Tencent posts 175 per cent rise in fourth-quarter profit, as it faces tighter scrutiny from Chinese regulators and seeks new growth opportunities
- Tencent’s fourth-quarter profit beat estimates by 80 per cent, reaching US$9.1 billion
- The tech giant’s continued growth faces increasing challenges in its home market, where regulatory scrutiny is hitting its gaming and financial services empire
The Shenzhen-based company’s net profit reached 59.3 billion yuan (US$9.1 billion) in the three months ended December, up from 21.6 billion yuan during the same period in 2019 and 80 per cent above analyst estimates, according to Bloomberg data.
Total revenue rose 26 per cent to 133.7 billion yuan, from 105.8 billion yuan a year earlier, slightly ahead of the consensus estimate of 133.1 billion yuan by 22 analysts, according to Bloomberg data.
The company, which runs the world’s largest video games business and China’s biggest social media operation, said its profit for the full year was up 71 per cent, reaching 159.8 billion yuan in 2020, higher than the 130.2 billion yuan consensus estimate. Total revenue in 2020 grew 28 per cent for the year to 482.1 billion yuan, beating the 481 billion yuan estimate by 53 analysts polled by Bloomberg.
The tech giant’s shares fell 0.8 per cent on Wednesday ahead of the earnings announcement amid a declining market, closing at HK$623.50 (US$80.30). Tencent has lost HK$1.42 trillion in market value since its January 25 peak, more than the GDP of Algeria, pushing back Tencent’s prospects of becoming the first Asian company to reach a US$1 trillion valuation.
Tencent founder and CEO Pony Ma Huateng emphasised the company’s expansion in industrial internet and cloud services and in gaming overseas.