Chinese tech giant Tencent reported its quarterly results on Wednesday.
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Tencent on Wednesday reported an 11% rise in quarterly revenue, the fastest growth in more than a year, as the company saw a sharp rebound in payments volume, ad sales and games.
Here’s how Tencent performed in the first quarter, compared to Refinitiv consensus estimates:
- income: 150 billion yuan ($21.4 billion), vs. 146.09 billion yuan expected, up 11%% same time last year.
- Profit attributable to equity holders of the Company: 25.8 billion yuan, expected to be 31 billion yuan, a year-on-year increase of 10%.
The result marks a strong rebound for Tencent after consecutive negative growth and flat quarters. In its earnings, the company said it benefited from a solid recovery in domestic consumption in China, which finally began easing its aggressive Covid-19 restrictions in December.
Net profit “grew at a faster pace, reflecting a positive revenue mix shift, operating efficiencies and a relaxed base period,” Tencent said in a Wednesday report.
Investors are focused on whether the reopening of the Chinese economy will boost Chinese tech giants including Tencent. The Chinese economy grew by 4.5% in the first quarter, the fastest growth rate in a year.
China’s tech sector as a whole has faced intense scrutiny and wiped more than $1 trillion in assets from the country’s largest companies as part of a broader regulatory tightening of China’s domestic technology sector that began in late 2020.
But recently, there have been signs that the central government is softening its stance on internet giants such as Tencent, Alibaba and Didi.
In 2021, Chinese regulators froze approval for new video game releases, which hit Tencent hard. Over the past few months, however, Beijing has loosened its grip on the industry, authorizing more releases.
In the face of a more severe domestic game market, Tencent has strengthened its focus on the international market.
Tencent, a major owner and investor in global technology companies, has been reducing some of its equity investments as Beijing remains wary of the size of domestic technology companies.