Tencent has exceeded expectations in the second quarter, showcasing impressive growth in its key gaming division. Revenue came in at 161.12 billion Chinese yuan, surpassing the expected 160.77 billion yuan. Moreover, profit attributable to equity holders of the company reached 47.63 billion Chinese yuan, outperforming the anticipated 39.95 billion yuan.
Following a challenging period of revenue decline in 2022, Tencent has made significant efforts to reaccelerate growth in its core gaming operations. This push has been well-received by investors, with shares showing a 27% increase this year. Notably, the introduction of the new game, Dungeon & Fighter Mobile (DnF Mobile), has sparked excitement. Produced by South Korean firm Nexon and distributed in China by Tencent, DnF Mobile has rapidly climbed the top grossing game charts in China.
Tencent reported a 9% year-on-year revenue increase in its China games business, reaching 34.6 billion yuan in the second quarter. This growth rate surpassed the 3% seen in the previous quarter. The company attributed this success to heightened sales from games like Valorant and the successful launch of DnF Mobile. Tencent highlighted the potential of DnF Mobile, stating that it has reactivated millions of intellectual property fans and is on track to become the next major hit for the company.
International games revenue also saw a notable 9% rise compared to the previous year, reaching 13.9 billion yuan. Additionally, Tencent’s online advertising business generated 29.9 billion yuan in revenue in the second quarter, marking a 19% year-on-year increase. This growth was primarily driven by increased revenue from video advertising on WeChat, China’s largest messaging app owned by Tencent.
Tencent’s fintech and business services division, which includes cloud computing and WeChat Pay mobile payments feature, experienced a 4% year-on-year revenue increase to 50.4 billion yuan. The growth, however, was impacted by a slowdown in commercial payment revenue growth due to subdued consumption spending trends.
Tencent’s second-quarter performance showcases the company’s resilience and strategic initiatives to drive growth across its key business segments. With a strong focus on its gaming division, international expansion, online advertising, and fintech services, Tencent continues to strengthen its position as a leading tech conglomerate in the global market. Investors are closely monitoring Tencent’s trajectory, particularly with the promising outlook for games like DnF Mobile and the potential for further monetization of WeChat’s massive user base.