Tencent Holdings’ revenues increased by 29% in the third quarter of the financial year.
The Chinese multinational reported a net profit of £4.45 billion in the third quarter.
The technology company says advertising revenues are still under pressure.
Tencent Holdings Ltd. (HKG: 0700) said on Thursday that its third quarter net profit for the fiscal quarter showed a massive 89% year-on-year growth. The company attributed its fighting performance to improved cost efficiency and robust demand for its gaming business, which resulted in higher revenues.
Tencent Holdings Ltd. closed its regular meeting on Thursday with an increase of approximately 1%. The company’s shares are now trading at £66.55, compared to a much lower price of £38.52 per share in March when COVID-19 restrictions peaked. Ten percent started the year at £44 per share. Trading shares online is easier than you might think. Learn how to buy shares online in 2020.
Tencent reports a net profit of £4.45 billion in the third quarter
Tencent said his third quarter net profit was £4.45 billion. According to FactSet, experts had predicted a much lower profit of £3.44 billion for Tencent in the last quarter. Last week’s report said that the Chinese streaming platforms DouYu and Huya had signed a merger agreement through Tencent Holdings.
In terms of revenue, the technology conglomerate recorded £14.47 billion in the third quarter, representing 29% growth over the same quarter last year. In comparison, analysts’ revenue estimates were lower at £14.31 billion. In the previous quarter (Q2), Tencent Holdings had reported annualized revenue growth of 37%, according to the report released in August.
The Chinese multinational also said in its financial report on Thursday that its positive performance in the third quarter of the financial year was primarily due to its online gaming business, which saw massive year-on-year revenue growth of 45%. Online gambling is the largest source of revenue for Tencent Holdings.
Tencent says advertising revenues are still under pressure
Tencent acknowledged that the economy is recovering from the effects of the coronavirus pandemic, which has so far infected more than 52 million people worldwide and caused just under 1.3 million deaths, but warned that advertising revenues are still under pressure, especially from customers in the transport and tourism industries.
His cloud business, Tencent added, is still experiencing hostility due to the COVID 19 crisis, as it continues to suffer from new contracts and delays in project rollout.
At the time of writing, Tencent Holdings has a market capitalization of £640 billion and a price-to-earnings ratio of 46%.