Tencent quarterly profit rises 35% on new gaming approvals
Second-quarter net profit was 24.14-billion yuan and smartphone gaming revenue rose 26% as China becomes more lenient over new titles
Hong Kong — Tencent Holdings posted a better-than-expected 35% rise in quarterly net profit on Wednesday, as its gaming arm regained growth momentum on a thaw in new approvals by China after a freeze for most of last year.
The world’s largest gaming firm by revenue, in which Naspers has a 31% stake, reported 24.14-billion yuan ($3.44bn) in net profit for the second quarter ended June, compared to an average estimate of 20.74-billion yuan from 13 analysts polled by Refinitiv.
Revenue rose 21% to 88.8-billion yuan, compared to an average forecast of 93.4-billion yuan from 16 analysts.
Smartphone gaming revenue rose 26% to 22.2-billion yuan, helped by major titles including Honour of Kings, Perfect World Mobile, Peacekeeper Elite, as well as new releases.
Tencent said it launched 10 new games in the quarter compared to only one in the previous quarter.
In 2018, Tencent turned in its slowest annual profit growth in 13 years on the suspension in the approval for new games. Approvals restarted in December, with Tencent receiving permission to launch Perfect World Mobile in the January-March quarter.
“FinTech and Business Services”, a new revenue category set up this year that includes payment and cloud services, generated 22.9-billion yuan, up 37%, helped by rapid growth in commercial payment services.
Tencent said in a filing, “Amid the evolving macro-economic and competitive challenges, we continue to invest in enhancing our platforms, services and technologies, for better supporting our users and enterprise customers.”