The Mobile Internet Report Key Themes*

Tencent – Virtual Goods Leadership in China Has Driven
$35B in Wealth Creation Over 11 Years
2001 2002 2003 2004 2005 2006 2007 2008 2009E
Revenue ($MM) $7 $39 $108 $168 $210 $412 $562 $1,052 $1,803
Y/Y Growth -- 436% 179% 56% 25% 96% 36% 87% 71%
Virtual Goods (IVAS) $0 $6 $34 $65 $116 $268 $370 $723 $1,391
Mobile (MVAS) $6 $29 $69 $94 $76 $103 $119 $206 $268
Advertising $1 $3 $5 $8 $17 $39 $73 $121 $139
Other $0 $1 $1 $1 $1 $1 $1 $2 $5
Operating Income ($MM) $2 $21 $49 $69 $71 $171 $240 $477 $877
Margin (%) 21% 54% 46% 41% 34% 42% 43% 45% 49%
Active Users (MM) 22 49 68 108 168 217 266 338 446
Revenue per User ($/yr) $0 $1 $2 $2 $1 $2 $2 $3 $4
Market Capitalization ($B) -- -- -- $1 $2 $6 $14 $12 $35
Market Cap per User ($) -- -- -- $10 $11 $29 $51 $34 $78
Note: Tencent became a publicly-listed company on 6/16/04. Virtual goods revenue reported as IVAS (Internet Value-Added
Services) revenue; Mobile revenue reported as MVAS (Mobile Value-Added Services) revenue. Active users are averages of
number of active QQ accounts during the year. Market capitalization data are year-end values per FactSet, 2009E data as of
12/05/09. Revenue and Op. Income data assume constant exchange rate 1USD = 6.8RMB. Source: comScore, FactSet, Tencent, 392
Morgan Stanley Research.