Tencent Logs 47% Jump in Third-Quarter Profit on Strong Gaming, Ad Growth
Zheng Xutong
DATE:  Nov 14 2024
/ SOURCE:  Yicai
Tencent Logs 47% Jump in Third-Quarter Profit on Strong Gaming, Ad Growth Tencent Logs 47% Jump in Third-Quarter Profit on Strong Gaming, Ad Growth

(Yicai) Nov. 14 -- Chinese tech giant Tencent Holdings said third-quarter profit surged by a better-than-expected 47 percent from a year ago, driven by gains in video gaming and advertising income.

Net profit was CNY53.2 billion (USD7.3 billion) in the three months ended Sept. 30, the Shenzhen-based company’s latest earnings report showed late yesterday. Revenue rose 8 percent to CNY167.1 billion (USD23 billion).

Revenue from value-added services, which is mainly gaming income, climbed 9 percent to CNY82.7 billion, thanks to titles such as PUBG Mobile, Brawl Stars, Valorant, and Honour of Kings. Advertising revenue jumped 17 percent to CNY30 billion (USD4.1 billion) in the quarter, while income from fintech and business services rose 2 percent to CNY53.1 billion (USD7.3 billion).

“We delivered robust revenue growth in our games business, underpinned by consistent performance of evergreen games globally and contributions from new games with evergreen potential,” Chairman and Chief Executive Pony Ma Huateng said in a statement.

Shares of Tencent [HKG: 0700] closed little changed at HKD403.40 (USD51.83) each in Hong Kong today, after earlier gaining by as much as 2.8 percent. The stock has gained more than 37 percent since the end of last year.

The recent integration of Tencent’s mobile payment app WeChat Pay with rival Alibaba Group Holding’s e-commerce platform Taobao is benefiting both parties, though more time is needed to evaluate the full impact of the collaboration, executives said on the firm’s earnings conference call.

In e-commerce, Tencent emphasized its plans for WeChat Shops, a way for vendors to sell products on the WeChat messaging app, which the company sees as the foundation for a broader e-commerce ecosystem within WeChat. WeChat Shops will be integrated with various WeChat features, such as Moments, Search, and Mini Programs, and will offer merchants support for traffic and transactions.

“We'll take a measured approach to building the WeChat Shop ecosystem,” management said, expressing optimism about the long-term potential of e-commerce.

Tencent reported real benefits from the use of artificial intelligence, particularly in recommending content and improving targeted advertising. AI tools should make substantial contributions to revenue, especially in video services, the company said, adding that there is still a lot of room for growth compared with US competitors.

“We are increasingly seeing tangible benefits of deploying AI across our products and operations including marketing services and cloud, and will continue investing in AI technology, tools and solutions that assist users and partners,” Ma noted.

The number of monthly active users on WeChat's China and overseas versions rose 3 percent to 1.38 billion. The number of subscribers to its music services surged 16 percent to 119 million and that to its long-form video services climbed 6 percent to 116 million.

Editor: Kim Taylor

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Keywords:   Tecent,Financial Statements