Tencent Gains As Most Segments Grow Double-Digit, Online Ads Jump

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Tencent Gains As Most Segments Grow Double-Digit, Online Ads Jump
Credit: © Reuters.

By Dhirendra Tripathi

Investing.com – Tencent Holdings (OTC: TCEHY ) stock (HK: 0700 ) closed 0.3% higher in Hong Kong after the Chinese gaming and social media giant presented revenue growth of 20% and profit growth of 13% in the second quarter.

Revenue totaled 138.3 billion yuan ($21.4 billion) in the June quarter, while profit for the period rose to RMB 35.1 billion ($5.4 billion).

The performance came despite a regulatory onslaught in recent weeks that has seen the Chinese authorities strip it of some monopoly rights on music publishing and, this week, issue draft regulations that would severely limit its ability to trap clients within its self-contained Internet ecosystem.

Earlier on Wednesday, China's Ministry of Industry and Information Technology accused Tencent's WeChat messaging service (along with over 40 other apps) of making illegal data transfers and warned the company to make "rectifications".

Revenue from online advertising increased by 23%, reflecting rising demand from categories such as internet services and consumer staples.

Value-added services rose 11% and games revenue jumped 12%, primarily driven by titles like Honor of Kings and Clash of Clans. The gaming operations were criticized by state media as being 'spiritual opium' earlier in the summer, indicating a further source of official displeasure with the company, Tencent has since announced steps to reduce the time and money children spend on games.

Fintech and business services revenue increased by 40% as growth in digital payment transactions carried on, partly also driven by rising digitalization of public services and traditional industries.

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