Tencent’s revenue growth is back on track
Chinese Internet giant Tencent (TCEHY) reported its fourth-quarter results yesterday. The company’s revenue grew 28% YoY (year-over-year) to 84.9 billion Chinese yuan ($12.4 billion) during the quarter after four consecutive quarters of decelerating YoY growth. Tencent’s net profit fell 32% YoY to 14.2 billion yuan ($2.1 billion) due to a one-off investment expense related to the company’s attempt to diversify from gaming, which is seeing restrictive regulations in China.
Tencent’s social networks continue to gain traction
Tencent said that its messaging app, WeChat, along with its local version, Weixin, reached a monthly active base of 1.098 billion users at the end of last year. Meanwhile, its QQ app reached a monthly active base of 807 million as it added AI-powered features to engage younger users.
WeChat’s mobile wallet, WeChat Pay, saw robust adoption. Merchants’ monthly use of the app grew ~80% YoY. Although Tencent’s gaming revenue, which the company depends heavily on, was flat YoY, its cloud and financial technology businesses compensated for that stagnation. We’ll look at those businesses next.