2025-03-19 Tencent Holdings Limited (TCEHY) Q4 2024 Earnings Call Transcript

Tencent Holdings Limited (OTCPK:TCEHY) Q4 2024 Earnings Conference Call March 19, 2025 8:00 AM ET

Company Participants

Wendy Huang - IR

Pony Ma - Chairman & CEO

Martin Lau - President

James Mitchell - Chief Strategy Officer

John Lo - CFO

Conference Call Participants

Kenneth Fong - UBS

Alicia Yap - Citibank

Jialong Shi - Nomura

Ronald Keung - Goldman Sachs

Alex Yao - JPMorgan

John Choi - Daiwa

Thomas Chong - Jefferies

Yuan Liao - CITIC Securities

Wendy Huang

Good day, and good evening. Thank you for standing by. Welcome to Tencent Holdings Limited 2024 Fourth Quarter and Annual Results Announcement Webinar. I'm Wendy Huang from Tencent IR team. At this time, all participants are in a listen-only mode. After the managements presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today's webinar is being recorded.

大家好，晚上好。感谢您的耐心等待。欢迎参加腾讯控股有限公司2024年第四季度及全年业绩发布网络研讨会。我是腾讯投资者关系团队的Wendy Huang。现所有与会者均处于仅听模式。管理层报告后将进行问答环节。[操作提示] 请注意，今天的网络研讨会正在录制中。

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 general market conditions is coming from a variety of sources outside of Tencent.

在开始报告之前，我们提醒您，报告中包含前瞻性声明，这些声明受多种风险和不确定因素的影响，并因各种原因可能无法在未来实现。有关一般市场状况的信息来自腾讯之外的多个渠道。

This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, measures of the group's financial performance prepared in accordance with IFRS. For a detailed discussion of risk factors and non-IFRS measures, please refer to our disclosure documents on the IR section of our website.

本次报告还包含一些未经审计的非国际财务报告准则（IFRS）财务指标，应作为补充考虑，而非替代依据按照IFRS编制的集团财务业绩指标。关于风险因素和非IFRS指标的详细讨论，请参阅我们网站投资者关系部分的披露文件。

Now let me introduce the management team on webinar tonight. Our Chairman and CEO, Pony Ma will kick off with a short overview; President, Martin Lau will provide an update on our AI initiatives; Chief Strategy Officer, James Mitchell will provide a business review; and Chief Financial Officer, John Lo will conclude with financial discussion before we open the floor for questions.

现在请允许我介绍今晚网络研讨会的管理团队。我们的董事长兼首席执行官马化腾将做简短概述；总裁刘炽平将介绍我们的人工智能项目进展；首席战略官James Mitchell将进行业务回顾；首席财务官罗宇则将在问答环节前进行财务讨论。

I will now pass it to Pony.

现在我把时间交给马化腾。

Pony Ma

马化腾

Thank you, Wendy. Good evening. Thank you, everyone for joining us. In 2024, we reinforces the long term franchise value of our key services. In Weixin, we're strengthening our transaction capabilities with the launch of Mini Shops and upgrades for Weixin Search.

谢谢Wendy。晚上好，感谢大家的参加。2024年，我们进一步巩固了关键服务的长期品牌价值。在微信平台上，我们通过推出“微店”和对微信搜索的升级，强化了交易能力。

Video accounts' user time spent grew rapidly on enhanced documentation algorithms. Our evergreen game portfolio increased from 12 games in 2023 to 14 in 2024, and we nurtured new games with the evergreen potential. Three of Tencent Video's drama series rank among the industry's top five in 2024, while Tencent Music extend its industry leadership with, 121 million subscribers.

视频账号的用户停留时间在改进的推荐算法推动下迅速增长。我们的长青游戏产品组合从2023年的12款增加到了2024年的14款，同时我们也培育了具备长青潜力的新游戏。腾讯视频的三部剧集在2024年跻身业内前五，而腾讯音乐以1.21亿订阅用户巩固了其行业领导地位。

Our marketing services revenue growth outperforms the industry, as we upgrade our advertising technology platform and increase user traffic. In fintech, we upgrade our risk controlled and optimize payment funding cost, strengthening our overall fintech franchise and profitability. On AI, we Advanced the HunYuan capabilities, deployed AI for internal AI use cases, and prepare for breakout growth in consumer AI use cases.

我们的营销服务收入增长超越了行业水平，因为我们升级了广告技术平台并增加了用户流量。在金融科技方面，我们提升了风险管控并优化了支付资金成本，强化了整体金融科技业务及盈利能力。在人工智能领域，我们提升了混元能力，部署了面向内部的AI应用，并为消费者AI应用的爆发式增长做好了准备。

Financially, our revenue growth rate improved during 2024, hitting double-digit growth in the fourth quarter. Our growth and operating profit grew faster than our revenues, as we shifted towards high quality revenue streams. We are focused (ph) on delivering shareholders' return, paying out HKD32 billion in cash dividends and repurchasing HKD112 billion worth of our shares during the year.

从财务上看，我们2024年的收入增长率得到了提升，第四季度实现了两位数的增长。我们的增长和营业利润增速快于收入增速，因为我们正向高质量收入渠道转型。我们专注于为股东创造回报，全年派发现金股息320亿港元，并回购价值1120亿港元的自家股票。

Looking at our financial Numbers for the fourth quarter. Total revenue was RMB172 billion, up 11% year-on-year. Gross profit was RMB91 billion, up 17% year-on-year. Non-IFRS operating profit was RMB59 billion, up 21% year-on-year, and non-IFRS net profit attributable to equity holders was RMB55 billion, up 30% year-on-year.

看看我们第四季度的财务数据：总收入为1720亿元人民币，同比增长11%；毛利润为910亿元人民币，同比增长17%；非IFRS营业利润为590亿元人民币，同比增长21%；非IFRS归属于股东的净利润为550亿元人民币，同比增长30%。

Now, I will hand over to Martin.

现在，我将时间交给刘炽平。

Martin Lau

Thank you, Pony, and good evening, good morning to everybody. In my section, I will talk about our initiatives in terms of investing in AI for growth, and I will summarize our AI initiatives and how we're investing in AI as both a growth multiplier for our existing businesses and as a new growth driver and these include the progress we've made with our self-developed HunYuan Foundation Model, our multimodal strategy to provide the best AI experience to users, the integration of AI into our enterprise facing services, how we're unlocking the growth potential of existing businesses with AI, and finally, our stepped up investment into AI for future.

感谢马化腾，也晚上好、早上好，大家好。在我的部分，我将谈谈我们在投资人工智能以推动增长方面的举措，总结我们的AI战略以及我们如何将AI作为现有业务的增长倍增器和新增长驱动力进行投资，这些包括我们自研的混元基础模型取得的进展、我们提供最佳AI体验的多模态战略、将AI融入面向企业的服务、如何通过AI释放现有业务的增长潜力，以及我们对未来加大在AI上的投资。

Moving on to the first topic. Our AI initiatives really trace back to 2016 when we first established our AI lab. Since 2023, early part of that, we have been investing heavily in our proprietary HunYuan Foundation Model, which forms an important technology foundation for our consumer and enterprise facing businesses and will serve as a growth multiplier for us in the long run. Our investments in HunYuan enable us to develop end-to-end foundation model capabilities in terms of infrastructure, algorithm, training, alignment and data management, and also to tailor solutions for the different needs of internal and external use cases.

进入第一个话题。我们的AI举措可以追溯到2016年，当时我们首次建立了AI实验室。从2023年初开始，我们就开始大力投资于自有的混元基础模型，这构成了我们面向消费者和企业业务的重要技术基础，并将在长期内成为我们的增长倍增器。我们对混元的投资使我们能够在基础设施、算法、训练、对齐和数据管理等方面开发端到端的基础模型能力，同时为内部和外部不同场景的需求定制解决方案。

In terms of milestones, we are an early adopter of new techniques in Core LLM, including the mixture of expert architecture in March 2024, the Heterogeneous MoE-based HunYuan Turbo in September 2024 and the Hybrid-Mamba-Transformer MoE-based Turbo S model in February 2025. Unlike conventional transformer models that face limitation in context length, our current Turbo S LLM increases the efficiency in handling long sequence through Mamba optimization. We also released our HunYuan T1 deep thinking model in February 2025, which is among the first long chain of thought models in China, delivering performance comparable to top tier models.

在里程碑方面，我们是核心大语言模型新技术的早期采用者，包括2024年3月推出的专家混合架构、2024年9月基于异构MoE的混元Turbo，以及2025年2月推出的基于混合Mamba-Transformer MoE架构的Turbo S模型。与传统的Transformer模型在上下文长度上的限制不同，我们现有的Turbo S大语言模型通过Mamba优化提高了处理长序列的效率。我们还于2025年2月发布了混元T1深度思考模型，该模型是中国首批长链思维模型之一，其性能可与顶级模型媲美。

In addition to LLMs, we've released a multi-model HunYuan Foundation Model with capabilities that span across image, video and 3D generation. HunYuan's image generation models achieved the highest score from FlagEval in December of last year. In video generation, our model excels in video output quality and ranked first on Hugging Face in December of last year.

除了大语言模型之外，我们还发布了多模态的混元基础模型，具备涵盖图像、视频和3D生成的能力。混元的图像生成模型在去年12月获得了FlagEval的最高分。在视频生成方面，我们的模型在视频输出质量上表现出色，并在去年12月于Hugging Face排名第一。

And our 3D Generation model was the industry's first open-source model supporting text and image to 3D generation. In addition to that, we also contribute to the open-source community actively and have open-sourced a series of advanced models in the HunYuan family for 3D generation, video generation, large language and image generation. Several of these models have gained great popularity among developers worldwide.

而我们的3D生成模型是业内首个支持文本和图像转3D生成的开源模型。除此之外，我们还积极为开源社区做出贡献，并已开源了一系列混元家族的先进模型，包括3D生成、视频生成、大语言模型和图像生成。这些模型中的几款在全球开发者中广受欢迎。

Now going to our consumer facing AI products. We adopt a multimodal strategy to provide the best AI experience to our users, so we can leverage all available models to serve different user needs. We need this because different AI models are optimized for different capabilities, performance metrics and use cases, and a combination of various models can handle complex tasks better than a single model. Our experience in software businesses such as online games also demonstrates that there are synergies in being a developer and an operator.

接下来谈谈我们面向消费者的AI产品。我们采用多模态战略，为用户提供最佳的AI体验，这样我们就可以利用所有可用模型满足不同用户的需求。我们需要这样做，因为不同的AI模型在能力、性能指标和应用场景上各有优化，而多种模型的组合比单一模型更能处理复杂任务。我们在在线游戏等软件业务中的经验也表明，开发者和运营者之间存在协同效应。

By investing in our own foundation models, we're able to fully leverage our proprietary data to tailor solutions to meet customized internal and customer needs. While at the same time, making use of external models, allowed us to benefit from innovations across the industry. On the product front, our AI native application Yuanbao provides access to multiple models including Chain of Thought reasoning models such as HunYuan T1 and DeepSeek-R1 and fast thinking model HunYuan Turbo S with the option of integrating web search results.

