On July 8, 2023, Tencent demonstrated its technology at the 2023 World Artificial Intelligence Conference in Shanghai.
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Tencent Second-quarter revenue and profit beat expectations as growth accelerated in its main gaming division.
Here’s how Tencent performed in the June quarter compared to LSEG consensus estimates:
- income: 161.12 billion yuan (US$22.5 billion), compared with expectations of 160.77 billion yuan.
- Profit attributable to shareholders of the company: 47.63 billion yuan, compared with the expected 39.95 billion yuan.
Revenue increased by 8% year-on-year, and profit increased by 82% year-on-year.
After experiencing its first annual revenue decline in 2022, Tencent has been seeking to re-accelerate the growth of its core gaming business.
Investors have rewarded the company so far, with shares up about 27% this year. That’s thanks in part to a new game called DnF Mobile, made by Korean company Nexon and published in China by Tencent.
DnF Mobile has dominated China’s best-selling game rankings, and investors hope Tencent can benefit from its popularity in the coming years, as it did with Honor of Kings.
Tencent said its China gaming business generated revenue of 34.6 billion yuan in the second quarter, a 9% increase from the same period last year. This is faster than the 3% growth in the first quarter of this year. Tencent attributed its performance to the growth in sales of “Valorant” and the “successful launch” of “DnF Mobile.”
Tencent said in its financial report: “The newly released “DnF Mobile” has reactivated millions of IP (intellectual property) fans and retained players well, making it our next evergreen hit game.”
International game revenue also increased by 9% year-on-year to 13.9 billion yuan.
Tencent’s online advertising business generated revenue of 29.9 billion yuan in the second quarter, an increase of 19% year-on-year. The tech giant attributed this to increased video ad revenue on WeChat, China’s largest messaging app owned by Tencent.
Investors have long been excited about Tencent’s ability to monetize videos on its WeChat app, which has more than 1.3 billion users.
Revenue from Tencent’s financial technology and business services unit, which includes cloud computing and WeChat Pay mobile payment capabilities, rose 4% year-on-year to 50.4 billion. Tencent said the growth was weighed down by “a further slowdown in commercial payment revenue growth, reflecting a slowdown in consumer spending.”
