Tech giant Tencent reports a sharp rise in third-quarter net profit

Chinese tech giant Tencent posted a 47% year-on-year rise in third-quarter net profit on Wednesday, thanks to what it described as a “robust growth” of its gaming activities. Based in the southern metropolis of Shenzhen, the group, which specializes in video games, also owns the WeChat application (messaging, online payment, social networking), present on almost all smartphones in the country.

Tencent’s sales were up 8% year-on-year, at 167.2 billion yuan (over 21.8 billion euros) for the July-September period, according to a company statement to the Hong Kong Stock Exchange. “In the third quarter of 2024, we delivered robust revenue growth in our games business, underpinned by steady performance from timeless games and contributions from new games with sustainable potential.”said the company.

The group also reported a net profit of 53.2 billion yuan (over 6.94 billion euros), compared with 36.18 billion yuan (4.72 billion euros) last year, a jump of around 47%. Tencent’s results are expected to be followed this week by those of other tech giants JD.com and Alibaba, all of which are being closely watched by investors looking for signs of improvement in Chinese domestic consumption.

Sluggish demand

Demand remains sluggish in China, due to the lack of stimulus measures deemed sufficient, against the backdrop of a property market in crisis and rising youth unemployment, as the world’s second-largest economy still struggles to recover from the strict zero-Covid policy abolished at the end of 2022. Added to this is a stricter regulatory environment, following Beijing’s 2020 crackdown on the technology sector, which imposed tighter monitoring of competition and personal data processing, after years of relative leniency.

Since 2021, Chinese authorities have also imposed a strict weekly limit of three hours of online gaming for minors under the age of 18 to curb addiction among the youngest. But Tencent, one of the world’s biggest game creators, has recently been looking to strengthen its presence in the promising field of artificial intelligence (AI), following in the footsteps of other Chinese tech giants such as Baidu, Huawei, Alibaba or ByteDance (owner of TikTok and Douyin). Wednesday’s press release states that “is increasingly seeing the tangible benefits of deploying AI.”adding that its investment in technology will continue.

source

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top