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MarketScreener Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Hong Kong Exchanges and Clearing Limited    0388   HK0388045442

HONG KONG EXCHANGES AND CLEARING LIMITED

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Hong Kong Exchanges and Clearing : ANNOUNCEMENT OF THE RESULTS FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2019

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08/14/2019 | 05:52am EDT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

ANNOUNCEMENT OF THE RESULTS

FOR THE THREE AND SIX MONTHS ENDED 30 JUNE 2019

The Board is pleased to announce the unaudited consolidated results of the Group for the three and six months ended 30 June 2019. These interim results have been reviewed by the Auditor in accordance with International Standard on Review Engagements 2410 "Review of interim financial information performed by the independent auditor of the entity" issued by the International Auditing and Assurance Standards Board, and by the Audit Committee.

FINANCIAL PERFORMANCE HIGHLIGHTS

Unaudited

Three months ended

Year-

Quarter-

30 June

30 June

on-year

31 March

on-quarter

2019

2018

change

2019

change

(RMB in millions, unless specified)

Revenues

88,821

73,675

21%

85,465

4%

Gross profit

39,126

34,446

14%

39,820

-2%

Operating profit

27,521

21,807

26%

36,742

-25%

Profit for the period

24,684

18,580

33%

27,856

-11%

Profit attributable to equity

holders of the Company

24,136

17,867

35%

27,210

-11%

Non-GAAP profit

attributable to equity

holders of the Company

23,525

19,716

19%

20,930

12%

EPS (RMB per share)

- basic

2.550

1.893

35%

2.877

-11%

- diluted

2.520

1.868

35%

2.844

-11%

Non-GAAP EPS

(RMB per share)

- basic

2.486

2.089

19%

2.213

12%

- diluted

2.456

2.062

19%

2.187

12%

1

Unaudited

Six months ended

Year-

30 June

30 June

on-year

2019

2018

change

(RMB in millions, unless specified)

Revenues

174,286

147,203

18%

Gross profit

78,946

71,488

10%

Operating profit

64,263

52,499

22%

Profit for the period

52,540

42,553

23%

Profit attributable to equity holders

of the Company

51,346

41,157

25%

Non-GAAP profit attributable to equity

holders of the Company

44,455

38,029

17%

EPS (RMB per share)

- basic

5.427

4.363

24%

- diluted

5.362

4.303

25%

Non-GAAP EPS (RMB per share)

- basic

4.699

4.031

17%

- diluted

4.643

3.976

17%

2

BUSINESS REVIEW AND OUTLOOK

1. Company Strategic Highlights

During the second quarter, we sustained solid user, revenue, and profit growth, and executed on key initiatives amid the challenging business environment. In recent months, we enhanced our products, extended our key platforms, and deepened our relationships with large and small partners. For example:

  • We accelerated our rate of innovation in games, successfully releasing new games in several different genres, introducing new modes within some of our key titles, and extending our season passes. Meanwhile, we continue to strengthen the Healthy Gameplay System for promoting balanced gameplay for young users.
  • We widened merchant acceptance for our mobile payment services, contributing to rapid growth in average transaction volume and in total payment volume, as well as ongoing growth in commercial payment users.
  • We extended and deepened our exclusive relationship with the National Basketball Association ("NBA"), the most-watched professional sports league in China, reinforcing our position as a leading digital entertainment platform.

Amid the evolving macro-economic and competitive challenges, we continue to invest in enhancing our platforms, services and technologies, for better supporting our users and enterprise customers.

2. Company Financial Performance

In the second quarter of 2019

Revenue increased by 21% year-on-year, primarily driven by commercial payment services and other FinTech services, smart phone games, and other digital content sales.

Operating profit increased by 26% year-on-year.Non-GAAP operating profit increased by 23% year-on-year.

Profit attributable to equity holders of the Company increased by 35% year-on-year.Non-GAAP profit attributable to equity holders of the Company increased by 19% year-on-year.

