Tencent reports Q2 profit, revenue jump amid strong gaming unit performance

Tencent Holdings (OTC:TCEHY ) saw its revenue accelerate in the second quarter, driven by the blockbuster summer release of Dungeon & Fighter Mobile, lifting China’s most valuable company out of a slump in its gaming division.

For the April-June period, revenue climbed 8% to 161.1 billion yuan ($22.5 billion), slightly below the projected 161.4 billion yuan. Net income surged to 47.6 billion yuan, topping the expected 39.9 billion yuan.

Tencent’s shares in Hong Kong closed 1.27% lower on Wednesday.

With the Q2 report, the world’s largest games publisher ended two consecutive quarters of declining performance in its gaming segment, thanks to the May release of DnF Mobile in China, produced by Nexon Co.

Tencent’s widely used WeChat app also contributed to growth, boosting ad sales and driving transactions for virtual items and ecommerce through its mini programs and TikTok-style video feed.

DnF Mobile has been topping the grossing game charts in China, with investors hoping Tencent will benefit from its popularity long-term, similar to the success of Honor of Kings.

The company reported that its China games business generated 34.6 billion yuan in revenue during the second quarter, marking a 9% increase year-on-year, up from the 3% growth in the first quarter. In addition to the successful DnF Mobile launch, higher sales from Valorant also contributed, Tencent said.

“DnF Mobile, a newly released game, reactivated millions of IP (intellectual property) fans and is retaining players well, positioning it to become our next evergreen major hit,” Tencent noted in its earnings release.

International games revenue also saw a 9% year-on-year rise, reaching 13.9 billion yuan.

Shares of Tencent, which operates WeChat, have surged more than 27% this year, contrasting with a 10% decline in the Hang Seng Tech Index.

Source: Investing.com