通过投资我们自己的基础模型，我们能够充分利用专有数据来定制解决方案，以满足内部和客户的个性化需求。同时，利用外部模型使我们能从全行业的创新中受益。在产品方面，我们的AI原生应用“元宝”为用户提供了多种模型的接入，包括混元T1和DeepSeek-R1这样的链式思维推理模型以及快速思考模型混元Turbo S，并提供了整合网络搜索结果的选项。

Yuanbao's search results can directly access high quality proprietary content from Tencent ecosystem, such as official accounts and video accounts. By leveraging HunYuan's multimodal capabilities, Yuanbao can process prompts in images, voice and documents in addition to text. Our cloud infrastructure supports stable and uncapped access to leading models.

“元宝”的搜索结果可以直接获取来自腾讯生态系统的高质量专有内容，例如公众号和视频号。通过利用混元的多模态能力，“元宝”除了处理文本外，还能处理图像、语音和文档中的提示。我们的云基础设施支持对领先模型的稳定且无限制的访问。

From February to March, Yuanbao's DAU increased 20-fold to become the third highest AI native mobile application in China by DAU. In addition to that, we have also started testing AI features in Weixin to enhance user experience such as for search, language input and content generation, and we will be adding more AI features in Weixin going forward.

从2月至3月，“元宝”的日活跃用户数增长了20倍，成为中国第三大AI原生移动应用。此外，我们还开始在微信中测试AI功能，以提升用户体验，例如搜索、语言输入和内容生成，未来我们将为微信增添更多AI功能。

Now moving on to the enterprise-facing side. We have been accelerating AI integration into our cloud business across our infrastructure, platform and software-as-a-service solutions. Through our infrastructure as a service AI solutions, enterprise customers can achieve high performance AI training and inference capabilities at scale and developers can access and deploy mainstream foundation models.

现在转向面向企业的一面。我们正加速将AI整合到我们的云业务中，覆盖基础设施、平台和软件即服务（SaaS）解决方案。通过我们的基础设施即服务的AI解决方案，企业客户能够实现大规模的高性能AI训练和推理能力，开发者也可以访问并部署主流基础模型。

For platform as a service pass, our TI Platform supports model fine-tuning and inference demands with flexibility. We'll provide powerful solutions supporting enterprise customers in customizing AI assistance using their own proprietary data and developers in generating mini programs and mobile applications through natural language prompts.

在平台即服务方面，我们的TI平台支持灵活的模型微调和推理需求。我们将提供强大的解决方案，支持企业客户利用自有专有数据定制AI助手，并帮助开发者通过自然语言提示生成小程序和移动应用。

Our SaaS products increasingly benefit from AI powered tools. Real time transcription and meeting summarization functions in Tencent meeting gained significant popularity resulting in monthly active users for these AI functions doubling year-on-year to 15 million. Tencent Docs also enhanced user productivity in content generation and processing.

我们的SaaS产品越来越多地受益于AI驱动的工具。腾讯会议中的实时转录和会议摘要功能广受欢迎，这些AI功能的月活跃用户同比翻倍达到1500万。腾讯文档也提升了用户在内容生成和处理方面的生产力。

In 2024, our AI cloud revenue approximately doubled year-on-year. Increased allocation of GPUs for internal use cases, initially for ad tech (ph) and foundation model training and more recently on AI inference for Yuanbao and Weixin has limited our provision of GPUs to external clients and thus constrained our cloud services revenue growth.

在2024年，我们的AI云收入同比大约翻了一番。内部用例中GPU分配的增加——最初用于广告技术和基础模型训练，最近用于“元宝”和微信的AI推理——限制了我们向外部客户提供GPU的能力，从而对云服务收入增长构成了一定约束。

For external workloads, we have prioritized available GPUs toward high value use cases and clients. Since the fourth quarter of 2024, we have stepped up our purchase of GPUs and as we deploy these GPUs, we expect to accelerate the revenue growth of our overall cloud services.

对于外部工作负载，我们将可用GPU优先分配给高价值用例和客户。自2024年第四季度以来，我们加大了GPU采购力度，并随着这些GPU的部署，我们预计将加速整体云服务收入的增长。

Now moving on to our existing businesses. We believe our investment in AI has already been generating positive returns for us and I will give you three examples on how AI is empowering our existing products and businesses and generating return. For advertising, we enhanced our advertising system with neural network AI capabilities since 2015.

现在转向我们的现有业务。我们相信在AI方面的投资已经为我们带来了正面的回报，我将举三个例子说明AI如何赋能我们的现有产品和业务并创造回报。对于广告业务，自2015年以来，我们通过神经网络AI能力提升了广告系统。

We rebuilt ad tech platform using large model capabilities since 2020, enabling long sequence user behavior analysis across multiple properties, which resulted in increased user engagement and higher click through rates. Since 2023, we have been adding large language model capabilities to facilitate more efficient approvals of ad content to better understand merchandise categories and users' commercial intent for more precise ad targeting and to provide generative AI tools for advertisers to streamline the ad create process, leveraging AI powered ad targeting capabilities and generative AI ad creative solutions.

自2020年以来，我们利用大模型能力重构了广告技术平台，实现了跨多个平台的长序列用户行为分析，从而提升了用户参与度和点击率。自2023年以来，我们不断加入大语言模型能力，以便更高效地审批广告内容，更好地理解商品类别和用户的商业意图，从而实现更精准的广告定向，并为广告主提供生成式AI工具以简化广告创作流程，利用AI驱动的广告定向能力和生成式AI广告创意解决方案。

Our Marketing Services business is already a clear beneficiary of AI integration with revenue growth of 20% in 2024 amid challenging macro environment. In games, we adopted machine learning technology in our PvP games since 2017. We leveraged AI in games to optimize matching experience, improve game balance and facilitate AI coaching for new players, empowering our evergreen games strategy. Our games business is now integrating large language model capabilities to enhance 3D content production efficiency and to empower in-game chatbots.

我们的营销服务业务已显著受益于AI整合，在2024年面对严峻的宏观环境下实现了20%的收入增长。在游戏方面，我们自2017年以来在PVP游戏中采用了机器学习技术。我们利用AI来优化匹配体验、改善游戏平衡，并为新玩家提供AI辅导，从而推动了我们的长青游戏战略。我们的游戏业务现正整合大语言模型能力，以提升3D内容制作效率并赋能游戏内聊天机器人。

For our video and music services, we're leveraging AI to improve productivity and animation, live action video and music content creation. Our content recommendation algorithms are powered by AI and are proven effective in boosting content discovery. These initiatives enable us to better unlock the potential of our great content platforms.

对于我们的视频和音乐服务，我们正利用AI提升生产力、动画制作、真人视频和音乐内容创作。我们的内容推荐算法由AI驱动，并已被证明在提升内容发现方面非常有效。这些举措使我们能够更好地挖掘优质内容平台的潜力。

And finally, as the capabilities and benefits of AI become clearer, we have stepped up our AI investments to meet our internal business needs, train foundation models, and support searching demand for inference, we're experiencing from our users. To consolidate our resources around this all important AI effort, we have reorganized our AI teams to sharpen focus on both fast product innovation and deep model research.

最后，随着AI能力和效益变得更加清晰，我们加大了在AI方面的投资，以满足内部业务需求、训练基础模型，并支持用户对推理搜索需求的增长。为整合围绕这一重要AI工作的资源，我们已重组了AI团队，使其在快速产品创新和深度模型研究上更加聚焦。

Matching our stepped-up execution momentum and decision making velocity, we increased annual CapEx more than three-fold to $10.7 billion in 2024, equivalent to approximately 12% of our revenue with a notable uplift in fourth quarter of the year, as we bought more GPUs for both inference needs as well as for our cloud services. We intend to further increase our capital expenditures in 2025 and expect our CapEx to account for low-teens percentage of our revenue.

为配合我们加快的执行节奏和决策速度，2024年我们的年度资本支出增长了三倍以上，达到107亿美元，约占我们收入的12%，且在第四季度显著提升，因为我们购买了更多GPU以满足推理需求和云服务。我们计划在2025年进一步增加资本支出，预计其占收入比例将达到低两位数百分比。

In terms of R&D, we will continue to invest in our own models and to accelerate the development AI applications of each of our business groups. We're also investing in marketing to build user awareness and promote the adoption of new AI products such as Yuanbao. We believe these investments will generate good economic returns over time, but we also have the capacity to intention to continue returning capital to shareholders and we intend to buy back at least HKD80 billion worth of our stock in 2025.

在研发方面，我们将继续投资于自有模型，加速各业务群体的AI应用开发。我们还在市场营销上加大投入，以提升用户认知并推动新AI产品（如“元宝”）的采用。我们相信这些投资将随着时间产生良好的经济回报，同时我们也有能力并计划继续向股东返还资本，2025年计划回购至少800亿港元的股票。

So with that, I'll pass to James.

以上就是我的报告，现在我将时间交给James。

James Mitchell

Thank you, Martin and hello, everyone. For the fourth quarter, our total revenue returned to double-digit growth up 11% year-on-year. VAS represented 46% of our revenue within which the social network subsegment was 17%, domestic games 20%, and international games 9%. Marketing Services was 20% of our revenue, and FinTech and Business Services 33%.

感谢Martin，也感谢大家，大家好。就第四季度而言，我们的总收入恢复到了两位数增长，同比增长11%。其中，增值服务（VAS）占我们收入的46%，社交网络子板块占17%，国内游戏占20%，国际游戏占9%。营销服务占收入的20%，金融科技和商业服务占33%。

Our gross profit grew 17% year-on-year on increased contributions from high margin revenue streams such as Domestic Games, Video Accounts advertising and Weixin Search advertising, alongside cost efficiency from cloud services. By segment, VAS gross profit increased 19% year-on-year, representing 49% of our total gross profit. Marketing Services gross profit increased 19% year-on-year to contributing 22%, and FinTech and Business Services gross profit increased 11% contributing 29%.

我们的毛利润同比增长17%，这得益于来自高利润率收入渠道（如国内游戏、视频账号广告和微信搜索广告）的贡献增加，以及云服务成本效率的提升。从各部门来看，增值服务的毛利润同比增长19%，占总毛利润的49%；营销服务的毛利润同比增长19%，贡献了22%；而金融科技和商业服务的毛利润同比增长11%，贡献了29%。

For Value added Services segment revenue was RMB79 billion up 14% year-on-year. Social Networks revenue was up 6% driven by increased revenue from app based game item sales, music subscriptions and Mini Games platform service fees. Music subscription revenue increased 18% year-on-year as subscribers grew to 121 million. Tencent Music deepened cooperation with labels and artists and added super VIP privileges such as AI powered audio effect matching and collectible artists cards.

增值服务板块收入为人民币790亿元，同比增长14%。社交网络收入增长了6%，这主要得益于基于应用的游戏道具销售、音乐订阅和小游戏平台服务费收入的提升。随着订阅用户增至1.21亿，音乐订阅收入同比增长18%。腾讯音乐加深了与唱片公司和艺人的合作，并增加了超级VIP特权，如AI驱动的音效匹配和可收藏的艺人卡。

Long-form video subscription revenue increased 3% year-on-year with subscribers growing to 113 million. Our self-commissioned drama series Love Game in Eastern Fantasy was the most watched drama series across all online platforms in China in November. Domestic Games revenue grew 23% year-on-year against a low base quarter, driven by evergreen games, Honor of Kings, Peacekeeper Elite, VALORANT and also contributions from recently released games, DnF Mobile and Delta Force.

