While China’s Tencent reported lower-than-expected net profits in its fourth quarter earnings, some of its emerging businesses have seen significant growth. The company revealed that its Q4 net profit declined 32 percent to ¥14.2 billion ($2.1 billion USD), falling below analysts’ prediction of ¥18.3 billion. The decline was due to expenses for its portfolio companies and non-gaming investments.
However, there was plenty of good earnings news, with WeChat and its local version Weixin hitting almost 1.1 billion monthly active users, and WeChat’s eWallet boasting a daily transaction volume of more than 1 billion last year. In fact, merchants that used WeChat Pay on a monthly basis grew more than 80 percent year over year (YOY).
“Payment is one of the key infrastructure platforms of the company, enabling us and our merchant partners to complete transactions for online and offline services,” according to the report. “We extended our market leadership as the leading mobile payment platform by active users and number of transactions in China.”
The company noted a first-of-its-kind, cross-border, mobile payment service launched last year, which enables WeChat Pay Hong Kong users to conduct RMB-denominated transactions funded by Hong Kong dollars, with the transaction volume of WeChat Pay Hong Kong increasing more than 10 times YOY. In addition, there was the launch of WeChat Pay Malaysia in August.
“Globally, we are expanding our footprint by supporting China outbound travelers to make cross-border payments in overseas destinations, and we now offer real-time tax refund services for Weixin Pay users in over 80 airports. Weixin Pay is now available in 49 markets outside Mainland China, supporting cross-border payment transactions in 16 currencies,” the report added.
Tencent also saw its Q4 earnings net profit (excluding non-cash items and M&A deals) increase 13 percent to ¥19.7 billion, while quarterly revenue rose 28 percent to ¥84.9 billion, beating expectations.
In addition, Q4 advertising revenue went up 38 percent due to ad inventory growth on WeChat, with advertisements making up 20 percent of quarterly revenues. Social network revenues rose 25 percent due to growth in live streaming and video subscriptions, comprising 22.9 percent of total revenues. Tencent reported 89 million subscribers in the latest quarter, beating out its main rival Baidu iQiyi’s, which has 87.4 million.