Tencent beats estimates with 21b yuan profitBusiness | Stella Zhai and Bloomberg 16 May 2019
Tencent (0700) recorded a non-GAAP net profit of 20.9 billion yuan (HK$23.9 billion) in the first quarter excluding non-cash items and the impact of acquisition transactions.
Net income of the online game giant rose 17 percent to 27.21 billion yuan in the three months ended March, compared with the 19.4 billion-yuan average of analysts' estimates while revenue climbed 16 percent, about a third of the pace a year earlier and the slowest since its 2004 listing.
Tencent is recovering from a brutal 2018. Last week, China's largest social media company unveiled a viable entry in the Battle Royale genre, a red-hot arena it's been shut out of since Beijing suspended game approvals last year. Now that regulators are again green-lighting titles, investors are counting on the worst being over as the company invests in video and news personalization to win back users from its rival Bytedance.
The company recorded US$20 million (HK$156 million) revenue from its iOS version of mainland mobile game, Game for Peace - the reformed version of PlayerUnknown's Battlegrounds - in the first five days of its launch.
Tencent announced results from its fledgling fintech division, which includes not only WeChat Pay mobile service but also operations from cloud computing to wealth management. The unit expanded revenue 44 percent year on year to 21.8 billion yuan in the March quarter.
"Our payment, other fintech services and cloud businesses, while still at an early stage of expansion, are now generating substantial revenues," said chief executive Pony Ma Huateng.
Revenue from the Value Added Services unit, which includes online games and messaging, rose only 4.5 percent to 49 billion yuan. Online advertising revenue surged 25 percent to 13.4 billion yuan, but that was down from previous years as the economy slowed and the business gained scale. WeChat had 1.11 billion monthly active users at the end of March, an increase of 6.9 percent from a year earlier, while the mobile version of QQ had 700.4 million users at the end of the quarter.
Shares increased 0.92 percent to HK$374 yesterday before the announcement.