Tencent Holdings Limited

Thank you for standing by and welcome to the Tencent Holdings Limited 2020 Second Quarter and Internal Results Announcement Conference Call. At this time, all participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask questions, you will need to press star 1 on your telephone to join the question queue. Your name will be announced when it is your turn to ask a question. If you wish to cancel your question, please press the pound or hash key. I must advise you that this conference is being recorded today. I would now like to hand the conference over to your host today, Ms. Wendy Huang from Tencent. Please go ahead, Ms. Huang. Thank you.

Good evening. Welcome to our 2020 second quarter and interim results conference call. I'm Wendy Huang from Tencent IR team. Before we start the presentation, we would like to remind you that it includes forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about the general market conditions is coming from a variety of sources outside of Tencent. This presentation also contains some unaudited and non-IFRS financial measures, that should be considered in addition to but not as a substitute for measures of the company's financial performance propelled in accordance with IFRS. Non-IFRS measures are intended to reflect our core earnings by excluding certain one-time and or non-cash items. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website. Let me introduce the management team on the call tonight. Our Chairman and CEO, Pony Ma, will kick off with a short overview. President Martin Lau and Chief Strategy Officer James Mitchell will provide a business overview. Chief Financial Officer John Lowe will conclude with financial review before we open the floor for questions. I will now turn the call over to Pony.

Thank you, Wendy. Good evening. Thanks everyone for joining us today. Since the beginning of this year, the COVID-19 pandemic has threatened the world, disrupting our daily work and life routines. During this challenging time, we utilize our platforms and technologies to help users adapt to the new normal via online tools to support enterprises in conducting digital upgrades and to broadly contribute to economic recovery. And now I will highlight the result we achieved in the second quarter of 2020. Total revenue was 115 billion RMB, up 29% year-on-year and 6% quarter-on-quarter. Gross profit was 53 billion RMB, up 36% year-on-year and 1% quarter-on-quarter. Our non-IFRS operating profit was 38 billion RMB, up 38% year-on-year and 6% quarter-on-quarter. Non-IFRS net profit attributable to equity holders was 30 billion RMB, up 28% year-on-year and 11% quarter-on-quarter. Moving to our online platform, in social, combined MAU of WeChat and WeChat increased 6% year-on-year to 1.21 billion. Just for those who may not be familiar with the distinction between WeChat and WeChat, There are two different products. WeChat is a chat tool that serves users in the mainland of China, whereas WeChat is a sister product which serves users outside of the mainland of China. Smart devices MAU of QQ was $648 million. In games, we extend our leadership via extended popularity of established franchises and success of new releases in both China and international markets. In media, video and music subscriptions increase as we release the top-tier content and add songs to the pay library. In fintech, commercial payment transactions resume growth in our Wealth Management Platform extend its aggregate customer assets. Leveraging our broad user base, we assist the SMEs digital upgrades and contribute to economic recovery. In cloud, we sign up a large contract in key verticals and capture opportunities in emerging sectors. In utilities, we maintain our industry in mobile security, mobile browser, and Android apps in China. I will invite Martin and James to discuss the business review.