Chinese social media and games giant Tencent announced a 64% surge in profits for the first six months of the year. Net profits hit $4.84 billion, on revenues that were up 57% at $15.7 billion.
The group said that its value-added services grew their revenues by 43% to RMB36.8 billion ($5.49 billion). That definition covers music video and games subscribers, which were up in number by 12% to 118 million.
“Successful licensed drama serials and self-commissioned variety shows boosted user engagement and advertising revenue for our video platform,” the company said. Media advertising revenues were up 48%, reflecting more ads served to casual users of Tencent Video and to users of its news products.
Its ubiquitous WeChat (aka Weixin) social media platform claimed 963 million users, an increase of 20%. That figure exceeds the official number of Internet users in China, and points to WeChat becoming increasingly internationalized.
The company has recently come under fire for the addictive nature of its online games – it had to introduce time limits on young players of its “Honor of Kings” game – and for not doing enough to police comments and user-generated content.
But the company’s reach into so many aspects of daily life in China – from ride hailing, to booking a dental appointment and payment systems – means that most commentators expect it to weather most storms. “Tencent, as the largest mobile ecosystem by traffic in China, has far-reaching monetization potential as incremental ad budget moves to mobile,” Karen Chan, an analyst at Jefferies, said in a recent note.
Tencent shares dipped 5% last Friday when the Chinese government said it was launching a probe into infringing content carried by the country’s three major social-media platforms. But Tencent recovered quickly on Monday, and in trading on the Hong Kong Stock Exchange ahead of the results announcement Wednesday, its shares climbed 1.4% to HK$323.20. That gives the company a market capitalization of HK$3.07 trillion, or US$396 billion.