- Tencent Holdings’ revenue jumps 29% in the fiscal third quarter.
- The Chinese multinational reports £4.45 billion of net profit in Q3.
- The tech conglomerate says advertising revenue is still under pressure.
Tencent Holdings Ltd. (HKG: 0700) said on Thursday that its net profit in the fiscal third quarter posted a massive 89% growth on a year over year basis. The company attributed its hawkish performance to better cost efficiency and robust demand for its gaming business that resulted in higher revenue.
Tencent Holdings Ltd. closed the regular session about 1% up on Thursday. Shares of the company are now trading at £66.55 versus a much lower £38.52 per share in March when COVID-19 restrictions were at their peak. Tencent had started the year at a per-share price of £44. Trading stocks online is easier than you think. Here’s how you can buy shares online in 2020.
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Tencent reports £4.45 billion of net profit in Q3
Tencent said that its net profit in the third quarter came in at £4.45 billion. According to FactSet, experts had forecast a much lower £3.44 billion of profit for Tencent in the recent quarter. A report last week said that Chinese streaming platforms, DouYu and Huya had a entered a merger agreement, mediated by Tencent Holdings.
In terms of revenue, the technology conglomerate recorded £14.47 billion in Q3 that represents a 29% growth as compared to the same quarter last year. In comparison, analysts’ estimate for revenue stood at a lower £14.31 billion. In the prior quarter (Q2), Tencent Holdings had seen a 37% annualised growth in revenue, as per the report published in August.
The Chinese multinational also said in its financial report on Thursday that its upbeat performance in the fiscal third quarter was primarily attributed to its online games business that registered a massive 45% year over year growth in revenue. Online gaming marks the largest source of revenue for Tencent Holdings.
Tencent says advertising revenue is still under pressure
Tencent acknowledged that the economy was pulling out of the impact of the Coronavirus pandemic that has so far infected more than 52 million people worldwide and caused a little under 1.3 million deaths – but warned that advertising revenue was still under pressure, especially from clients in the transportation and tourism-related industries.
Its cloud business, Tencent added, was still seeing hostility due to the COVID-19 crisis as it continues to weigh on new contract sign-ups and delays in project deployment.
At the time of writing, Tencent Holdings has a market cap of £640 billion and a price to earnings ratio of 46.