Tencent bosses confident of tapping China growth

Chinese internet giant Tencent registered double-digit profit growth in the final quarter of 2022, led by gains in online advertising and international games, though its social networks and fintech businesses slowed.

Chairman and CEO Pony Ma explained in its earnings statement increases in efficiency, a sharpened focus on core activities, and new services and revenue lines positioned it capitalise on recovery in China’s economic growth.

He said Tencent was ready to “benefit from and contribute to” the nation’s growth, “which our users’ activity suggests is now underway”.

On an earnings call, president Martin Lau noted Tencent is gearing up for a global expansion in gaming. He said it navigated industry challenges in its domestic market and is “now well positioned for reigniting growth”.

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Net profit grew 19 per cent year-on-year to CNY29.7 billion ($4.4 billion) and total revenue was flat at CNY145 billion.

Social networks revenue decreased 2 per cent to CNY28.6 billion due to declines in music- and games-related live streaming services offsetting increases in video and its music subscription service.

International games sales increased 5 per cent to CNY13.9 billion, though the figure was 11 per cent higher when excluding forex and an adjustment related to Supercell in late 2021.

Domestic games revenue fell 6 per cent to CNY27.9 billion, attributed to lower gross cash receipts in the previous quarters.

Online ad revenue rose 15 per cent to CNY24.7 billion.

Fintech and business services revenue fell 1 per cent to CNY47.2 billion on continued Covid-19 (coronavirus) impacts.

Combined monthly active users of messaging service WeChat and Chinese version Weixin increased 3.5 per cent to 1.3 billion, and 3.6 per cent to 572.1 million on its QQ mobile messaging platform.