3

3. Company Business Highlights

Operating Information

As at

As at

Year-

As at

Quarter-

30 June

30 June

on-year

31 March

on-quarter

2019

2018

change

2019

change

(in millions, unless specified)

MAU of QQ

807.9

803.2

0.6%

823.0

-1.8%

Smart device MAU of QQ

706.7

708.6

-0.3%

700.4

0.9%

Combined MAU of Weixin

and WeChat

1,132.7

1,057.7

7.1%

1,111.7

1.9%

Smart device MAU of Qzone

553.5

542.7

2.0%

571.9

-3.2%

Fee-based VAS registered

subscriptions

168.9

153.9

9.7%

165.5

2.1%

Communication and Social

During the second quarter of 2019, combined MAU of Weixin and WeChat was 1,133 million, up 7% year-on-year. Smart device MAU of QQ was 707 million, broadly stable year-on-year.

Weixin Mini Programs ecosystem has become more vibrant, attracting more developers and service providers. The number of medium-to-long-tail Mini Programs has more than doubled year-on-year while the nature of Mini Programs has become more diversified. For example, content Mini Programs allow users to conveniently create, upload and share interesting videos, music and news within Weixin. More than a dozen content Mini Programs have attained over 1 million DAU. Key user metrics including time spent per user, daily messages and video uploads sustained solid year-on-year growth during the second quarter.

4

We launched a major version upgrade for Mobile QQ, which contributed to an increase in the number of daily messages and strengthened user engagement. To enrich the core chat experience, we enhanced functionalities for messages in different forms such as voice and video. To broaden user connections, we upgraded algorithms to recommend new friends based on common interests and shared contacts. We introduced QQ Mini Programs, with entertainment and games-related Mini Programs attaining particular popularity among QQ users.

Online Games

Total online games revenues increased 8% year-on-year to RMB27.3 billion.

Smart phone games revenues (including smart phone games revenues attributable to our social networks business) amounted to RMB22.2 billion, up 26% year-on-year due to the popularity of existing key titles and recent releases. Sequentially, smart phone games revenues were up 5% quarter-on-quarter as we launched more games following monetisation licence approval resumption, offsetting weak seasonality. During the quarter, we released 10 games including an in-house AR game, Catchya, and in-house RPGs, Fairy Tail and Raziel, compared with only one game in the first quarter. Honour of Kings revenue increased year-on-year. Perfect World Mobile, a licensed RPG that we launched in March, contributed substantially to our second quarter revenue. Our in-house tactical tournament game, Peacekeeper Elite, has exceeded 50 million DAU since its launch in May and begun monetisation with a successful season pass offering, although reported revenue was limited in the second quarter due to the deferral impact.

We are in the early stages of implementing season passes for several of our key titles, contributing to paying propensity within those games. Our data suggest that season pass spending is largely complementary to the existing item sales model, and also enhances player activity. In July, we released three smart phone games in different game genres, including racing game KartRider Rush, strategy game Game of Thrones: Winter is Coming, and RPG Dragon Raja. All three have achieved top 10 positions in the iOS Grossing Chart for games in China. Internationally, we expanded our user base via our hit title PUBG MOBILE (which has exceeded 50 million DAU) and new games such as Speed Drifter (the international version of QQ Speed) and Chess Rush.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

HKEx - Hong Kong Exchanges and Clearing Ltd. published this content on 14 August 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 August 2019 09:51:01 UTC

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Financials (HKD)
Sales 2019 16 670 M
EBIT 2019 11 513 M
Net income 2019 9 824 M
Finance 2019 60 704 M
Yield 2019 2,78%
P/E ratio 2019 32,1x
P/E ratio 2020 29,3x
EV / Sales2019 15,4x
EV / Sales2020 11,9x
Capitalization 317 B
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Mean consensus OUTPERFORM
Number of Analysts 17
Average target price 278,41  HKD
Last Close Price 252,40  HKD
Spread / Highest target 34,7%
Spread / Average Target 10,3%
Spread / Lowest Target -14,8%
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Managers
NameTitle
Charles Xiaojia Li CEO & Ex-Officio Executive Director
May Lung Cha Chairman
Chi Kin Tai Joint Chief Operating Officer & Head-Clearing
Kwok Keung Lee Joint Chief Operating Officer
John F. Killian Chief Financial Officer
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