长视频订阅收入同比增长3%，订阅用户增至1.13亿。我们自制的剧集《东方幻想恋爱游戏》在11月成为中国所有在线平台中收视率最高的剧集。受长青游戏、《王者荣耀》、《和平精英》、《VALORANT》以及近期发布的游戏《地下城与勇士手游》和《三角洲部队》的推动，国内游戏收入同比增长了23%，基数较低。

International Games revenue increased 15% year-on-year, or 16% in constant currency terms on robust performances from Brawl Stars and PUBG MOBILE and the early access release of Path of Exile 2. For communications and social networks, Mini Shops, our platform for indexed and standardized merchandise is progressively adding features to stimulate new and repeat transactions.

国际游戏收入同比增长15%，或以固定汇率计算增长16%，这得益于《Brawl Stars》和《PUBG MOBILE》的强劲表现以及《流亡之路2》提前接入版的发布。在通讯与社交网络领域，微店——我们用于标准化商品展示的平台——正在逐步添加新功能，以刺激新交易和回头客交易。

For example, we introduced a gifting feature, which leverages Weixin social interactions and people's desire to gift each other fun or trendy items. This gifting feature has the benefit that gift recipients must fill in their delivery addresses, which builds out our delivery location graph, making future shopping transactions more convenient for consumers and future delivery more efficient for merchants.

例如，我们推出了赠礼功能，该功能利用微信社交互动以及人们互赠有趣或时尚物品的愿望。这一赠礼功能的好处在于，收礼人必须填写收货地址，从而构建起我们的配送位置图，使未来的购物交易对消费者更为便捷，对商家来说配送效率也更高。

Weixin Search continued to grow queries and revenue at rapid rates. We integrated Tencent HunYuan and DeepSeek large language model capabilities to enhance the relevance and quality of Weixin Search results and Tencent's own model powered results now cover over 90% of question based searches.

微信搜索继续以快速的速度增长查询量和收入。我们整合了腾讯混元和DeepSeek大语言模型的能力，以提升微信搜索结果的相关性和质量，腾讯自有模型驱动的结果现已覆盖90%以上的问题型搜索。

For Domestic Games, several of our evergreen games benefited in terms of DAU and monetization from IP collaborations and high profile events during the fourth quarter. Honor of Kings' gross receipts grew by a double-digit percentage year-on-year on higher DAU and popular outfits based on the anime series Detective Conan.

对于国内游戏而言，我们的多款长青游戏在第四季度受益于IP合作和高调活动，在日活跃用户和变现方面均有所提升。《王者荣耀》的毛收入因日活跃用户增加及基于动漫《名侦探柯南》的热门皮肤而实现了两位数的同比增长。

VALORANT gross receipts more than doubled on tie-ins with the world championship winning team, Edward Gaming, and with Riot's animated series, Arcane Season 2. Fight of the Golden Spatula's gross receipts grew by a double-digit percentage on Arcane-themed champions. We're seeking to nurture additional evergreen titles.

《VALORANT》的毛收入因与世界冠军队伍EDward Gaming及Riot的动画系列《Arcane Season 2》的联动而翻倍以上。《金铲之战》的毛收入在以《Arcane》为主题的英雄带动下同比增长了两位数。我们正寻求培育更多长青游戏。

For example, our recently released game Delta Force generated over RMB1 billion of gross receipts, from PC and mobile in China during the fourth quarter and our pipeline includes highly anticipated games such as the Hidden Ones, Light of Motiram, GODDESS OF VICTORY: NEW HOPE and VALORANT Mobile.

例如，我们最近发布的游戏《三角洲部队》在第四季度通过PC和移动平台在中国产生了超过10亿元人民币的毛收入，我们的产品线还包括备受期待的游戏，如《隐藏者》、《莫提拉之光》、《胜利女神：新希望》和《VALORANT Mobile》。

During this 2025 Spring Festival period a few weeks ago, our five highest grossing games each increased their DAU versus the 2024 Spring Festival period, demonstrating the health of the game industry and the vitality of our evergreen titles. DAU growth flowed from gameplay and social activity initiatives such as Peacekeeper Elite's Tang Dynasty-themed map, an Honor of Kings' Social Space featuring fireworks and selfie spots.

在几周前的2025年春节期间，我们收入最高的五款游戏的日活跃用户数均较2024年春节期间有所提升，这展示了游戏行业的健康状况以及我们长青游戏的活力。日活跃用户增长得益于如《和平精英》的唐朝主题地图、《王者荣耀》设有烟花和自拍点的社交空间等游戏玩法和社交活动举措。

Among our International Games, Brawl Stars from Supercell in Finland was the third highest mobile game by DAU industry wide outside China for 2024. Gross receipts grew several times year-on-year in the fourth quarter benefiting from the Angels vs. Demons season and redesigned battle pass.

在我们的国际游戏中，来自芬兰Supercell的《Brawl Stars》是2024年中国以外日活跃用户排名第三的移动游戏。受益于“天使对魔鬼”赛季和重新设计的战斗通行证，其毛收入在第四季度同比增长数倍。

Path of Exile 2 from our subsidiary Grinding Gear Games in New Zealand is a new action RPG for PC and console featuring an in-depth character development system. The game ranked first among premium games by revenue on Steam for six weeks following its early access release in December.

来自我们新西兰子公司Grinding Gear Games的《流亡之路2》是一款面向PC和主机的新动作角色扮演游戏，具有深入的角色成长系统。该游戏在12月提前接入发布后，在Steam平台上 premium 游戏收入排名连续六周位居第一。

Warframe, from our subsidiary, Digital Extremes in Canada, released a major update, Warframe 1999 in the fourth quarter, which boosted DAU and resulted in the game achieving the highest level of fourth quarter gross receipts in its 11 year history. For the full year 2024, Warframe's gross receipts increased over 30% year-on-year, also achieving a life to date record level.

来自我们加拿大子公司Digital Extremes的《Warframe》在第四季度发布了重大更新——《Warframe 1999》，这一更新提升了日活跃用户，并使该游戏在其11年历史上第四季度毛收入达到最高水平。2024年全年，《Warframe》的毛收入同比增长超过30%，也创下了历史新高。

For Marketing Services, revenue grew 17% to RMB35 billion in the fourth quarter, benefiting from higher user engagement and the ongoing AI upgrade of our advertising platform. Specifically, we enhanced our AI models to facilitate more holistic understanding of users' interests and of how users are responding to ads, enabling our system to make more relevant ad recommendations. Our Marketing Services revenue increased across most industries.

在营销服务方面，第四季度收入增长了17%，达到350亿元人民币，这得益于用户参与度的提高以及我们广告平台持续进行的AI升级。具体来说，我们优化了AI模型，以便更全面地理解用户兴趣及用户对广告的反应，使我们的系统能够提供更相关的广告推荐。营销服务收入在大多数行业均有所增长。

By inventory, Video Accounts Marketing Services revenue grew over 60% year-on-year on higher user engagement, the AI enhancements mentioned earlier and increased consumer transactions within Video Accounts resulting in more close loop e-commerce advertisements. Mini Programs Marketing Service revenue increased rapidly year-on-year and Weixin Search revenue more than doubled year-on-year on more commercial queries as well as AI optimized ad placements and ad formats, boosting click-through rates.

就细分而言，视频账号营销服务收入因用户参与度提升、前述AI升级以及视频账号内消费者交易增加而同比增长超过60%，从而带来更多闭环电商广告。小程序营销服务收入同比迅速增长，而微信搜索收入则因商业查询增多以及AI优化的广告投放和广告格式而同比翻倍，从而提升了点击率。

Looking at FinTech and Business Services, segment revenue was RMB56 billion in the fourth quarter, up 3% year-on-year. FinTech Services revenue resumed low-single digit year-on-year growth in the quarter, benefiting from improved commercial payment volumes and increases in wealth management and consumer loan services revenues. For commercial payments, revenue improved to largely stable year-on-year and the number of transactions grew faster year-on-year in the fourth quarter versus the third quarter.

从金融科技和商业服务来看，第四季度板块收入为560亿元人民币，同比增长3%。金融科技服务收入在本季度恢复了低个位数的同比增长，这得益于商业支付量的改善以及财富管理和消费贷款服务收入的增加。就商业支付而言，收入实现了基本稳定的同比改善，并且第四季度的交易数量较第三季度增长更快。

国内消费持续低迷。

Business Services revenue grew modestly year-on-year in the fourth quarter, benefiting from higher cloud services revenue and increased technology service fees generated from rising e-commerce transaction volumes. But, as Martin mentioned, allocating more GPUs to Tencent's own needs temporarily constrained the growth of cloud services revenue in the quarter. Business Services gross margin rose year-on-year due to improved efficiency.

商业服务收入在第四季度同比适度增长，这得益于云服务收入的提高以及由不断增长的电商交易量带来的技术服务费增加。但正如Martin提到的，将更多GPU分配给腾讯自身需求暂时限制了本季度云服务收入的增长。由于效率提升，商业服务的毛利率同比上升。

For WeCom, revenue more than doubled year-on-year as enterprises are increasingly willing to pay for advanced communication functionalities. And Tencent Meeting grew revenue over 40% year-on-year benefiting from increased enterprise adoption.

对于企业微信，收入同比增长超过一倍，因为企业对高级通信功能的支付意愿不断增强。而腾讯会议的收入同比增长超过40%，得益于企业采用率的提高。

With that, I'll pass to John.

以上就是我的报告，现在我将时间交给John。

John Lo

Thank you, James. Hello, everyone. For the fourth quarter of 2024, total revenue was RMB172.4 billion, up 11% year-on-year. Gross profit was RMB90.7 billion, up 17% year-on-year. Operating profit was RMB51.5 billion, up 24% year-on-year. Interest income was RMB3.9 billion, broadly stable year-on-year. Finance costs were RMB2.5 billion, down 29% year-on-year due to the exchange -- foreign exchange gain this quarter compared to losses in the same period last year.

谢谢，James。大家好。2024年第四季度，总收入为人民币1724亿元，同比增长11%。毛利润为人民币907亿元，同比增长17%。营业利润为人民币515亿元，同比增长24%。利息收入为人民币39亿元，同比基本持平。财务费用为人民币25亿元，同比下降29%，主要由于本季度外汇收益，而去年同期为外汇亏损。

Share profit of associates and JV was RMB9.3 billion compared to RMB2.4 billion in the same quarter last year. On an IFRS basis, share profit was RMB7.7 billion, up RMB4.5 billion in the same quarter last year, due to associate company-specific factors including business growth, new content releases, and enhanced operating efficiencies. Income tax expense increased by 22% year-on-year to RMB11.8 billion, primarily driven by operating profit growth.

