The powerhouse company on Wednesday reported revenues increased by 26% year on year to $15.3 billion (RMB108 billion), and net profits up to $4.15 billion (RMB29.4 billion), in the January to March quarter. Using another measure of profits favored by tech companies, earnings rose from $2.95 billion (RMB20.9 billion) to $3.82 billion (RMB27.1 billion).
By either measure, and also in terms of revenue, the group’s numbers were better than had been forecast, according to a poll of financial analysts. Prior to the results announcement, Tencent’s Hong Kong-traded shares closed 0.3% down at HK$429.6 apiece.
“(The figures show) solid quarterly operating and financial metrics, demonstrating the resilience of our business model and the platform value of our company,” Tencent said in a statement. “Looking forward, we expect in-game consumption activities to largely normalize as people return to work, and we see some headwinds for the online advertising industry.”
Crisis has made consumers turn to online solutions for more goods, services and entertainment. And Tencent’s social media platforms were at the heat of that. Its WeChat app grew users by 8% to 1.20 billion.
Entertainment subscriptions grew even faster: total video subscriptions rose 26% year-on-year to 112 million and music subscriptions grew 50% year-on-year to 43 million. And, in order to see off upcoming rivals, it strengthened short-form video content, driving user traffic and consumption of short-form video across WeChat/Weishi, news feeds and in-app mini programs. Content highlights included Chinese anime and drama series, such as “The Land of Warriors Season 3” and “Sansheng Sanshi Pillow.”