Chinese technology conglomerate Tencent Holdings Ltd. reported a 29% rise in profits during the second quarter, resulting in a net profit for the three months through June totaling 42.6 billion yuan. This profit far exceeds the average Refinitiv estimate of 34.4 billion yuan.
Total revenue for the period surged by 20% to 138.3 billion yuan, in line with analysts’ expectations, while Tencent’s mobile gaming sales rose by 13%.
While a strong increase in profit over the last three-month period, this is still a slower pace of growth than the gaming and social media giant experienced at the start of the coronavirus pandemic. This is because of the online gaming surge that began as coronavirus lockdowns were enforced.
These results provide a source of comfort to anxious investors, who remain wary of the Chinese authorities’ strict monitoring of tech companies, which includes the implementation of heavy regulatory restrictions.
As a result of this scrutiny, Tencent was previously barred from entering into numerous exclusive rights agreements which included the blocking of Tencent’s $5.3 billion merger with DouYu International Holdings Ltd and Huya Inc just last month.
As a result, Tencent was temporarily unseated as Asia’s biggest company by chipmaker TSMC at the start of this week. Since facing regulatory scrutiny, Tencent has committed itself to compliance and risk management.
