China's Tencent profit surges 89per cent as it rides gaming boom

China's Tencent profit surges 89per cent as it rides gaming boom

Chinese gaming and social media giant Tencent Holdings Ltd reported on Thursday a forecast-beating 89per cent rise in quarterly profit, boosted by video games and advertising businesses. The world's largest gaming firm by revenue booked a 38.5billion yuan (US$5.8 billion) profit for the three months throughSeptember. That was ahead of an analyst average estimate of 30.81 billion yuan, according to data from Refinitiv.

FILE PHOTO: Logo of Tencent is seen at its booth at the 2020 China International Fair for Trade in
FILE PHOTO: A logo of Tencent is seen at its booth at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang

HONG KONG: Chinese gaming and social media giant Tencent Holdings Ltd reported an 89per cent rise in quarterly profit on Thursday, with its blockbuster game Honour of Kings and solid advertising businesses helping it to beat forecasts and lifting its shares. The world's largest gaming firm by revenue has benefited from healthy growth of paying users for video games in China and international markets.

Its flagship game Honor of Kings reported a record 100 million daily active users in the first 10 months of 2020.

Tencent made 38.5 billion yuan (US$5.8 billion) profit for the three months through September. That was ahead of an analyst average estimate of 30.81 billion yuan, according to data from Refinitiv. Revenue rose 29per cent to 125.4 billion yuan.

The Chinese group has a solid pipeline of new games waiting to be released, including a recent testing launch of a mobile version of League of Legends in Asia.

The company also saw a return to normalcy in advertising activity following the COVID-19 outbreak, with rapid growth in sectors such as education, internet services and e-commerce platforms.

Its shares closed 4.72per cent up, against a 0.22per cent decline in the Hang Seng index.

They rebounded from a 7per cent plunge on Wednesday - when Tencent celebrated its 22nd birthday - as investors dumped shares in Chinese tech companies following publication of draft anti-monopoly rules that also wiped out hundreds of billions of dollars off some tech giants including Alibaba.

Tencent said revenue from its cloud and other business services, a potential future growth engine, were affected by the lingering impact of the pandemic, such as delays in project deployment and new contract sign-ups.

"The year-on-year revenue growth rate was therefore lower than previous quarters, which we expect to be temporary in nature," Tencent said.

(Reporting by Pei Li; Editing by David Evans and Emelia Sithole-Matarise)

Source: Reuters

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