Chinese tech giant Tencent Holdings Ltd.’s profits soar in 2nd quarter

BEIJING—Chinese internet giant Tencent Holdings Ltd. reported a 35-per-cent increase in second-quarter net profit, enjoying a boost from the release of popular new video games, reports Shan Li of the Wall Street Journal. (https://www.wsj.com/articles/tencents-profit-rises-35-as-new-games-hit-market-11565777387?mod=hp_lista_pos4)

Tencent, the world’s largest gaming company, said Wednesday that its net profit for the April-June period rose to 24.1 billion yuan ($3.4 billion) from 17.9 billion yuan a year ago. Analysts polled by FactSet expected second-quarter net profit of 22.2 billion yuan.

The tech giant largely unknown outside China was founded by Ma Huateng, otherwise known as Pony Ma, in 1998. In the intervening 20 years, he has remained at the helm.

The company operates the ubiquitous WeChat, a mobile application that has no peer in the United States. It is part messaging system — voice, video, and text — part ride-hailing, part micro-social media, part payment systems. The app has over one billion followers.

It was reported recently that the Shenzhen-based company was in talks to acquire a 10-per-cent stake in the Universal Music Group – the label behind Lady Gaga, Ariana Grande and Bruce Springsteen – from French conglomerate Vivendi for $3.36 billion U.S. (https://www.scmp.com/business/markets/article/3022344/now-good-time-buy-tencent-stock-momentum-online-gaming-advertising)

For nine months last year, Beijing froze game approvals, harming new releases, and only resumed issuing licences in December 2018. After missing out on the first three rounds of new approvals, Tencent said one of its new releases in May, Peacekeeper Elite, exceeded 50 million daily active users in its first two months of release.