Friday , May 24 2019

Tencent’s profit tops estimates, reassuring skittish investors

Bloomberg

Tencent Holdings Ltd’s quarterly earnings beat estimates, boosted by gains on investments, giving shareholders much-needed assurance the Chinese gaming behemoth is bound for a revival.
Net income rose 17 percent to 27.21 billion yuan ($4 billion) in the three months ended in March compared with the 19.4 billion-yuan average of analysts’ estimates. Revenue climbed 16 percent, about a third of the pace a year earlier and the slowest since its 2004 listing.
Tencent’s recovering from a brutal 2018. China’s largest social media company finally 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 personalisation to win back users from Bytedance Ltd.
“Missing consensus top-line estimates is not ideal, but the bright spot is growth came where it mattered — in games, which is their most profitable segment,” said Vey-sern Ling, an analyst at Bloomberg Intelligence. “The 11 percent sequential jump in mobile game sales bodes well for the sustained recovery of the business over 2019, especially with the addition of new games.”
The profit was boosted by 11.1 billion yuan of gains, including adjustments for fair value of investee companies, it said.
Shares of Tencent rose 0.9 percent in Hong Kong before earnings were announced. The stock has gained 19 percent this year, compared with a 28 percent rise for New York-listed rival Alibaba Group Holding Ltd Shares of Naspers rose more than 1 percent in Johannesburg.
Revenue from the Value Added Services unit, which includes online games and messaging, rose just 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, Tencent said.

About Admin

Check Also

China surveillance tycoons lose billions as US tensions rise

Bloomberg Escalating tensions between Washington and Beijing are wiping billions from the net worth of ...

Leave a Reply

Your email address will not be published. Required fields are marked *