Tencent Holdings Ltd., the Chinese maker of the world’s most popular video games, reported its second quarter (Q2) net profits increased by 37 percent, beating market predictions as demand soared as a result of stay-at-home orders from COVID-19.
While revenue from online games, one-third of total sales, swelled 40 percent in Q2, gaming was not the only factor that contributed to Tencent’s double-digit growth from April through June.
Revenues from FinTech and business services grew by 30 percent to $4.3 billion in Q2. The increase from cloud services used by internet companies and the public sector contributed to the year-over-year revenue growth.
The company said it expanded presence in emerging sectors such as healthcare, education, and meetings and exhibitions, to help clients in their digital transformation. On technology and infrastructure, Tencent said it is adopting custom-made equipment, building and expanding its data centers to enhance the performance and optimize the cost of cloud services going forward.
Tencent was also helped in Q2 by its commercial payment and wealth management businesses, which grew users and business scale, driving FinTech revenue up year on year and quarter on quarter.
During the quarter, merchant demand for Tencent’s payment solutions increased, especially from the retail and restaurant sectors. As a result, the number of average daily transactions and value per transaction for commercial payments both grew year on year.
The world’s largest gaming firm reported revenue totaled $4.8 billion from April through June, ahead of an average analysts’ estimate of $3.9 billion, according to data from Refinitiv, the New York-based global provider of financial market data.
“Since the beginning of this year, the COVID-19 pandemic has swept the world, disrupting our daily work and life routines,” said Tencent Chairman and CEO Ma Huateng in a statement. “During this challenging time, we utilized our platforms and technologies to help users adapt to the new normal via online tools, to support enterprises in conducting digital upgrades, and to broadly contribute to economic recovery.”
The latest financial picture of Tencent comes days after President Donald Trump issued executive orders banning TikTok and Tencent’s WeChat app. The bans are expected to take effect on Sept. 15.
While India, Australia and other countries have already prohibited TikTok, the order against Tencent was unexpected.
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