联营公司及合资企业的份额利润为人民币93亿元，而去年同期为人民币24亿元。按照IFRS准则，份额利润为人民币77亿元，比去年同期增加了人民币45亿元，这主要归因于联营公司业务增长、新内容发布以及运营效率提升等因素。所得税费用同比增长22%，达到人民币118亿元，主要受营业利润增长驱动。

On non-IFRS basis, diluted EPS was RMB5.91, up 33% year-on-year, outpacing non-IFRS net profit growth due to reduced share count from our share buybacks. On non-IFRS financial figures for quarter four, operating profit was RMB59.5 billion, up 21% year-on-year. Net profit attributable to equity holders was RMB55.3 billion, up 30% year-on-year. The difference in Y-on-Y growth rates between operating profit and net profit was primarily due to higher non-IFRS share of profit from associates and JV, which went up by 72% to RMB7.7 billion this quarter.

按非IFRS标准计算，稀释后每股收益为人民币5.91元，同比增长33%，超出非IFRS净利润增长，原因是由于回购股份减少了流通股数。第四季度非IFRS财务数据中，营业利润为人民币595亿元，同比增长21%。归属于股东的净利润为人民币553亿元，同比增长30%。营业利润与净利润同比增长率的差异，主要是由于联营和合资企业的非IFRS份额利润大幅提升，本季度增长72%至人民币77亿元所致。

Moving on to gross margin. For the fourth quarter, overall gross margin was 53%, up 3 percentage points year-on-year and by segment. Value-added services gross margin was 56%, up 2 percentage points year-on-year due to a higher mix of high margin domestic games revenue, margin improvement in music subscription revenue and a lower mix of low margin live streaming revenue. Marketing Services gross margin was 58%, up 1 percentage point year-on-year due to growth in high margin Video Accounts and Weixin Search revenues.

接下来讲述毛利率情况。第四季度，整体毛利率为53%，同比上升3个百分点，各板块情况如下：增值服务毛利率为56%，同比上升2个百分点，这归功于高利润率国内游戏收入比重提高、音乐订阅收入毛利率改善以及低毛利率直播收入比重下降；营销服务毛利率为58%，同比上升1个百分点，这得益于高毛利视频账号和微信搜索收入的增长。

FinTech and Business Services gross margin was 47%, up 3 percentage points Y-on-Y due to a higher mix of high margin revenues alongside improved cost efficiency in our cloud services. Our fourth quarter operating expenses, selling and marketing expenses were RMB10.3 billion down 6% from a high base in the same quarter last year. Selling and marketing expenses represented 6% of revenues down from 7% in the same quarter last year.

金融科技和商业服务的毛利率为47%，同比上升3个百分点，原因在于高毛利收入比重提高以及云服务成本效率改善。第四季度的营业费用中，销售及营销费用为人民币103亿元，同比下降6%，占收入比例由去年同期的7%降至6%。

Total G&A expenses were RMB31.4 billion, up 16% Y-on-Y substantially driven by increased R&D expenses which grew 21% year-on-year to RMB19.8 billion mainly due to higher staff costs and GPU service depreciation related to our AI initiatives. G&A, excluding R&D was up 8% in Y-on-Y to RMB11.6 billion. At quarter end, we had approximately 111,000 employees, up 5% year-on-year or 2% quarter-on-quarter. For the fourth quarter 2024, non-IFRS operating margin was 34%, up 3 percentage points year-on-year, largely in line with gross margin expansion.

总管理费用为人民币314亿元，同比增长16%，主要受研发费用增加的推动，研发费用同比增长21%，达到人民币198亿元，主要原因是员工成本上升和与AI项目相关的GPU服务折旧。剔除研发费用的总管理费用同比增长8%，达到人民币116亿元。季度末，我们约有111,000名员工，同比增加5%，环比增加2%。2024年第四季度，非IFRS营业利润率为34%，同比上升3个百分点，与毛利率的提升基本一致。

Next, I'll highlight some key cash flow and balance sheet metrics. For the fourth quarter, operating CapEx was RMB34.9 billion, up 421% year-on-year, driven by increased investment in GPUs and servers to ramp up our AI capabilities. Non-operating CapEx was RMB1.7 billion, up 103% year-on-year, primarily driven by data center construction in progress. Our total CapEx was RMB36.6 billion, up 386% year-on-year.

接下来，我将重点介绍一些关键的现金流和资产负债表指标。第四季度，运营资本支出为人民币349亿元，同比增长421%，这主要是由于在GPU和服务器上的投资增加，以加速我们的AI能力建设。非运营资本支出为人民币17亿元，同比增长103%，主要受正在建设中的数据中心推动。我们的总资本支出为人民币366亿元，同比增长386%。

Free cash flow was RMB4.5 billion down 87% year-on-year, primarily due to increased CapEx spending on GPUs, servers and data centers. On a Q-on-Q basis, free cash flow was down 92% due to timing differences settlement of certain accrued expenses, higher CapEx spending on GPUs and servers alongside with seasonally lower games gross receipts. Net cash position was RMB76.8 billion down 20% Q-on-Q reflecting cash outflows related to CapEx and share repurchases.

自由现金流为人民币45亿元，同比下降87%，主要原因是GPU、服务器和数据中心资本支出增加。从季度环比来看，由于某些应计费用的结算时点差异、GPU和服务器资本支出增加以及季节性较低的游戏毛收入，自由现金流环比下降92%。净现金头寸为人民币768亿元，环比下降20%，反映了与资本支出和股票回购相关的现金流出。

On capital returns, for the full year of 2024, we repurchased 307 million shares with a total consideration of HKD112 billion, more than doubling both number of shares repurchase and total consideration from last year. Our weighted average number of shares for calculating 2024 diluted EPS decreased by 2% year-on-year. Subject to shareholders' approval at the upcoming 2025 AGM, we are proposing an annual dividend of HKD4.5 per share, reflecting a 32% increase from previous year. The dividend will be payable to shareholders on May 30, 2025.

关于资本回报，2024全年我们回购了3.07亿股，总成交额为1120亿港元，回购股数和总成交额均较去年翻倍。用于计算2024年稀释每股收益的加权平均股数同比下降了2%。待2025年即将召开的股东大会获得股东批准后，我们拟派发每股4.5港元的年度股息，较上一年增长32%。该股息将于2025年5月30日支付给股东.

Thank you.

谢谢。

Question-and-Answer Session

A - Wendy Huang

Thank you, John. We shall now open the floor for questions. [Operator Instructions] The first question comes from Kenneth Fong from UBS. Kenneth, the line is open.

谢谢你，John。现在我们将开始问答环节。[操作提示] 第一个问题来自来自瑞银的Kenneth Fong。Kenneth，请开始提问。

Kenneth Fong

Hi. Good evening, management. Congrats for the strong quarter and thanks management for taking my questions. I have two questions. The first one is on the AI CapEx impact on financials. So as we step up the CapEx on AI, our margin will be inevitably dragged by additional depreciation and R&D expenses. So over the past few years, we have seen meaningful increase in margin as we focus on high quality growth. So going forward, how should we balance between growth and profitability improvement?

大家好，管理层晚上好。祝贺本季度表现强劲，也感谢管理层回答我的问题。我有两个问题。第一个问题是关于AI资本支出对财务的影响。随着我们加大在AI上的资本支出，我们的利润率不可避免地会因额外的折旧和研发费用而受到拖累。过去几年中，我们在专注高质量增长的同时已经看到利润率有显著提升。那么，未来我们应如何平衡增长与盈利能力提升之间的关系？

And my second question is, on Mini Shops. In Q3, we launched our Weixin Mini Shops and Blue Packet gifting function that have been very well received by the user. So can management share with us the strategy and key initiatives this year for e-commerce? Thank you.

我的第二个问题是关于微店。在第三季度，我们推出了微信微店和红包赠礼功能，受到了用户的广泛好评。请问管理层能否分享一下今年在电商领域的战略和关键举措？谢谢。

James Mitchell

Hi, Kenneth. Thank you for your question. So people say the only things that are inevitable in life are death and taxes. And as a company executive, I think it would be remiss, if we were to say that lower margins are inevitable and we certainly don't believe that's the case. As far as increased research and development spending on AI is concerned and essentially every year of Tencent's history we've been increasing our research and development spending on various different projects. So we don't see R&D spending being a pressure per se on our margins.

你好，Kenneth。感谢你的提问。俗话说，人生唯一不可避免的只有死亡和税收。作为企业高管，我认为如果我们说利润率降低是不可避免的，那将是不负责任的，我们绝不这么认为。就增加在AI上的研发支出而言，在腾讯的历史上，我们几乎每年都在不断增加各类项目的研发投入，所以我们并不认为研发费用本身会对我们的利润率造成压力。

CapEx is a more nuanced topic because we did step up CapEx to a new sort of higher steady state in the fourth quarter of last year and over time that incremental CapEx will flow through into incremental depreciation over the next several years. But it's worth digging into exactly where that CapEx is going to understand whether the depreciation becomes a margin pressure or not. So the most immediate use of the CapEx is GPUs to support our ad tech and to a lesser extent our games businesses. And you can see from our results, you can hear from what Martin talked about that, that CapEx actually generates good margins, high returns.

资本支出则是一个更细致的话题，因为我们在去年第四季度将资本支出提升到了一个新的较高的稳定水平，随着时间推移，这部分新增资本支出将在未来几年逐步转化为相应的折旧。但值得深入探讨的是，这部分资本支出究竟花在了哪里，以判断折旧是否会对利润率形成压力。最直接的用途是用于购买GPU，来支持我们的广告技术以及在较小程度上支持我们的游戏业务。从我们的业绩以及Martin的陈述中可以看出，这部分资本支出实际上带来了良好的利润率和高回报。

A second use of CapEx was GPUs for large language model training. And there was a period of time last year when there was a belief that every new generation of large language model required an order of magnitude more GPUs, that period of time ended with the breakthroughs that DeepSeek demonstrated. And now the industry, and we within the industry are getting much higher productivity on a large language model training from existing GPUs without needing to add additional GPUs at the pace previously expected.

资本支出的第二项用途是用于大语言模型训练的GPU。去年曾有一段时间，人们认为每一代新大语言模型都需要数量级更多的GPU，而这一阶段随着DeepSeek所展示的突破而结束。现在，无论是整个行业还是我们自身，都能从现有GPU上获得更高的生产率，而无需以此前预期的速度不断增加GPU数量。

Third, there's CapEx related to our cloud business, which we buy this GPU servers, we rent them out to customers, we generate a return. It may not be the highest return business in our portfolio, but nonetheless, it's a positive return. It covers the cost of the GPUs and therefore the attendant depreciation. And then finally, where I think there is potentially the short-term pressure is the CapEx for 2C inference. And that is an additional cost pressure. But we believe it's a manageable cost pressure because that CapEx is a subset of the total CapEx.

第三，资本支出还涉及到我们的云业务，我们购买GPU服务器并租赁给客户，从中获得回报。虽然这可能不是我们投资组合中回报最高的业务，但仍然是正向回报。它可以覆盖GPU的成本及相应的折旧。最后，我认为可能带来短期压力的是面向消费者（2C）的推理相关资本支出，这是一项额外的成本压力，但我们相信这是可以管理的，因为这部分资本支出只是总资本支出的一部分。

And, we're also optimistic that over time those -- the 2C inference activity that we're generating, just like previous activity within different Tencent platforms will be monetizing through a combination of advertising revenue and value added services. So overall, while we understand that you have questions around the step up in CapEx and how that translates into profitability over time, we're actually quite optimistic that we can continue to grow the business while protecting margins. Thank you.

