Chinese internet giant Tencent’s profit surged in Q4 2020, with CEO Pony Ma crediting double-digit revenue gains across all business lines to a strategy of focusing on customer value in the face of unprecedented challenges across the whole year.
In an earnings statement, Ma highlighted an extension in Tencent’s lead of the consumer internet sector, citing content enhancements and innovations across its product line for the progress. He also noted advances in an international expansion strategy, led by games.
Despite the challenges of 2020 as a whole, Tencent’s “solid results across all our businesses testify to our focus on user value, technology innovation and business sustainability”.
But there are concerns about whether Tencent will be able to maintain progress, with reports Ma recently met with Chinese competition chiefs prompting speculation the company could be the next target of a broader review of the operations of various tech giants in the country.
Net profit increased 175 per cent year-on-year to CNY59.3 billion ($9.1 billion), due mainly to one-off gains and lower financing costs. Total revenue rose 26 per cent to CNY133.7 billion.
Smartphone games revenue grew 41 per cent to CNY36.7 billion, with international sales rising 43 per cent to CNY9.8 billion fuelled by titles including Peacekeeper Elite, Honor of Kings and PUBG Mobile.
Tencent’s social networks garnered CNY27.9 billion, up 27 per cent, while online advertising grew 22 per cent to CNY24.7 billion on strong demand from categories including education, e-commerce and consumer goods.
Its fintech and business services units grew 29 per cent to CNY38.5 billion, credited to growth in commercial payment and wealth management services.
Monthly active users (MAUs) of messaging service WeChat and Chinese version Weixin increased 5.2 per cent to 1.23 billion; smart device MAUs of IM platform QQ dropped 8.1 per cent to 595 million.
R&D expenses increased 28 per cent to CNY39 billion, representing 8.1 per cent of total revenue.Subscribe to our daily newsletter Back