Advertisement
Tencent
TechBig Tech

Tencent posts better-than-expected US$3.4 billion second-quarter profit on payments, games

  • Revenue from games and social media businesses rose 14 per cent to 48 billion yuan in the second quarter
  • The internet giant expects the macroeconomic environment to remain difficult for the rest of the year

Reading Time:4 minutes
Why you can trust SCMP
0
Chinese internet giant Tencent Holdings posted a 35 per cent increase in second-quarter net profit, lifted by revenue from payment services and smartphone games. Photo: Simon Song
Iris DengandCelia Chen

Tencent Holdings, operator of China’s biggest video games and social media businesses, warned that macroeconomic challenges will persist this year even as the company beat estimates to report a 35 per cent increase in quarterly profit.

The Shenzhen-based company reported a net profit of 24.1 billion yuan (US$3.4 billion) in the quarter ended June 30, up from 17.9 billion yuan in the same period last year, boosted by revenue growth from its payment services and hit smartphone games. That was ahead of the 21.1 billion yuan consensus estimate from 14 analysts surveyed by Bloomberg.

Revenue increased 21 per cent to 88.8 billion yuan, up from 73.7 billion yuan a year ago, but was below analysts’ consensus estimate of 93.4 billion yuan.

“During the second quarter, we sustained solid user, revenue and profit growth, and executed on key initiatives amid the challenging business environment,” said Pony Ma Huateng, Tencent’s chairman and chief executive, in a statement on Wednesday. “We have widened merchant adoption for our mobile payment services, contributing to rapid growth in average transaction and total payment volume.”

Tencent’s latest quarterly financial results showed that efforts to put its video games business back on track are paying off, following a roller-coaster year for the company in 2018 that wiped out almost half of its value at one point.

Advertisement