此外，我们也乐观地认为，随着时间的推移，我们所产生的面向消费者的推理活动，正如腾讯各平台以往的活动一样，将通过广告收入和增值服务的组合来实现变现。总体来说，虽然我们理解您对加大资本支出及其如何在未来转化为盈利能力的疑问，但我们实际上非常乐观，相信在保护利润率的同时，我们能继续推动业务增长。谢谢。

Martin Lau

Just one sort of point to add to James' very comprehensive answer which is in the inference for consumer-facing product, there's actually a lot of venues through which we can actually reduce the unit cost by technical means, by software and by better algorithms. So I think that's also sort of a factor to keep in mind. So, with respect to the Mini Shop, right, I would say, number one, it's a very long-term initiative for us. So any particular initiatives is just sort of one of many things that we can do to build up this ecosystem over the long run.

我再补充一点，针对James关于面向消费者产品推理部分的详尽回答，其实我们有很多途径可以通过技术手段、软件以及更好的算法来降低单个成本，我认为这也是需要考虑的一个因素。关于微店，我想说，首先，它对我们来说是一个非常长期的举措，因此任何单一的举措只是我们长期构建这一生态系统所能做的众多工作之一。

And secondly, I would say that, I would like to remind the audience about the positioning of the Mini Shop, right? It's really a unified platform that connects all the components of our Weixin ecosystem. And there is a standard and indexed merchandise information data structure so that the merchandise information can actually flow freely across the different components of the Weixin ecosystem. And that's -- the purpose is actually for our consumers to be able to find quality products and merchants.

其次，我想提醒大家注意微店的定位。它实际上是一个统一的平台，连接了我们微信生态系统中的所有组成部分，并具有标准化和索引化的商品信息数据结构，从而使商品信息能够在微信生态系统的不同部分之间自由流通，其目的就是让我们的消费者能够找到优质的产品和商家。

And if you look at the different components of the Weixin ecosystem, right, there is social infrastructure, there is content, there is search, there is Mini Programs, there's transaction platform and there's also WeCom. So there's a lot of components within the unified Weixin ecosystem that Mini Shop really wants you operate in. And if you look at the gifting, it's really one feature within the social component of the ecosystem.

如果你观察微信生态系统的各个组成部分，就会发现有社交基础设施、内容、搜索、小程序、交易平台以及企业微信。所以，在这个统一的微信生态系统中，微店希望你能参与其中的众多部分。而赠礼功能，则只是生态系统中社交部分的一个功能而已。

And -- so it's just sort of one of the many, many different features that we can add in order to really leverage the full Weixin ecosystem. And from the initial feedback, as you said, it's actually quite well received. We see a lot of people using this function to gift to their friends during the Chinese New Year period. And this gifting actually also magnify the word of mouth effect of quality products because you will only gift the products that you felt is actually sort of good.

因此，这只是我们可以添加的众多功能之一，以真正充分利用整个微信生态系统。从最初的反馈来看，正如您所说，这一功能确实受到了好评。我们看到许多人在春节期间使用此功能向朋友赠送礼物，而这种赠礼实际上也放大了优质产品的口碑效应，因为你只会赠送那些你认为真的不错的产品。

And for the people who receive the products which sort of magnify the initial purchase, they would enter their address into the delivery address and that would actually help us to get build an infrastructure of delivery graph and that would actually sort of help us to complete transactions in the easier way for a lot of people who have entered their address. And usually it actually would also induce the people who receive the gifts to sometimes give that further to their friends.

对于那些收到产品的人来说，这会放大初次购买的效果，他们会填写收货地址，这实际上有助于我们构建配送网络，从而使已经留下地址的消费者未来的交易变得更加便捷。而通常，这也会促使收到礼物的人进一步将礼物赠送给他们的朋友。

So overall, I think the word of mouth effect is very good and the feedback from the merchants have been good. But it's only one component within the overall Asian ecosystem right now. So we felt over time, we continue to build up this ecosystem, this platform with patience and we treat it as a marathon rather than a sprint. And we felt we can go actually very far and long along this path. And if you look at the GMV of Mini Shop, it continues to grow at a very fast pace in the fourth quarter of last year.

总体来说，我认为口碑效应非常好，商家反馈也不错。但这目前只是整个亚洲生态系统中的一个组成部分。我们相信，随着时间推移，我们将继续耐心地构建这一生态系统和平台，把它视为一场马拉松而非短跑，我们有信心沿着这条道路走得很远、很长。如果你看微店的成交总额（GMV），它在去年第四季度持续以非常快的速度增长。

Wendy Huang

Thank you, Martin. We will take the next…

谢谢你，Martin。接下来我们……

Kenneth Fong

Thank you…

谢谢……

Wendy Huang

Thank you, Kenneth. Next we will take the question from Alicia Yap from Citigroup.

谢谢你，Kenneth。接下来我们将听取来自花旗集团的Alicia Yap的问题。

Alicia Yap

Thank you. Good evening, management. Thanks for taking my questions and also congrats on the strong set of results. Two questions. First is, for the enterprise-facing service that you mentioned, just wondering, if management can illustrate a little bit the demand and adoption rate that you have seen for your AI (ph) service over the past two months and how you foresee the demand growth in the coming quarters? And for the SaaS products, besides Tencent Meeting and Tencent Docs that you mentioned, so can management also share with us some of the software solutions that we plan to roll out that could potentially help cross-sell and upsell to our cloud customer.

谢谢。管理层晚上好。感谢您回答我的问题，并祝贺出色的业绩。我的问题有两个。第一个问题是关于您提到的面向企业的服务，想请问管理层能否介绍一下过去两个月中您们所观察到的AI服务（注：ph）需求和采用率情况，以及您如何看待未来几个季度这一需求的增长？至于SaaS产品，除了您提到的腾讯会议和腾讯文档，管理层是否能与我们分享一些计划推出的软件解决方案，这些方案可能有助于向我们的云客户进行交叉销售和增销？

And second question is, on the consumer-facing application. I think in addition to Yuanbao, which overseas has achieved very strong breakout the last couple of months, there's also this EMA (ph) Copilot and also the Weixin is also with the enhanced search features. So just wondering, how will all these products eventually evolve over time and will Yuanbao positioned as the AI gateway that consolidating all the search and discovery entrance that will be complementary to the WeChat super app. Thank you.

第二个问题是关于面向消费者的应用。我认为除了“元宝”之外，海外市场在过去几个月取得了非常强劲的突破，还有这款EMA（注：ph）Copilot，以及微信也加入了增强的搜索功能。请问所有这些产品最终将如何演进？“元宝”是否将定位为整合所有搜索与发现入口的AI门户，作为对微信超级应用的有力补充？谢谢。

Martin Lau

Okay. In terms of the AI service demand, it's actually very strong, but as I said earlier and then James also talked about it, right, we actually supply constraints. Part of the reason why you see such a big step up in terms of the CapEx in the fourth quarter is because we have a bunch of rush orders for GPUs for both inference as well as for our cloud service. And we would only be able to capture the large increase in terms of AI service demand when we actually install these GPUs into the data center, which would take some time. So I would say, we probably have not really captured a lot of that during the first quarter, but over time, it will capture quite a bit of it with the arrival and installation of the GPUs.

好的。关于AI服务需求，其实非常强劲，但正如我之前所说，以及James也提到的，我们实际上存在供应限制。你看到第四季度资本支出大幅提升的部分原因在于，我们接到了大量紧急订单，用于推理和云服务的GPU采购。只有当我们真正将这些GPU安装到数据中心后，才能捕捉到AI服务需求的大幅增长，而这需要一些时间。所以，我认为，我们在第一季度可能还没有真正捕捉到这些需求，但随着GPU的到位和安装，需求增长将会大幅体现。

很可能是来自Deepseek的需求。

And in terms of the different software solutions, right, so you mentioned Tencent Meeting, Tencent Docs and WeCom is another very strong product, as a matter of fact, this is actually our biggest SaaS product in terms of revenue and it actually has grown a lot, doubled its revenue year-on-year in the previous quarter. And in addition to that, we also see security PaaS software and audio, video PaaS software, including real-time communications as well as live broadcasting software that we actually selling to our cloud customers. And quite a bit of these also can be enabled with AI to provide extra value to our customers.

关于不同的软件解决方案方面，你提到了腾讯会议、腾讯文档，而企业微信也是一个非常强劲的产品，实际上它是我们收入最大的SaaS产品之一，并且在上一季度实现了同比翻倍的增长。除此之外，我们还看到了安全PaaS软件和音视频PaaS软件，包括实时通信以及直播软件，这些产品我们也在销售给我们的云客户。其中相当一部分还可以通过AI赋能，为客户提供额外的价值。

And then, on the consumer-facing application, yes, we actually have a whole host of different consumer-facing applications and you should expect more to come. I think AI is actually in a very early stage, so it's really hard to talk about what the eventual state would look like. But I would say, one, each product will continue to evolve into very useful and even more powerful products for users.

至于面向消费者的应用，是的，我们实际上拥有一系列不同的面向消费者的应用，并且你们应当期待更多产品的推出。我认为AI实际上还处于非常早期的阶段，因此很难说未来究竟会呈现怎样的状态。但我想说，每款产品都会不断演进，变得更加实用甚至更强大。

So Yuanbao can be sort of a very strong AI native assistant and the EMA (ph) Copilot could be your personal library and also a collaborative library for team collaborations. And Weixin can have many, many different features to come, right? And in addition to these products, I think our other products would have AI experiences including QQ, including browser and other products. So I think we would see more and more AI -- consumer AI-facing products and at the same time, each one of the products will continue to evolve.

因此，“元宝”可以成为一个非常强大的AI原生助手，而EMA（注：ph）Copilot则可以成为你的个人资料库，也可以是团队协作的共享库。同时，微信还将推出许多不同的功能。除此之外，我认为我们的其他产品，如QQ、浏览器等，也会逐步具备AI体验。所以，我们将会看到越来越多面向消费者的AI产品，同时每款产品也会不断演进。

I think, if you look at Yuanbao, it is indeed consolidating a lot of different functionalities, but it will not be the only gateway. Each one of our products would actually try to look for unique use cases in which they can leverage AI to provide great user experience to their users. But at the same time, our different products can also work together in order to provide the right pathway for our AI products to grow their own user base. So I think that will be continuing to evolve and that would be helpful for us as we build a whole host of AI solutions and applications of consumers.

我认为，如果你观察“元宝”，它确实整合了很多不同的功能，但它并不会成为唯一的入口。我们的每款产品都会努力寻找利用AI为用户提供卓越体验的独特应用场景。同时，我们的不同产品也可以协同工作，为我们的AI产品构建正确的用户增长通道。所以，我认为这一点将持续演进，这对我们构建一系列面向消费者的AI解决方案和应用将非常有帮助。

So I think that will be continuing to evolve and that would be helpful for us as we build a whole host of AI solutions and applications of consumers.

