Tencent unveiled its technology on the World Artificial Intelligence Conference 2023 in Shanghai on July 8, 2023.
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Tencent beat second-quarter revenue and earnings estimates as growth accelerated in its key gaming division.
Here’s how Tencent performed within the June quarter in comparison with LSEG consensus estimates:
- Revenue: 161.12 billion Chinese yuan (22.5 billion US dollars) in comparison with expected 160.77 billion yuan.
- Profit attributable to shareholders of the corporate: 47.63 billion Chinese yuan in comparison with expected 39.95 billion yuan.
Sales increased by 8% in comparison with the previous 12 months, while profits increased by 82%.
After suffering its first revenue decline in 2022, Tencent sought to speed up growth in its core business, gaming.
Investors have rewarded the corporate to date, with shares up about 27 percent this 12 months, thanks partly to excitement over a brand new game called Dungeon & Fighter Mobile (DnF Mobile), produced by South Korean company Nexon and distributed in China by Tencent.
DnF Mobile dominates the charts of top-grossing games in China and investors hope that Tencent can capitalize on its popularity in the approaching years, because it did with Honor of Kings.
Tencent said its Chinese gaming business brought in revenue of 34.6 billion yuan within the second quarter, up 9% year-on-year. That was faster than the three% growth in the primary quarter of the 12 months. Tencent attributed the performance to increased sales from Valorant and the “successful launch” of DnF Mobile.
“DnF Mobile, a newly released game, has reactivated millions of IP (intellectual property) fans and is maintaining player numbers well, giving it the best chance of becoming our next big long-running hit,” Tencent said in its earnings release.
International gaming revenue also rose 9% year-on-year to 13.9 billion yuan.
Tencent’s internet advertising business posted revenue of 29.9 billion yuan within the second quarter, up 19 percent year-on-year. The tech giant attributed this to higher revenue from video promoting on WeChat, China’s largest messaging app, which is owned by Tencent.
Investors have long been enthusiastic about Tencent’s opportunity to earn a living from videos on the WeChat app, which has greater than 1.3 billion users.
Tencent’s fintech and business services division, which incorporates cloud computing and the mobile payment function WeChat Pay, reported a 4% year-on-year increase in revenue to 50.4 billion. Growth was held back by “a further slowdown in growth in commercial payment revenue, reflecting low consumer spending,” Tencent said.
