Themis Qi
Tencent’s (0700) third-quarter revenue rose 10 percent yearly to 154.6 billion yuan (HK$166.7 billion), in line with market estimates, thanks to games sales recovering in mainland China and an extended demand for online advertising.
Net profit fell 9 percent to 36.2 billion yuan from a year ago, but beat market expectations of 34.6 billion yuan.
The adjusted net profit jumped 39 percent 44.9 billion yuan, above estimates, pushing up shares of Tencent’s major investor Naspers by 5.6 percent and its own stock by 4.8 percent to HK$322.6 in Hong Kong.
For the three-months ended September, the tech giant reported a 5 percent climb to 32.7 billion yuan for video game sales in mainland China, versus a “stable income” in the previous quarter. Honor of Kings, Tencent’s flagship mobile game, saw its income rebound this past quarter.
Two new games also helped, said Tencent, with the market showing signs of recovery after a regulatory crackdown placed an eight-month freeze on licenses for new games and imposed playtime restrictions on minors in the past few years.
With the income from overseas markets jumping 14 percent to 13.3 billion yuan, the revenue of value-added services rose by 4 percent year-on-year to 75.7 billion yuan. But VAS contributions shrank to 49 percent in the third quarter from 52 percent one year ago.
Online advertising remained a growth driver, with income rising by 20 percent to 25.7 billion yuan in the third quarter. Tencent attributed this to “robust demand for video accounts” inside WeChat, a world-leading instant messaging mobile application along with significant growth in local services and fast-moving consumer goods.
Fintech and business services posted a 16 percent rise to 52 billion yuan for the quarter, driven by increased commercial payment activities and higher revenue from wealth management services, restructured cloud services and higher e-commerce technology fees within Video Accounts.
Tencent said it is upgrading its own artificial intelligence model, Tencent Hunyuan – using it for in-house products and making it available for enterprise customers.
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https://hongkongnewshk.com/tencent-revenue-rises-10pc-on-games-market-recovery/
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