毕业论文代写：Financial Analysis of Tencent

1.Introduction

1.1Introduction of Tencent

Tencent was founded in November 1998, whichis one of China's leading Internet value-added service providers. Since theestablishment of those years, Tencent has been adhering to the "all to customervalue" business philosophy, to provide quality services for all kinds ofstable billion users, always in a steady state of development. In June 17, 2003,Tencent Holdings Ltd was listed on the main board of the Hongkong StockExchange.

Become the most respected Internetcompanies are Tencent's vision. Tencent has been actively involved in publicwelfare undertakings, and strive to undertake corporate social responsibility,promote network civilization. In 2006, Tencent set up China's first InternetCharity Foundation - Tencent charity foundation, and the establishment of theTencent public service network. Adhering to the "dedicated to charity,love of youth development, promote corporate social responsibility, promotesocial harmony and progress" the purpose of the Tencent for each productand business are embracing public, open Internet, and advocate for allenterprises to act together, technology, communication advantage through theInternet field, "everyone can create new Ecological Welfare fromparticipation the Internet.

1.2Performance of Tencent

Value added services. The Tencent'svalue-added services revenue grew 37% to 2016 in the third quarter of RMB 27billion 975 million Yuan. 27% to 18 billion 166 million Yuan for the growth ofnetwork game income mainly reflected from our main intelligent mobile phonegame player to play and the role and contribution to the war, growth from ourmain PC game revenue. The Tencent's online advertising revenue grew 51% to 2016in the third quarter of RMB 7 billion 449 million Yuan. The effect ofadvertising revenue grew 83% to RMB 4 billion 368 million Yuan, mainly due tothe contribution from WeChat's circle of friends, our mobile terminal newsapplications and WeChat public account advertising revenue. Brand display 21%to 3 billion 81 million Yuan advertising revenue growth, mainly reflected fromthe mobile terminal platform  the positiveimpact of income growth and the Rio Olympics, it will be part of some flow ofinformation resources from the brand advertising form to offset the effect ofadvertising in the form of redistribution.

Share Price

Tencent enriches the lives of Internetusers. Every day, hundreds of millions of users through the online platform ofintegration of Tencent to communicate and share experiences, seeking access toinformation, entertainment and online shopping. Tencent diversified servicesinclude: instant communication tools QQ, WeChat mobile social communicationservices, social networking platform QQ space, the Tencent's QQ game platformgame, portal Tencent.com (QQ.com) and the electronic commerce platform.  

       Tencent's business model is a powerfulfree social software (QQ, WeChat) to attract a large user base (6-8 millionlevel), on the basis of value-added services and games to achieve monetization.Among them, the cornerstone of social Tencent Empire, Tencent is the basis ofall commercial. With this huge user stickiness, Tencent can expand therealization of a variety of forms, in the PC era, VAS (value added services)and the end of the tour is the main means. But WeChat development very well,the means of Tencent will be more abundant monetization. Can the overall profitmodel of Tencent simply summarized as with QQ IM software development centerchain, keep the user viscosity; at the same time, online games, wirelesscommunication and online advertising business departments to make full use ofthe huge user base money, nurturing QQ IM business department.

      From entertainment to the office, fromthe computer to the mobile platform, everywhere can see Tencent figure, alsoset up the Tencent "public enemy’s" image. For example, in theentertainment field of the storm, cool dog, cool, Sina blog, NetEase,micro-blog, Youku potatoes, grand game and so on; office areas of the NetEasecorporate email, Sogou input method, Google input method, thunder, chrome,Firefox, Baidu toolbar; news consulting field Sina, Sohu, Baidu encyclopedia,Wikipedia; the field of electronic commerce, pat Taobao, TenPay, Alipay, YiFubao, etc.. Talk about competition, we inevitably comes to the three giantsbattle, even with the big fourth Qihoo 360. The past three giants in social,electricity providers, Search Company, but the Tencent and mobile Internet era,Ali has begun to confrontation, WeChat may pose a threat to Ali, Taobao and Alipay.From the advantages and disadvantages of the three terms, Tencent specializesin making products; Ali is good at doing business, Baidu stronger thantechnology.

2.Economic analysis

2.1Market

      With the growing number of Internetusers in China, a large number of demands have been created. At the same time,China's Internet industry business model matures. Online advertising, searchengine, e-commerce, online payment business is gradually accepted by people,the major Internet penetration from their core areas of advantage to theseaspects, the formation of orderly competition, promote the benign developmentof the Internet industry. China's network infrastructure, the development of 3GInternet, national policy support planning, the entire Internet industry hascreated a very good prospect.

