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Chinese gaming and social media giant Tencent Holdings Ltd reported an 89% rise in quarterly earnings on Thursday, which beats forecasts, driven by the video game and advertising businesses. The world’s largest gaming company by revenue posted a profit of 38.5 billion yuan (US $ 5.8 billion) for the three months through September. That was ahead of an average analyst estimate of 30.81 billion yuan, according to Refinitiv data.
FILE PHOTO: A Tencent logo is seen on its booth at the 2020 China International Trade in Services Fair (CIFTIS) in Beijing, China on September 4, 2020. REUTERS / Tingshu Wang
HONG KONG: Chinese gaming and social media giant Tencent Holdings Ltd reported an 89% increase in quarterly earnings on Thursday, with its hit game Honor of Kings and strong ad companies helping it beat forecasts and raise its Actions. The world’s largest gaming company by revenue has benefited from the healthy growth of users paying for video games in China and international markets.
Its flagship game, Honor of Kings, reported a record 100 million daily active users in the first 10 months of 2020.
Tencent made 38.5 billion yuan ($ 5.8 billion) in profit for the three months through September. That was ahead of an average analyst estimate of 30.81 billion yuan, according to Refinitiv data. Revenue increased 29 percent to 125.4 billion yuan.
The Chinese group has a strong portfolio of new games waiting to be released, including a recent trial launch of a mobile version of League of Legends in Asia.
The company also saw a return to normal in advertising activity following the COVID-19 outbreak, with rapid growth in sectors such as education, Internet services, and e-commerce platforms.
Its shares closed 4.72 percent higher, compared to a 0.22 percent drop in the Hang Seng index.
They rebounded from a 7 percent drop on Wednesday, when Tencent celebrated its 22nd birthday, when investors dumped shares of Chinese tech companies following the publication of a draft antitrust rules that also erased hundreds of billions of dollars of investment. some tech giants, including Alibaba.
Tencent said that revenues from its cloud and other business services, a potential engine for future growth, were affected by the lingering impact of the pandemic, such as delays in project implementation and signing new contracts.
“Therefore, the annual growth rate of revenue was lower than that of the previous quarters, which we expect to be temporary in nature,” Tencent said.
(Reporting by Pei Li; Editing by David Evans and Emelia Sithole-Matarise)
