Tencent has reported total revenue reached 89 billion yuan ($25 billion) for the second quarter, after increasing 21% year on year.
The Chinese technology giant’s operating profit for the same period came in at 27.5 billion yuan, an increase of 26% from the same period last year.
“During the second quarter, we sustained solid user, revenue, and profit growth, and executed on key initiatives amid the challenging business environment,” Tencent CEO and chairman Ma Huateng said.
Revenues from the company’s FinTech and Business Services increased by 37% to 23 billion yuan for the second quarter, which the company added was mainly driven by revenue growth from commercial payment and cloud services.
During the period, the company’s wealth management platform LiCaiTong grew its aggregated customer assets to over 800 billion yuan as of the end of the second quarter.
“[This] indicates trend that our users are increasingly keeping their money within our payment system. This trend brings down the frictional costs for users to use Weixin Pay, reducing our withdrawal fee revenue and bank charge expenses,” the company said.
“We believe the overall impact will contribute to the vitality of our FinTech business in the long run. We remain focused on risk management of our FinTech businesses to sustain our long-term platform growth.”
Of its total revenue during the quarter ending 30 June 2019, the company said its value-added services (VAS) revenues increased by 14% on a year-on-year basis to 48 billion yuan.
Online games revenues grew by 8% to 27 billion yuan, with Tencent attributing the growth primarily to the revenue gain from smartphone games, including existing titles such as Honour of Kings PUBG MOBILE and Red Alert OL, and recently launched titles such as Perfect World Mobile. This helped offset the company’s decline in revenues from PC client games that dipped 9% year-on-year to 11.7 billion yuan.
Meanwhile, Tencent’s social networks revenues saw a 23% uplift in social networks revenues to 21 billion yuan. The company said it mainly reflected higher revenues from digital content services where fee-based VAS subscriptions grew 10% year-on-year to 168.9 million, due mainly to video subscriptions count hitting 96.9 million, a 30% year-on-year lift.
Read also: How China tried and failed to win the AI race: The inside story (TechRepublic)
Video streaming subscriptions proved particularly popular during the streaming of the 2018-19 NBA season that saw 490 million online users in China watch one or more games on Tencent’s platform, nearly triple the number that was recorded during the 2014-2015 NBA season.
“Our partnership did not only increase fans engagement, brand power and monetisation capability for the NBA, but also reinforced Tencent Sports as the top Internet destination for sports fans in China, contributing to our advertising and subscription revenues,” the company said.
Looking ahead, Huanteng said amid macroeconomic and competitive challenges, the company will continue to support users and enterprise customers through investments in platforms, services, and technologies.
Earlier this year, the company announced its largest-ever executive redundancy axing 10% of its senior managers as part of the company’s recent restructure.
Tencent’s streaming services are also expected to be blocked in Taiwan as the nation prepares for a presidential election in 2020, with the Taiwanese government expressing concerns the site will spread propaganda and a pose a threat to national security.
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