因此，我认为这一点将不断发展，并在我们构建一整套面向消费者的AI解决方案和应用时发挥重要作用.

Alicia Yap

Thank you, Martin.

谢谢你，Martin.

Wendy Huang

Thank you. We will take the next question from Shi Jialong from Nomura.

谢谢。我们将提下一个问题，来自野村证券的史嘉龙。

Jialong Shi

史嘉龙

Thanks, Wendy. Thanks, management, and good evening. Congratulations again on a very solid quarter. My question is actually a follow-up on the last question. So we saw Tencent Yuanbao shows very strong growth momentum since this year. So can management elaborate the strategies to further grow the user base in this very competitive market? Yuanbao is a hybrid of AI chatbot and AI search provider. So just wonder which part of the two is Tencent most excited about? And also relating to that, how big a market share will AI search eventually represent in the entire search market in the future in terms of search queries and how do you guys plan to monetize AI search in the future? Thank you.

谢谢，Wendy。谢谢管理层，晚上好。再次祝贺你们在这一季度取得了非常稳健的成绩。我的问题实际上是上一个问题的跟进。我们看到腾讯元宝今年以来显示出非常强劲的增长势头。那么，管理层能否详细说明在这个竞争激烈的市场中进一步扩大用户基础的策略？元宝是一款集成了人工智能聊天机器人和人工智能搜索服务的混合产品。那么，腾讯最看重这两者中的哪一部分？另外，关于这一点，未来人工智能搜索在整个搜索市场中在搜索查询方面最终将占据多大的市场份额，以及你们计划如何实现人工智能搜索的商业化？谢谢。

Martin Lau

Well, in terms of Yuanbao, well, right now, it is a chatbot and search. But over time, I think, it would actually proliferate into all capable AI assistants with many different functionalities serving different types of people. So, if -- it would range from students who want to learn and it would include all kinds of different people who actually -- knowledge workers who want to complete their work. And we would sort of cover deep research which allows people to do very deep research into different topics. And so, I think it's going to be having many, many different applications.

关于元宝，目前它既是一个聊天机器人，也是一个搜索工具。但随着时间推移，我认为它实际上会发展成为具备多种功能、能够服务于不同群体的全能型人工智能助手。它的应用范围将从希望学习的学生，到需要完成工作的知识工作者等各种不同的人群。我们还将涵盖深度研究，帮助人们对不同主题进行深入探究。所以，我认为它将拥有许多不同的应用场景。

I think the unique advantage of Yuanbao, obviously, it's about innovation, it's about sort of continuously adding features and functionalities to fulfill the user needs. But I think Yuanbao has got the unique advantage of having access to the content ecosystem of Tencent, especially, around official accounts and video accounts, these are sort of very high quality information sources. And at the same time, we felt our multi-model strategy actually sort of helps the users to get access to the best model and also have the advantage of using a combination of models to fulfill their complex needs.

我认为元宝的独特优势显然在于创新，不断添加功能和特性以满足用户需求。但我认为元宝具有独特的优势，即能够接入腾讯的内容生态系统，尤其是官方账号和视频账号，这些都是非常高质量的信息来源。同时，我们认为我们的多模型策略实际上帮助用户获得最佳模型，并通过组合多种模型来满足其复杂需求。

And in the future, as I actually alluded to, many of our different large DAU products would actually start to add different AI features and functionalities and some of them would have pathway and access to Yuanbao and our array of products would actually sort of help each other out. So I think those are the things that we can do continuously which sort of would be competitive. But at the same time, there are some unique advantages that we have too.

而且在未来，正如我之前所提到的，我们许多不同的大型日活跃用户产品将会开始增加各种人工智能功能和特性，其中一些产品将与元宝形成互通渠道，我们的产品系列也将相互协作。因此，我认为这些都是我们可以持续进行且具有竞争力的领域。但与此同时，我们也拥有一些独特的优势。

James Mitchell

And on your more general question about AI prompts vis-a-vis traditional search, I think different people will have different opinions and it will take time to play out. But at a high level, if we look at the history of web search subsuming web directory, if we look at our own behavior with AI prompts vis-a-vis traditional search, I think it's possible that AI search will subsume traditional search. Because, ultimately web directory, traditional search, AI prompt, all represent mechanisms for accessing the Internet's knowledge graph.

关于您提出的关于人工智能提示与传统搜索的一般性问题，我认为不同的人会有不同的看法，这一过程也需要时间来显现。但从高层次来看，如果我们观察网络搜索取代网络目录的历史，再结合我们自身在使用人工智能提示与传统搜索时的行为，我认为人工智能搜索有可能会取代传统搜索。因为最终，网络目录、传统搜索和人工智能提示都代表了访问互联网知识图谱的机制。

But within them, AI prompts brings new technology, new efficiency, also new transactional capabilities through agentic AI that were not possible in traditional search. And so, in terms of how the AI prompt will be monetized, time will tell. But I think that we can already see in the Western world the first monetization is through subscription models and then over time in a performance advertising will follow. I think in China, it will start with performance advertising and then value-added services will follow. Thank you.

但是在这些机制中，人工智能提示带来了新技术、新效率，以及通过代理型人工智能实现的新交易能力，而这些在传统搜索中是无法实现的。因此，关于人工智能提示如何实现商业化，时间会证明一切。但我认为我们已经在西方看到，最初的商业化方式是通过订阅模式，随后随着时间推移，绩效广告将会跟进。而在中国，可能会从绩效广告开始，随后是增值服务。谢谢。

Jialong Shi

史嘉龙

Thank you.

谢谢。

Wendy Huang

Thank you. We will take the next question from Ronald Keung from Goldman Sachs.

谢谢。我们将提下一个问题，来自高盛的郭伟东。

Ronald Keung

Thank you, Pony, Martin, James, John and Wendy. So two questions. First on [Technical Difficulty] advertising, with a healthy 17% growth that we saw, should we view this fourth quarter exit rate as a proxy, let's say, to 2025 this year? And given the talk about the AI-powered enhancements and we've seen from Meta, that machine learning and advantage plus shopping, all of these AI could drive growth acceleration for some of the global peers. So is there a possibility for even acceleration of this marketing services growth line, as we head into this year with more AI applications of that?

谢谢，Pony、Martin、James、John和Wendy。这里有两个问题。首先关于[技术困难]广告业务，我们看到其健康的17%增长，是否应将这一第四季度的退出率视为今年通向2025年的一个指标？另外，鉴于大家对人工智能驱动的提升的讨论，以及我们从Meta看到的机器学习、优势加购物等技术，这些人工智能是否有可能推动部分全球同行的增长加速，从而使这一营销服务增长线进一步加速？

Separately on games, how should we view the growth outlook this year for Domestic and International, especially, the higher base effect for Domestic by the second half of this year? And with AI, what are the implications to this business? You talked about longevity, but also competition and cost structures in this games industry. Thank you.

另外关于游戏业务，今年国内和国际市场的增长前景应如何看待，特别是国内市场在今年下半年面临的基数效应问题？而人工智能又会对这一业务产生怎样的影响？您提到了生命周期，同时也谈到了竞争和游戏行业的成本结构。谢谢。

James Mitchell

So why don't I lead off with advertising and game trends briefly and then I'm not sure if Martin would address game AI. We'll determine that in due course. I think on the advertising, we're very pleased with the growth rate in the fourth quarter, which clearly outpaced the industry. There were no particular special tailwinds to call out. It was fairly organic growth and it was very broad-based against pretty much every industry that we monitor. And we think that's because across pretty much every industry, we monitor the AI enhancements where we're deploying and delivering superior return on investment for advertisers versus what they previously enjoyed and versus what's available elsewhere.

那么我先简要谈谈广告和游戏的趋势，之后不确定Martin是否会谈及游戏中的AI问题，我们会适时决定。关于广告，我们对第四季度的增长率非常满意，这一增长率明显超过了整个行业。没有特别的外部利好推动，这完全是有机增长，并且几乎涵盖了我们监测的每一个行业。我们认为这是因为在几乎所有行业中，我们都在推动和应用人工智能提升，为广告主提供比他们以前获得的以及其他地方可用的更优质的投资回报。

You compared us with some of our global peers, which I think is the right thing to do with the caveat that some of our global peers tend to move to a sort of fully loaded ad load much earlier in the evolution of their products. For example, short video versus we tend to gradually incrementally increase the ad load for our newer products like short video and that remains the case. And so I think there is a difference in how quickly we choose to sort of race down the runway versus some of our global peers. But overall, as long as the macro environment doesn't change dramatically, then I think we feel quite comfortable with our advertising business.

您将我们与一些全球同行进行了比较，我认为这是正确的，不过需要说明的是，一些全球同行在其产品发展的早期就会采取较高的广告加载率。比如短视频，而我们则倾向于逐步、渐进地增加新产品（如短视频）的广告加载率，情况一直如此。因此，我认为在加速推广的节奏上，我们与一些全球同行存在差异。但总体而言，只要宏观环境没有发生巨大变化，我们对广告业务会感到相当有信心。

敢为天下后。

As far as the game business is concerned, you're asking about a higher base effect in the second half of the year. I mean, I guess, it's the curse of this kind of industry that if you do well, then people worry about the base effect a year later. But, I think that there are some observable facts about our game business today. One is that we ended last year with our deferred revenue, much of which comes from the game business, up high-teens percentage year-on-year. And so that deferred revenue will flow through into reported revenue through the first half, but also through the second half of next -- 2025 and some in 2026.

至于游戏业务，您提到今年下半年基数效应较高的问题。也就是说，这类行业的一个宿命是，如果业绩表现良好，随后人们就会担心基数效应问题。但我认为我们游戏业务有一些可以观察到的事实。首先，我们去年以较高的百分比结束了递延收入的记录，其中很大部分来自游戏业务。这部分递延收入将在今年上半年，以及2025年下半年和部分2026年的报告收入中体现出来。

And then a second observable fact that we called out in the prepared remarks is that the user behavior on our games during Chinese New Year is quite a nice sort of insight into whether our games are generally increasing or not increasing popularity. And so, for all five of our highest grossing games to see daily active users up year-on-year in the Chinese New Year this year versus the Chinese New Year period last year is a positive leading indicator.

其次，我们在预先准备的发言中指出，春节期间用户在我们游戏中的行为提供了一个很好的洞察，判断我们的游戏是否普遍在增加人气。因此，我们所有五款最高收入的游戏在今年春节期间的日活跃用户与去年春节期间相比都有所上升，这是一个积极的领先指标。

So those are both sort of observable facts. There's also subjective opinions. Subjectively, we believe we have a couple of games that are well on their way to graduating to evergreen status as well. And we mentioned one of them, Delta Force. And so, that's a really important opportunity tailwind. Secondly, as we talked about in the prepared remarks, we're -- we have a number of new games in the pipeline that we're excited about.

