Tencent Beats Forecasts as Revenue Surges 48% in First Quarter

WeChat parent Tencent Holdings has achieved a 48 per cent increase in revenue during the first quarter of this year.

Revenue from Smartphone games, payment-related services, digital-content subscriptions and sales, and social advertising were key contributors overall growth in the three months to March 31.

Operating profit grew by 59 per cent and operating margin was 42 per cent, up three percentage points year-on-year, while profit attributable to shareholders increased by 61 per cent.

Tencent says the number of monthly active users (MAU) on smart devices was up by 2.4 per cent year-on-year to 694.1 million and smart-device MAU for users aged 21 years or below also increased year-on-year as it enriched chat features and entertainment-driven content appealing to young consumers.

Tencent’s online advertising business achieved 55 per cent revenue growth.

“For media advertising, revenues grew by 31 per cent year on year. Within that, video ad revenues increased 64 per cent due to more pre-roll ads benefiting from the growth in video views, and our enhanced capability to develop creative ad formats within original productions.”

Other businesses grew revenues by 111 per cent, driven by its payment-solutions business and related financial services, as well as cloud services.

“The growth in our payment solution business was mainly contributed by the rapidly increasing offline commercial transaction volumes and consumer cash withdrawal fees.”

Digital content viewers grow

Total fee-based value-added services subscriptions grew by 24 per cent to 147 million, primarily driven by video- and music-streaming services.

“We strengthened user engagement of our video platform, where the number of daily active users and per-user time spent on mobile grew rapidly. Mobile daily video views increased by more than 60 per cent, driven by the premium-quality content from our self-commissioned and licensed productions. Total video revenues were up 75 per cent year on year.”

Tencent said its investment in self-commissioned content enhanced Tencent Video’s user engagement, helping increase conversion-to-subscription rates and subscriber-retention rates. Video subscription revenues grew by 85 per cent year on year.