Tencent’s fourth-quarter earnings
As we discussed in the previous article, Tencent (TCEHY) reported a sharp fall in its fourth-quarter earnings. In this article, we’ll dig deeper into the company’s fourth-quarter earnings results.
Tencent’s value-added service revenue climbed 9% year-over-year in the fourth quarter. However, its online gaming revenue was similar to its level in the corresponding period in 2017.
Tencent’s social network revenue rose 25% in the quarter. The company said, “The increase mainly reflected growth in revenues from digital content services such as live broadcast services and video streaming subscriptions.” Its online ad revenue also expanded quickly in the quarter.
According to Tencent, “Revenues from our other businesses increased by 72% to RMB24,212 million for the fourth quarter of 2018 on a year-on-year basis. The increase mainly reflected higher revenues from our FinTech and cloud services, as well as film and television production business.”
According to Bloomberg, quoting Mirabaud Securities analyst Neil Campling, “Given that China has now restarted the game approval process we should expect to see accelerating growth for smartphone games going forward.” According to Tencent’s president, Martin Lau, the company is currently working with regulators to get approval for PlayerUnknown’s Battlegrounds. It also has to monetize Fortnite.
Electronic Arts (EA) launched Apex Legends, a competitor to Fortnite, earlier this year. The initial response to the game was better than what Fortnite received.
Read Wall Street Weighs In on Gaming Stocks in March to see how analysts are rating gaming stocks this month.