Tada Images – stock.adobe.com
On March 23, Tencent released its fourth-quarter and full-year performance report for 2021. Tencent reached record high R&D investment levels, with an increase of 33% YoY for the year, totalling 51.88 billion yuan ($8.14 billion).
However, Tencent’s net profit also saw a 25% YoY decrease in Q4, coming off the back of a net profit decline for the last two quarters. In total, Tencent’s net profit for the full fiscal year hit 123.79 billion yuan ($19.43 billion), an increase of 1% YoY, the lowest increase in net profit recorded in the last decade.
Despite short-term performance pressure, the financial results show Tencent’s continuing investment in strategic business and scientific and technological innovation, improving the independent ability of R&D and building a complete R&D ecology.
According to the financial report, Tencent’s financial technology and enterprise services sector performed the best, with Q4 revenue of 47.96 billion yuan ($7.53 billion), a 25% YoY increase. The sector’s share of total revenue rose to 33%, surpassing the gaming sector for the first time.
Relying on the ability of scientific and technological innovation and long-term investment in the field of new digital infrastructure, the integration of the company’s digital and real economy has continued to accelerate. The economic income the service side is emerging as Tencent’s new growth engine, accelerating the company’s transition from the digital economy to the real economy.
Since 2018, Tencent has actively invested in digital infrastructure and established cutting-edge science and technology laboratories in areas such as artificial intelligence, robotics, quantum computing, 5G, edge computing, and multimedia technologies. Over the last three years, Tencent has invested more than 120 billion yuan ($18.83 billion) in R&D.
