholders, especially when the stock price is undervalued. Tencent has the ability to continue to give back to shareholders.

Since the beginning of this year, Tencent has been buying back shares. In the first quarter of this year, Tencent repurchased a total of HK$14.8 billion in shares, with an average daily repurchase amount of HK$824 million. After releasing the full version of its 2023 financial report, on April 9, Tencent announced that it had bought back 3.28 million shares that day at a cost of HK$1.001 billion.

Senior management remuneration drops for first time in ten years

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The full version of the financial report also disclosed the remuneration of Tencent's directors and chief executive officers. Among them, Liu Chiping was the one with the most remuneration last year, with 52.478 million yuan, followed by Ma Huateng with 42.923 million yuan. Ma Huateng's remuneration last year increased by 4.229 million yuan year-on-year, an increase of 9.9%, mainly due to the increase in salary and bonuses. Liu Chiping's remuneration last year decreased by 135 million yuan year-on-year, a decrease of 72%, mainly due to the decrease in share-based remuneration expenses.

According to statistics from the First Financial Reporter, the remuneration of Tencent's senior managers has increased year after year from 259 million yuan in 2013 to 5.272 billion yuan in 2022, and decreased to 4.61 billion yuan in 2023, the first decline in ten years. From 2013 to 2023, the lowest remuneration for Ma Huateng and Liu Chiping was in 2013, which were 23.142 million yuan and 28.643 million yuan respectively, and the peak was in 2020, which were 58.738 million yuan and 428 million yuan respectively.

In terms of employee benefits expenditure, this figure has increased year after year from 10.364 billion yuan in 2013 to 111.182 billion yuan in 2022, and dropped to 107.675 billion yuan in 2023, the first decline in ten years. During the period, the number of Tencent employees increased year after year from 27,500 at the end of 2013 to 112,800 at the end of 2021. In 2022, it began to decline, decreasing to 108,400, and then decreasing to 10.54 at the end of 2023.

Tencent's financial report also disclosed the company's revenue and investments in different regions last year. Tencent's revenue from mainland China exceeded 90% last year. Last year, revenue from mainland China and other regions increased by 9.6% and 11.95% respectively. Tencent's operating assets in mainland China last year were 550.635 billion yuan, a year-on-year increase of 14.1%, and its operating assets in other regions were 324.947 billion yuan, a year-on-year increase of 17.8%. Last year, Tencent's investment in mainland China and Hong Kong was 393.836 billion yuan, down 29.8% year-on-year. Investment in North America, other regions of Asia, and Europe increased by 20.2%, 4.1%, and 39.9% respectively.

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