       Compared with Ali, Baidu in the mobileInternet to accelerate mergers and acquisitions, Tencent has a naturaladvantage in the mobile Internet; WeChat has been tight in the first thronemobile social media, and in the establishment of an independent WeChat group,to accelerate the development of the mobile internet. At the same time involvedin mobile payments, finance, games, maps, electricity providers and many otherareas of life services, to build a new social media as the core of theecosystem.

2.2Countries in which the company operates

     The development of an enterprise isaffected by many factors. Macroeconomic factors mainly refer to the strategicstage of the host country's economic development and the level of developmentstrategy, economic system and market system, income level, budget, trade andinternational payments, etc... The factors included in the macroeconomic environment,reflected in the following aspects: strategic stage of economic development anddevelopment strategic level. Economic system and market system are both veryimportant. Budget scale and the balance of payments situation should bere-examined. Trade and international balance of payments also should bere-examined. With Chinese joined WTO, in the impact of foreign technology andcapital of the Tencent, on the basis of the situation, the industrymacroeconomic environment situation, according to local conditions, formulatethe strategic plan for the development of the macroeconomic environment and thesuitable development strategy, improve the competitiveness of enterprises, inan invincible position in the fierce competition in the market. Regulatory factorson the development of enterprises also have a profound impact. Tencent’sperformance is very good in this field.

3.Financial analysis

2015  Tencent’s expression

It is can be seen from the financialstatements released by Tencent. The Tencent’s gross profit ration is 2.3% ended31 December 2015 wasRMB28,806 million. The Tencent’s operating ration is 2.3%, SinceTencent began to get involved in e-commerce business, investment and mergerrelated company has technical advantage or to expand the open platform, whichmakes the change of profit model, thereby affecting the asset structure,leading to the Tencent's overall financial index fell to varying degrees allaspects of both the specific performance of the asset liability ratio increasedto the highest 49%; the total assets turnover rate decreased year by year inthe past three years; reduce the sales net profit rate, net assets and netinterest rates interest rates year by year in varying degrees; the rate ofgrowth in total income and gross profit rate also decreased more obviously thanbefore. In 2014, total revenue of 103 billion 900 million Yuan ($16 billion 850million), an increase of 30% over the same period last year.

The Tencent’s current ration is 1.25%.and the Tencent’s quick ration got the same ratio as current ration. All of usknow that current ratio and quick ratio stands for the risk of  company. Tencent will be face futureproblems. Credit risk and liquidity risk restricts the development of Tencent.

2015  Tencent’s expression

The Tencent’s capital gearing ration is9.57%. The Tencent’s debt/equity ration is10.58%. The Tencent’s return oncapital employed is 15.79%;The Tencent’s Return on total assets is 9.39%; The Tencent’sdividend yield is 0.19%; The Tencent’s dividend per share is 0.47%.

The Tencent’s audited profitattributable to equity holders of the Company for the yea, an increase of 21%compared with the results for the previous year. Basic and diluted earnings persharefor the year ended 31 December 2015 were RMB3.097 and RMB3.055respectively.

The Tencent’s non-GAAP profitattributable to equity holders of the Company for the year ended 31 December2015 wasRMB32,410 million, an increase of 31% compared with the resultsfor the previous year. Non-GAAP basic and diluted EPS for the year ended 31December 2015 were RMB3.485 and RMB3.437 respectively.

In 2015, Tencent online advertisingbusiness achieved 110% year-on-year revenue growth, mainly reflecting anenlarged advertiser base and more traffic on our platforms. Over 65% of ourtotal advertising revenues were generated on mobile platforms during the year. Revenuesincreased by 30% to RMB102.9 billion. Excluding the e-commerce business,revenues increased by 38% to RMB102.2 billion.

From the Tencent financial statementscan be found listed since 2004 to 2015, the Tencent with its excellent assetlight profit model to create great value, embodied in the asset liability ratiois lower, the average was 23%; the total assets turnover rate increased everyyear; sales net profit rate increased year by year, total assets net profitmargin remained at 42%; the highest reached 38%; net interest rates increasedyear by year, up to 54%; the total income of each year with an average of 62.3%growth rate of rapid growth; the gross margin also maintained an average growthrate of 65.75%. However, since 2012 to 2015, the Tencent  began to get involved in e-commerce business,investment and merger related company has technical advantage or to expand theopen platform, which makes the change of profit model, thereby affecting theasset structure, leading to the Tencent's overall financial indicators all havedifferent degrees of decline, the specific performance for the highest rates ofassets and liabilities increased to 49%; the total assets turnover ratedecreased year by year in the past three years; reduce the sales net profit rate,net assets and net interest rates interest rates year by year in varyingdegrees; the rate of growth in total income and gross margin also decreasedmore obviously than before.

