China’s Tencent marks return to revenue growth in first quarter

By Josh Ye

HONG KONG (Reuters) -China’s Tencent Holdings (OTC:) Ltd posted a 11% rise in first-quarter revenue on Wednesday, beating analyst expectations, as its core advertising and gaming businesses recovered from COVID-19-related disruptions a year earlier.

The world’s largest video game company and operator of the WeChat messaging platform said revenue reached 149.98 billion yuan ($21.70 billion) for the three months ended March 31.

That compared with the 146.09 billion yuan average of 17 analyst estimates compiled by Refinitiv.

Net profit rose 11% to 25.83 billion yuan, versus a 29.67 billion yuan average analyst estimate.

Tencent posted its first annual revenue decline last year, hit hard by the country’s now-abandoned zero-COVID policy as well as a months-long freeze on gaming licences by regulators that prevented it from releasing new games.

But it is likely heading for a rebound this year after the government resumed licence approvals late last year. The firm unveiled a long pipeline of games on Monday including seven titles ready to go online this summer.

Domestic gaming revenue gained 6% to 35.1 billion yuan while international gaming revenue rose 25% to 13.2 billion yuan.

Tencent also saw revenue from online ads rose 17% to 21 billion yuan.

Revenue from fintech and business services grew 14% to 48.7 billion yuan as the firm continued to expand in those areas.

($1 = 6.9121 renminbi)