Is this the worst year for Tencent?
INTERNATIONAL - Tencent Holdings’ quarterly earnings beat estimates, boosted by gains on investments, giving shareholders much-needed assurance the Chinese gaming behemoth is bound for a revival.
Net income rose 17percent to 27.21billion yuan (R56.38bn) in the three months ended March, compared with the 19.4bn yuan average of analysts’ estimates. Revenue climbed 16percent, about a third of the pace a year earlier and the slowest since its 2004 listing.
Tencent is recovering from a brutal 2018. Last week, China’s largest social media company finally unveiled a viable entry in the Battle Royale genre, a red-hot arena it’s been shut out of since Beijing suspended game approvals last year.
Now that regulators are again green-lighting titles, investors are counting on the worst being over as the company invests in video and news personalisation to win back users from Bytedance. “Missing consensus top-line estimates is not ideal, but the bright spot is growth came where it mattered - in games, which is their most profitable segment,” said Vey-sern Ling, an analyst at Bloomberg Intelligence.
“The 11percent sequential jump in mobile game sales bodes well for the sustained recovery of the business over 2019, especially with the addition of new games.” The profit was boosted by 11.1bn yuan of gains, including adjustments for fair value of investee companies, it said.