From 2004 to 2015 with the Tencent'sbalance sheet, found that the assets structure of Tencent, current assets tototal assets ratio showed typical changes from 2004 to 2011, this ratioremained at 70% plus or minus 2013, 2014、2015years, but this ratio declined greatly, were less than 50%. Compare the changeof Tencent assets based on the structure, we can see the light in the assetprofit model under financial condition: ample cash reserves, the ratio ofnearly ten years of cash reserves total assets floating in 62%, 2014 cashreserves declined, mainly is the Tencent with 24 billion 685 million Yuancapital to buy long-term equity investment and for the sale of financialassets. Tencent in 2011, mainly to provide Internet value-added services, itsinventory of low value consumption of gifts, has always been in control of 0.5%of total assets, since 2011, the Tencent began to engage in e-commercebusiness, stock exchange constitutes the main e-commerce need goods, its totalassets compared to the previous increase, reaching 1.3% in 2013. Accountsreceivable accounted for the proportion of total assets is very low, accountingfor nearly three years accounted for less than 5% of the control; theproportion of fixed assets is low, from 2013 to 2015, from 2013 to 2015, theaverage fixed assets accounted for about 10% of total assets.  

     The asset structure of the Tencent fornearly ten years of analysis, the Tencent profit pattern is undergoingadjustments and changes, the Internet industry with fierce competition andTencent strategic adjustments are closely linked. At the same time, it alsoreflects a huge challenge faced by Internet companies in the ever-changingenvironment. As is known to all Tencent is the Internet industry giants, butTencent's main business, Internet value-added services has been a bottleneck,Tencent must seek new profit model to increase profits. Tencent profit modelgradually to diversify the direction of development, through the distributionof assets structure can be seen, the Tencent in 2011 to 2013 profit pattern adjustments mainly in two aspects; thefirst is the electronic commerce; the second is investment and mergers. Tencentin 2012 to carry out e-commerce business, learned from the company's financialreport, its cost in 2013 and 2014 were 4 billion 193 million Yuan and 9 billion239 million Yuan, but this year the gross profit margin of only 5.5%, which isthe leading cause of Tencent in recent years the rate of growth in total incomeand gross margin decline. From 2013 onwards the Tencent has invested mergerefforts, has acquired the development of diversified industrial company andpart of online games, online travel, software development, electronic commerce,television media, search engines and other related technical advantages ofenterprises to enhance their competitiveness.

                                                                   TencentRevenues

                                                   Comparing the income of Tencent

4.Future prospect

      In recent years, Tencent for ChinaMobile (micro-blog) has contributed to the development of the Internet and ahealthy "Internet plus" ecological. QQ and WeChat social platformscontinue to improve their services, innovation, and consolidate their status asChina's most popular social applications. Tencent lead the industry, try anumber of new types of mobile games, and promote the development of interactiveentertainment industry. Tencent has invested heavily in digital music, videoand literature services to support the rapid development of the contentindustry. Tencent launched a new form of social advertising, technology to helpadvertisers reach up to Internet users, while promoting the rapid growth of theeffectiveness of Tencent advertising revenue. Tencent has also expanded themobile payment services to provide more convenience for users and businesses.In the future, the Tencent will as in the past to perform the"connection" strategy, through its own platform leading enterprisesinvested in Tencent, and vertical cooperation, continue to provide users withhigh-quality experience, cultivate a rich "Internet plus"ecosystem."

5.Conclusion

     From the above analysis, since Tencentbegan to get involved in e-commerce business, its profitability has beenreduced, but from the overall situation, its profitability is still strong.According to the above and financial analysis, we can see that although themomentum of the development of Tencent has slowed, its stable to maintain ahigh level of industry, Tencent's future development potential is well.

     In general, Tencent as a company withexcellent  culture and innovationcapability of the giant China Internet Corporation, enterprise competitiveness,the business diversification, synergy independent are to provide one-stoponline life service objectives. In the social macro environment for thedevelopment of a good situation, the Tencent continues to rely on their owninnovation ability of seizing an opportunity and achieve the business steadyand rapid growth, creating a China Internet community a business miracle, goodbusiness case analysis. Analysis of the market environment, the Tencentdevelopment trend is good, dominant, but still faces some challenges such asthe competition within the industry and the Internet industry updaterequirements; analysis of the prospect of Tencent in today's mobile Internettrends in accurate positioning, pay attention to the needs of users,personality innovation to maintain business chain stable and rapid growth. Withlife, the Tencent with instant messaging tools QQ, WeChat as a platform toexpand its business, most notably WeChat communications products, emerged fromthe user activity has surged, greatly surpass the QQ definition of newcommunication tools trend, the corresponding product development business isalso popular and lead the market by users. Tencent is expected to seek theintegration of new instant messaging services on WeChat products and make itplay a greater role. In short, the advantages of Tencent  is obvious、promising.

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