这些都是可以观察到的事实。同时也有一些主观意见。从主观上讲，我们认为有几款游戏正朝着常青状态稳步迈进。我们提到了其中一款《三角洲部队》，这对我们来说是一个非常重要的机会利好。其次，正如我们在预先准备的发言中所说，我们还有许多新游戏正在开发中，这令我们感到非常兴奋。

And then thirdly, we do believe that games benefit in a direct and potentially a less direct way from AI technology enhancements. The direct way is the game developers using AI to assist them in creating more content more quickly and serving more users more effectively. And then the indirect way, which may be more of a multi-decade rather than a second half of this year story is that, as humanity uses AI more broadly, then we think there'll be more time and also more desire for high agency activities among people who are now empowered by AI. And so, one of the best ways for them to express themselves in a high agency way rather than a passive way is through interactive entertainment, which is games.

第三，我们确实认为游戏业务将直接或间接受益于人工智能技术的提升。直接的方式是游戏开发者利用AI更快地创造更多内容，并更高效地服务更多用户；而间接的方式，可能是一个跨越数十年的长期趋势，而不仅仅是今年下半年的情况，即随着人类更广泛地应用AI，我们认为人们会有更多时间和更强烈的需求来参与主动性更高的活动，而其中一种最佳的自我表达方式，而不是被动的方式，就是通过互动娱乐，也就是游戏。

Martin Lau

And I think just one more point to add, which is, sort of when we think about the competitive dynamics, right, we actually felt AI would allow evergreen games to be more evergreen. And, we are already seeing sort of how AI can help us to execute and magnify our evergreen strategy. And part of it is within production, right, you can actually produce great content now within shorter period of time so that you can keep updating the games with higher frequency of high-quality content.

我再补充一点，当我们考虑竞争动态时，我们实际上认为人工智能会使常青游戏变得更加常青。我们已经看到，AI可以帮助我们执行并放大常青战略，其中一部分体现在生产方面，即现在可以在更短的时间内制作出优质内容，从而使我们能够以更高频率不断更新游戏内容。

And with the PvE experience, when you have smarter bots, right, you actually sort of make the game more exciting and more like PvP. And within PvP, a lot of the matching and balancing and coaching of new users can actually sort of be done in a much better way when you apply AI. So all these would actually help already popular and large scale games to be even more popular and more attractive for the users.

而在PvE体验中，当你拥有更智能的机器人时，游戏实际上会变得更刺激，更类似于PvP。在PvP中，许多匹配、平衡以及对新用户的指导在应用AI后都可以得到更好的处理。因此，这些都将有助于已经流行且大规模的游戏变得更加受欢迎，更具吸引力。

Ronald Keung

Got it. Thank you.

明白了。谢谢。

Wendy Huang

We will take the next question from Alex Yao from JP Morgan.

我们将提下一个问题，来自摩根大通的姚先生。

Alex Yao

Thank you, management, for taking my question and congrats on a strong quarter. My first question is regarding the commercial payments. It's encouraging to see that your commercial payment revenue has turned from negative growth in Q3 to year-on-year flat in Q4. Can you share with us your observation of how the commercial payment activity trends so far in first quarter of 2025?

感谢管理层回答我的问题，并祝贺你们取得了一个强劲的季度业绩。我的第一个问题是关于商业支付业务的。令人鼓舞的是，你们的商业支付收入已经从第三季度的负增长转为第四季度的同比持平。能否与我们分享一下你们对2025年第一季度商业支付活动趋势的观察？

And then my second question is a follow-up to the AI and the CapEx. You guided a CapEx to revenue ratio of low-teens for 2025, which is a similar ratio as for '24. So basically this guidance implies a significant slowdown of CapEx growth. Can you talk us through the rationale behind this CapEx to revenue ratio? Is it because you foresee a slowdown in demand growth for GenAI or is it because the big step up in 2024 will be sufficient to address the GenAI demand in 2025? Thank you.

我的第二个问题是关于人工智能和资本支出的后续。你们对2025年的资本支出与收入比例预期在低两位数，与2024年的比例相似。基本上，这一预期意味着资本支出增长将大幅放缓。能否解释一下这种资本支出与收入比例背后的理由？这是因为你们预见到生成式人工智能需求增长将放缓，还是因为2024年的大幅提升足以满足2025年生成式人工智能的需求？谢谢。

Martin Lau

In terms of commercial payments, what our observation is that the volume of transactions actually sort of increase further, but then the pricing pressure on the ASP actually continued. So net-net, it's still -- from a value perspective, it's still kind of flattish. So the way we interpret it is that I think consumers' propensity spend is actually coming back. But then on the supply side, there's still a lot of pricing pressure. So hopefully, this is sort of a good sign that we're toward a tail end of a tough market, right? And then when consumers demand continue to improve, then over time the suppliers will be less cutthroat and over time, that would translate into value growth. But I think that's something that we'll have to see going forward.

关于商业支付，我们的观察是交易量实际上在进一步增长，但平均销售价格（ASP）的定价压力依然存在。从价值角度来看，总体上依然持平。我们的解读是，消费者的支出倾向正在回升，但在供应端，仍然面临较大的定价压力。希望这表明我们正处于艰难市场的尾声阶段，当消费者需求持续改善时，供应商之间的竞争会逐渐缓和，进而转化为价值增长。不过这还需要我们持续观察。

James Mitchell

And on your question about CapEx revenue then, yes, it is because the step up in late 2024 should be sufficient to address GenAI and other needs in 2025 at this sort of new normal run rate. We incur a time lag between ordering the GPU servers and fully deploying them in data centers. And so, during the fourth quarter, during part of the first quarter, we were in that situation. But as Martin spoke to exiting the first quarter, we're deploying the GPUs and we get the benefit of them both for our internal inference needs for Yuanbao as well as our external Tencent cloud needs for renting out to clients and generating direct revenue.

关于你提到的资本支出与收入的问题，答案是，2024年末的提升应该足以满足2025年在这种新常态下生成式人工智能及其他需求。我们在订购GPU服务器和在数据中心全面部署之间存在一个时间延迟。因此，在第四季度以及第一季度的一部分时间里，我们正处于这种情况。但正如Martin所说，随着第一季度结束，我们正在部署GPU，并且从中受益，不仅满足了元宝的内部推理需求，还支持了对外出租给客户并直接产生收入的腾讯云服务。

And I think that if you step back and look at the bigger picture then, there was a period last year when people asked us if our CapEx was big enough relative to our China peers, relative to our global peers. And now, out of the listed companies, I think we had the largest CapEx of any China tech company in the fourth quarter. So we're at the forefront among our China peers.

回顾大局，去年曾有人问我们，相对于中国同行和全球同行，我们的资本支出是否足够。而现在，在所有上市公司中，我认为我们在第四季度的资本支出是中国科技公司中最大的，因此我们在中国同行中处于领先地位。

敢为天下后，不急着搞，准备着抄作业，这样的定位很适合腾讯。

In general, the China tech companies spending less on CapEx as a percentage of revenue than some of their Western peers. But we believe for some time that's because the Chinese companies are generally prioritizing efficiency and utilization -- efficient utilization of the GPU servers. And that doesn't necessarily impair the ultimate effectiveness of the technology that's being developed. And I think DeepSeek's success really sort of symbolized and solidified, demonstrated that reality. Thank you.

总体来说，中国科技公司的资本支出占收入的比例低于一些西方同行。但我们认为，这在一定程度上是因为中国公司普遍更重视效率和利用率——即GPU服务器的高效利用，而这并不必然影响所开发技术的最终效果。我认为DeepSeek的成功正很好地象征、巩固并证明了这一现实。谢谢。

Martin Lau

But the only point I want to add is, this is a very dynamic situation, right? So what we are giving is actually sort of our expectation. But frankly, right, the expectation can change. If suddenly sort of there's a surge of demand, then we can definitely sort of increase our order for GPUs. So I think we'll be sort of very flexible and dynamic in responding to the market dynamics.

我想补充的一点是，当前形势非常动态，所以我们给出的只是我们的预期。坦率地说，预期是可能变化的。如果突然出现需求激增，我们肯定会增加GPU的订单。因此，我认为我们会非常灵活、动态地应对市场变化。

Wendy Huang

Thank you. We will take the next question from John Choi from Daiwa.

谢谢。我们将提下一个问题，来自大和证券的John Choi。

John Choi

Thank you for taking my question. My first question is a follow-up on advertising. So can management share some more color? I think on the prepared remarks you guys mentioned that we've seen increase for most industry, like, which verticals have benefited most. And also in terms of the advertisers, we noticed that video accounts, mini programs, Weixin search, all went up quite a bit. So in terms of the advertisers' behavior, how has this changed and how has this benefited our advertising revenue growth?

感谢您回答我的问题。我的第一个问题是关于广告的后续。管理层能否再多谈一些情况？我记得在预先准备的发言中你们提到大多数行业都有所增长，哪些垂直领域受益最大？另外，从广告主角度看，我们注意到视频号、小程序、微信搜索等都有显著提升。那么，广告主的行为有哪些变化，这对我们的广告收入增长带来了哪些好处？

My second question is on capital allocation. I think management shared that we share buyback in this year will be less than last year, but on the other hand, dividends will increase. So what is our priority when it comes to capital allocation? And meanwhile, how should we think about investments in M&A as we are seeing a very strong demand in the AI industry at the current stage? Thank you.

我的第二个问题是关于资本配置。我记得管理层提到今年的股份回购将低于去年，但同时分红将增加。那么，在资本配置上我们的优先事项是什么？同时，鉴于当前AI行业需求旺盛，我们应如何看待并购投资？谢谢。

James Mitchell

Sure. So on your advertising question, in some of the categories where we saw year-on-year growth included e-commerce, financial, fast moving consumer goods, games, local service, education, healthcare, so a long list of categories across the board. And as we deploy these AI enhancements generally, we do so first in Video Accounts and then it sort of percolates across other Weixin properties, across the Tencent properties and across our ad network, and so that the benefits become increasingly broadly felt over time. So that's on the advertising question.

当然。关于广告的问题，我们观察到同比增长的类别包括电商、金融、快消品、游戏、本地服务、教育、医疗保健等众多领域。随着我们逐步部署这些AI提升，通常先在视频号上应用，然后逐步扩展到其他微信业务、腾讯系产品和我们的广告网络，收益也会随着时间逐步显现。这就是关于广告的问题。

Martin Lau

In terms of capital allocation, I think the key thing overriding principle is actually we want to invest in order to generate return for the company and for the shareholders, right? And it means different areas in different times. There were times in which we invest a lot in the ecosystem and our ecosystem partners and build a very large investment portfolio.

在资本配置方面，我认为最核心的原则是，我们要进行投资，以为公司和股东创造回报，而这在不同的时期会体现在不同领域。曾经，我们大量投资于生态系统及其合作伙伴，并建立了庞大的投资组合。

And then, we started returning cash to our shareholders through dividends and share buyback. And now, there's AI and we felt there's a lot of potential in AI to generate return for the future. So I think we basically now want to create investment strategy that we invest in our future, but at the same time, we also provide current period return through dividend and buybacks, right? So I think that's the overriding principle.

