- Wednesday, October 16, 2024
Tencent Holdings, the Chinese videogame and social-media company, has announced a 9.4% decrease in net profit for the third quarter. The dip in profits is attributed partly to the absence of special gains from asset sales that were recorded in the previous year. However, despite this decline, Tencent's games, advertising, and fintech businesses remain strong.
For the three months ended September 30, net profit dropped to CNY36.18 billion ($4.99 billion) from the previous year. This figure exceeds the estimated CNY32.47 billion by Visible Alpha's analysts.
In the same period last year, Tencent benefited from gains obtained through asset disposals and revaluation of certain invested companies.
Tencent's third-quarter revenue showed a 10% year-on-year increase, reaching CNY154.625 billion.
The company's gross profit from its games and social-network business rose by 12% compared to the previous year, amounting to CNY42.045 billion. Revenue also increased by 4.2%, totaling CNY75.75 billion. Additionally, international-game revenue surged by 14% to CNY13.3 billion, while domestic-game revenue saw a 5% rise to CNY32.7 billion.
During the same period, social-network revenue remained relatively steady at CNY29.7 billion, with a 2% increase in the number of monthly active user accounts for Weixin and WeChat social-media apps, reaching 1.34 billion by the end of September.
Gross profit from Tencent's online advertising business experienced a significant boost, increasing by 35% to CNY13.45 billion, while revenue soared by 20% to CNY25.72 billion. This growth can be attributed in part to the high demand for video ads.
Furthermore, the company's fintech and business-services segment witnessed a remarkable 43% rise in gross profit, totaling CNY21.31 billion. Revenue in this segment also increased by 16% to CNY52.05 billion, driven by increased commercial payment activities and higher revenue from wealth management services.
The drop in net profit did not dampen Tencent's operational strength in its key businesses. Moving forward, the company is well-positioned to continue its success in the gaming, advertising, and fintech sectors.
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