Tencent Soars 5.8% After Earnings Defy Expectations
Liao Shumin
DATE:  Nov 15 2018
/ SOURCE:  Yicai
Tencent Soars 5.8% After Earnings Defy Expectations Tencent Soars 5.8% After Earnings Defy Expectations

(Yicai Global) Nov. 15 -- Shares of Tencent Holdings, whose stock price has slumped this year, surged 5.8 percent today after the Chinese tech giant reported significantly better-than-expected earnings for the third quarter.

Profit soared 30 percent to CNY23.3 billion (USD3.4 billion) in the three months ended September from a year earlier, the Shenzhen-based company said yesterday after the market closed. Revenue rose 24 percent to CNY80.6 billion, which beat expectations despite being the slowest gain in almost three years.

Tencent closed at HKD288.40 (USD36.83) on the Hong Kong Stock Exchange.

Strong revenue from social media adverts and one-time gains, including from Tencent's stake in recently listed Meituan Dianping, helped buoy earnings, while the firm's gaming business struggled amid a clampdown on licensing for new video games since August and tighter restrictions to curb addictive gaming among minors. At CNY25.8 billion, the gaming division contributed 4 percent less than last year to the company's income.

Profit attributable to shareholders rose 15 percent to CNY19.7 billion.

Advertising revenue, which made up one-fifth of the total, climbed 47 percent to CNY16.2 billion. Contributions from social media ads, such as WeChat Moments and the platform's mini-programs, soared 61 percent. Takings from commercials on traditional media such as television, including variety shows on Tencent Video, rose 23 percent to CNY5.1 billion.

WeChat, a lifestyle app that bundles the many functions of Western apps like Instagram, PayPal and Uber, had 1.1 billion monthly active users, which was 11 percent more than last year. The average daily transaction volume of Tencent's payment business increased over 50 percent, as payments to offline merchants doubled.

Two new businesses also helped to drive performance. Tencent's wealth management platform Licaitong had CNY500 billion in funds, a 67 percent jump since last year when it was incorporated, mostly attributable to the inclusion of pension funds to its products.

Since the firm restructured its shared data storing and artificial intelligence operations into two new units in October, revenues for cloud services have doubled to CNY6 billion.

Editor: Emmi Laine

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Keywords:   TENCENT,Game,Tencent Cloud