Tencent unveiled its technology at the World Artificial Intelligence Conference 2023 in Shanghai on July 8, 2023.
Nurphoto | Nurphoto | Getty Images
Tencent beat second-quarter revenue and earnings estimates as growth accelerated in its key gaming division.
Here's how Tencent performed in the June quarter compared to LSEG consensus estimates:
- Revenue: 161.12 billion Chinese yuan (22.5 billion US dollars) compared to expected 160.77 billion yuan.
- Profit attributable to shareholders of the company: 47.63 billion Chinese yuan compared to expected 39.95 billion yuan.
Sales increased by 8% compared to the previous year, while profits increased by 82%.
After suffering its first revenue decline in 2022, Tencent sought to accelerate growth in its core business, gaming.
Investors have rewarded the company so far, with shares up about 27 percent this year, thanks in part to excitement over a new game called Dungeon & Fighter Mobile (DnF Mobile), produced by South Korean company Nexon and distributed in China by Tencent.
DnF Mobile dominates the charts of top-grossing games in China and investors hope that Tencent can capitalize on its popularity in the coming years, as it did with Honor of Kings.
Tencent said its Chinese gaming business brought in revenue of 34.6 billion yuan in the second quarter, up 9% year-on-year. That was faster than the 3% growth in the first quarter of the year. Tencent attributed the performance to increased sales from Valorant and the “successful launch” of DnF Mobile.
“DnF Mobile, a newly released game, has reactivated millions of IP (intellectual property) fans and is maintaining player numbers well, giving it the best chance of becoming our next big long-running hit,” Tencent said in its earnings release.
International gaming revenue also rose 9% year-on-year to 13.9 billion yuan.
Tencent's online advertising business posted revenue of 29.9 billion yuan in the second quarter, up 19 percent year-on-year. The tech giant attributed this to higher revenue from video advertising on WeChat, China's largest messaging app, which is owned by Tencent.
Investors have long been excited about Tencent's opportunity to make money from videos on the WeChat app, which has more than 1.3 billion users.
Tencent's fintech and business services division, which includes cloud computing and the mobile payment function WeChat Pay, reported a 4% year-on-year increase in revenue to 50.4 billion. Growth was held back by “a further slowdown in growth in commercial payment revenue, reflecting low consumer spending,” Tencent said.
Comments are closed.