Social Media Connectivity Lifts Profits 40% at China’s Tencent

The power of social media platforms to connect consumers with content helped China’s Tencent massively outpace China’s slowing economy.

The company saw revenues up by 48% in the six months to June, and profits hit $3.04 billion, an increase of 43%.

The powerhouse performance was driven by social and media platforms, games, digital content, advertising and payment services. And it comes despite paying heavily for content including “Game of Thrones” and NBA basketball. The reporting period ended before Tencent’s $10 billion acquisition of games company Supercell from SoftBank could kick in.

Tencent’s QQ messaging platform claimed 899 million monthly active users, while the newer WeChat (Weixin) was up 34% to 806 million. Peak concurrent users on QQ hit 247 million.

Social media led a 25% increase in subscribers paying for music, movies, games and other value added services. Social media also drove mobile advertising, up 60%in the period. Brand display advertising was up 41% at a time when the Chinese economy has slowed to growth in the region of 6%.

In another post reporting period move, Tencent has merged its QQ Music business with the two rival platforms of China Music Corporation that it acquired last month. Its interim statement made no reference to the proposed takeover of Uber China by Tencent’s unconsolidated ride hailing subsidiary Didi Chunxing, also announced in recent weeks.

The half year report also highlighted progress in “reinforcing our online video business’ upstream presence via further investing in film/TV series studios and in our own production projects.”

The announcement was made Wednesday after the end of trading on the Hong Kong Stock Exchange. Tencent’s shares were down 1.2% at HK$193 on the day, giving a market capitalization of US$236 billion (HK$1.83 trillion.)

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