Tencent Holdings, the Chinese videogame and social-media company, announced impressive second-quarter financial results with a 41% increase in net profit. The recovery across various business lines, particularly online advertising, contributed to this remarkable performance.
Net profit soared to CNY26.17 billion ($3.59 billion) compared to CNY18.62 billion in the same period last year. However, this figure fell short of analysts’ expectations, who, according to S&P Global Market Intelligence, estimated a net profit of CNY33.44 billion.
In terms of revenue, Tencent witnessed an 11% rise to reach CNY149.21 billion.
It is worth noting that the Covid-19 pandemic and its associated restrictions negatively impacted advertising spending and commercial payment activities in the previous year.
Gross profit from Tencent’s online advertising business recorded an outstanding 62% growth, amounting to CNY12.24 billion. This impressive growth was driven by a 34% increase in revenue, which reached CNY25.00 billion.
Moreover, gross profit from the game and social-network business also experienced a notable increment of 10% to reach CNY40.045 billion. Revenue in this segment increased by 3.5% to CNY74.21 billion. Additionally, revenue from Tencent’s domestic game business remained relatively stable at CNY31.8 billion compared to the previous year. Meanwhile, the number of monthly active user accounts for the Weixin and WeChat social-media apps grew by 2.2% to 1.33 billion as of the end of June.
Lastly, the fintech and business-services segment also saw significant growth, with gross profit rising by 33% to CNY18.665 billion and revenue increasing by 15% to CNY48.635 billion.
These positive financial results demonstrate Tencent’s resilience and success in navigating through challenging times successfully.