随后，我们开始通过分红和股份回购向股东返还现金。而如今，随着AI的出现，我们认为AI在未来具有巨大潜力。因此，我们基本上希望制定一项既投资于未来，又通过分红和回购提供当前回报的投资策略，这就是我们的核心原则。

And if you look at our ability to do that, I would say, we have a very strong financial capability to do that because we have very strong cash flow on an operating basis. We also have a very large and valuable investment portfolio and a big part of it is actually very liquid. So we have enough financial resources to invest in the future, both in AI as well as, if needed, right, invest in some investment activities. Our investment portfolio is essentially self-funded and at the same time, provide current period return to shareholders, right?

从我们的能力来看，我认为我们具备非常强的财务实力，因为我们的运营现金流非常充裕。此外，我们拥有庞大且有价值的投资组合，其中很大一部分资产流动性很高。因此，我们有足够的财务资源来投资未来，无论是在AI方面还是在必要时进行其他投资活动。我们的投资组合基本上是自筹资金，同时也能为股东提供当前的回报。

So as we look -- for this year, we have already announced that we're going to pay cash dividend of HKD41 billion and we would slightly reduce our share buyback from last year, we said we're going to buy back 100 billion and this year, we said we're going to buy back 80 billion, right? So basically you can call it a 20 billion flexibility buffer for us to sort of sit through the year and see whether we need to invest further in AI. But if you look across the two years, last year we said the dividend was 32 billion and share buyback was 100 billion, that's 132 billion target return. And this year our target return is 80 plus 41 and 121.

展望今年，我们已经宣布将派发410亿港元现金股息，同时稍微减少股份回购金额。去年我们回购1000亿港元，而今年计划回购800亿港元，所以可以理解为预留了200亿的灵活缓冲，以便在年内观察是否需要进一步投资于AI。但如果放眼两年对比，去年我们的分红为320亿港元、回购1000亿，总目标回报为1320亿港元，而今年的目标回报为800加410，即1210亿港元。

But if you add the overspending of our share repurchase last year of 15, right, then this year's number is actually sort of similar to last year's target. So I think, we are trying to provide a very good balance between current period investment -- return as well as future investment. But we have a very strong set of financial resources to do that.

如果加上去年股份回购超支的150亿，那么今年的数字实际上与去年的目标相仿。所以，我们力求在当前回报与未来投资之间取得良好平衡，同时我们具备非常强大的财务资源来实现这一目标。

Wendy Huang

Thank you. We will take the next question from Robin Zhu from Bernstein. Robin, you need to unmute yourself. Maybe we take the next question from Thomas Chong from Jefferies.

谢谢。我们将提下一个问题，来自伯恩斯坦的Robin Zhu。Robin，请解除静音。也许我们接下来提一个来自杰富瑞的Thomas Chong的问题。

Thomas Chong

Hi. Good evening. Thanks, management, for taking my question, and congratulations on a very strong set of results. My question is going back to the previous question on spending and also on higher margin business and monetization. So given the fact that we have been pursuing high quality growth strategy for the past couple of years, and we are also looking into margin expansion story with operating profit growth to be faster than revenue growth. But we also point out that as time goes on, the delta between the two will narrow down. So I think putting -- connecting all the dots together and putting all the puzzles, how should we think about the margin expansion story in 2025 and the next few years? Thank you.

您好，晚上好。感谢管理层回答我的问题，并祝贺你们取得非常强劲的业绩。我的问题回到之前关于支出以及更高利润业务和变现的问题。鉴于过去几年我们一直在追求高质量增长策略，同时也在寻求运营利润增长快于收入增长的利润率扩张，但我们也指出，随着时间推移，两者之间的差距会缩小。那么，把所有信息拼凑在一起，我们应如何看待2025年及未来几年的利润率扩张前景？谢谢。

James Mitchell

Why don't I take a stab at that? So at some level, the reason or a key reason why we have enjoyed operating margin leverage in the past two years, in particular, is because we have enjoyed gross margin leverage. And the reason why we've enjoyed gross profit leverage to revenue is because, while our sort of base business has a blended gross margin of around 50%, there's a number of new revenue streams that contribute the majority of our revenue growth, which are coming in at gross margins of 70%, 80%.

那我来试着回答一下。某种程度上，我们过去两年能够享有运营利润杠杆的一个关键原因在于我们的毛利率杠杆。之所以能实现毛利杠杆效应，是因为我们的基础业务毛利率大约为50%，而有许多新收入来源对我们收入增长贡献巨大，其毛利率达到了70%、80%。

And so, as that mix shift has been underway, that has been pulling up gross margin and resulting in gross profit growing faster than revenue. Now, of course, there is over time a base effect or more accurately a sort of asymptotic effect. If the blended gross margin gets closer to the incremental gross margin, then inevitably the rate of improvement in the blended gross margin decelerates. So I think that's true over the longer term.

随着这种结构性变化的推进，毛利率不断提高，导致毛利增长快于收入增长。当然，随着时间推移会出现基数效应，或者更准确地说，是一种渐进效应。如果混合毛利率趋近于边际毛利率，那么混合毛利率的改善速度不可避免地会放缓。我认为从长远来看，这一点是成立的。

But that said, when we look at our high quality revenue streams, such as the Video Accounts ads, such as the search ads, such as some of the value added financial services, such as the e-commerce transaction fees, such as our own games, then generally, those continue to grow faster than our overall revenue and continue to enjoy contribute substantially higher margins than our blended margin. And so, we believe that we will continue to enjoy that gross profit leverage and therefore operating profit leverage vis-a-vis revenue on a sort of progressive asymptotic basis.

但话又说回来，当我们观察高质量收入来源，如视频号广告、搜索广告、部分增值金融服务、电商交易费用以及我们自有的游戏时，它们通常增长速度快于整体收入，并且享有显著高于混合毛利率的利润率。因此，我们相信未来将继续享有这种毛利杠杆效应，进而在收入方面实现运营利润杠杆，呈现渐进的渐近效应。

Martin Lau

Of course, AI investment would actually sort of go against that. So you just have to sort of rebalance the two sort of…

当然，AI投资实际上可能会对这一趋势产生一定影响，所以我们必须在两者之间进行再平衡。

James Mitchell

Yeah.

是的。

Martin Lau

I think just to make the full picture clear.

我认为这只是为了让整体情况更加清晰。

Wendy Huang

Thank you. In the interest of time, we will take the last question from Liao Yuan from CITIC Securities.

谢谢。为了节约时间，我们将提最后一个问题，来自中信证券的廖源。

Yuan Liao

Thanks, Wendy. Thanks, management for taking my questions. Congrats for the strong quarter. My question is regarding the AI and AI agent. We have seen many companies release their own large function models in AI agent. Just want to know how our management view the key competitive factors in the future of large language model and what our competitive advantage are? Thank you.

谢谢，Wendy。感谢管理层回答我的问题，祝贺你们取得强劲的季度业绩。我的问题是关于人工智能及其代理。我们看到许多公司发布了自己的大型功能模型作为AI代理。只想了解一下，管理层如何看待未来大型语言模型的关键竞争因素，以及我们的竞争优势是什么？谢谢。

Martin Lau

So what's -- I didn't catch the last part of it. What's the..

所以……我没有听清最后那部分。是什么……

Yuan Liao

Yeah. What is the competitive advantage, because we see a lot of AI agent in the market. So how should we increase the user engagement in the future by adding more features and functions?

是的。竞争优势是什么？因为我们看到市场上有很多AI代理。那么，我们应该如何通过增加更多功能来提高未来的用户参与度？

Martin Lau

I think there is sort of AI -- well, there are many types of AI agents, right? And the AI agent is essentially a model leveraging the model capability and then sort of having connections to different software tools in order for a complex task to be completed, right? It's a pretty general concept and you can have AI agents. On a standalone basis, you can have AI agents living in different apps. And the way we look at it is there will be sort of a multitude of AI agents.

我认为，关于AI代理……实际上，AI代理有很多种，对吧？本质上，AI代理是利用模型能力并通过连接到不同的软件工具来完成复杂任务的一种模型。这个概念相当广泛，你可以拥有各种AI代理。独立运行的情况下，你可以在不同的应用程序中拥有AI代理。我们的看法是，未来将会有大量的AI代理。

But I think, for us, we would be able to build standalone AI agents by leveraging models that are of great quality and at the same time by leveraging the fact that we have a lot of consumers on our different software platforms like our browser, like, Yuanbao over time. But at the same time, right, even within Weixin and within QQ, we can have AI agents. And the AI agents can actually leverage the ecosystem within the apps and provide really great service to our users by completing complex tasks.

但我认为，对我们来说，我们可以借助高质量的模型以及依托我们在不同软件平台上拥有的大量用户（例如我们的浏览器、元宝等），构建独立的AI代理。同时，在微信和QQ内，我们也可以拥有AI代理。这些AI代理实际上可以利用应用内生态系统，通过完成复杂任务为用户提供优质服务。

If you look at Weixin, for example. Weixin has got a lot of users, a very long user time per day, as well as high frequency of users opening up the app. That's one advantage. The second advantage is that if you look at the activities within, Weixin is actually very, very diversified, right? It's not just sort of entertainment, it's not just transactions, it's actually sort of social communication and content.

举个例子，看看微信。微信拥有大量用户，每日使用时长很长，且用户打开应用的频率很高，这是一个优势。第二个优势是，如果你看微信内的活动，其实非常多样化，不仅仅是娱乐，也不仅仅是交易，而是社交沟通和内容。

And a lot of people conduct their work within Weixin, a lot of people conduct their learning within Weixin, and there are a lot of transactions that go through Weixin and there's a multitude of Mini Programs which actually allowed all sorts of different activities to be carried out, right? So you look at the Mini Program ecosystem, we can easily build an agent based on the model that actually can connect to a lot of the different Mini Programs and have activities and complex tasks completed for our users.

很多人在微信中开展工作，很多人在微信中进行学习，还有大量交易通过微信进行，并且有众多的小程序允许各种不同的活动开展，对吧？所以，看看小程序生态系统，我们可以轻松地基于模型构建一个能够连接众多小程序，并为用户完成各种活动和复杂任务的代理。

自动完成的工作更容易在封闭的系统中实现。

So, I think those are all very distinctive advantages that we have. Now, of course, these are experiences that we want to build very carefully. We want to build very patiently so that it would deliver the right experience to the users with a lot of attention to their data security, to their sense of comfort and security, right? So these are the kind of things that we need to pay attention to when we build these products. But over time, I think those are great opportunities for us.

所以，我认为这些都是我们非常独特的优势。当然，这些体验我们需要非常仔细地构建，需要耐心打造，以确保为用户提供合适的体验，同时非常关注他们的数据安全以及舒适和安全感。所以，在构建这些产品时，我们需要注意这些方面。但随着时间的推移，我认为这些对我们来说是巨大的机会。

Wendy Huang

Thank you, Martin. We are now ending the webinar. Thank you all for joining our webinar today. If you wish to check out our press release and other financial information, please visit the IR section of our company website at www.tencent.com. The replay of this webinar will also soon be available. Thank you and see you next quarter.

谢谢，Martin。我们现在结束本次网络研讨会。感谢大家今天的参与。如果您希望查看我们的新闻稿及其他财务信息，请访问我们公司网站的投资者关系板块，网址为www.tencent.com。本次网络研讨会的回放也将很快提供。谢谢，下一季度再见。

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