Tencent Holdings’ earnings rise 89 percent after Honor of Kings launch
Chinese gaming and social media giant Tencent reported an 89 percent rise in quarterly earnings on Thursday, with its hit game Honor of Kings and strong ad companies helping it beat forecasts and lift its shares. The world’s largest gaming company by revenue has benefited from the healthy growth of users paying for video games in China and international markets.
Your flagship game Honor of kings reported a record of 100 million daily active users in the first 10 months of 2020.
Tencent made a profit of CNY 38.5 billion (approximately Rs. 43,400 crore) for the three months to September. That was ahead of an average analyst estimate of CNY 30.81 billion (roughly Rs. 34.7 billion rupees), according to data from Refinitiv. Revenue increased 29 percent to CNY 125.4 billion (approximately Rs 1.41.3 billion).
The Chinese group has a strong portfolio of new games waiting to be released, including a recent trial launch of a mobile version of League of Legends in Asia.
The company also saw a return to normality in advertising activity following the COVID-19 outbreak, with rapid growth in sectors such as education, Internet services and electronic commerce platforms.
Its shares closed 4.72 percent higher, compared to a 0.22 percent drop in the Hang Seng index.
They rebounded from a 7 percent drop on Wednesday, when Tencent celebrated its twenty-second birthday, as investors ditched shares in Chinese tech companies following the release of draft antitrust rules that also wiped out hundreds of billions of dollars of investment. some tech giants, including Alibaba.
Tencent said that revenues from its cloud and other business services, a potential engine for future growth, were affected by the lingering impact of the pandemic, such as delays in project implementation and signing new contracts.
“The annual growth rate of revenue was therefore lower than in previous quarters, which we expect to be temporary in nature,” Tencent said.