Chinese tech major Tencent reported earnings on Wednesday with revenues up 20% and 23% to CNY 138.3bn ($21.4bn) and CNY 273.6bn ($42.3bn) for Q2 and H1 respectively. Revenue growth for the quarter was driven by:

  • Games, up 12% to CNY 43bn ($6.6bn) led by games such as Honour of Kings, PUBG Mobile, Valorant, Clash of Clans and Moonlight Blade Mobile
  • FinTech and Business Services, up 40% to CNY 41.9bn ($6.45bn) led by an increase in digital payment transactions.
  • Online Advertising, up 23% to CNY 22.8bn ($3.5bn) that reflects increased demand from advertisers from internet services and consumer staples coupled with consolidation of Bitauto’s ad revenues
On an IFRS basis, Q2 operating profits came in at CNY 52.5bn ($8.1bn), up 34% and net profits at CNY 43bn ($6.7bn), up 33% over 2Q2020. The company reported free cash flow of CNY 17.3bn, down 39% over 2Q2020 and a net debt position of CNY 21bn ($3.2bn). Q2 saw the slowest growth of quarterly revenues since early 2019, reflecting the impact of Beijing’s crackdown on tech companies. The company sounded an alarm with regards to further regulatory curbs that can be expected from Beijing.

Tencent’s 3.575% 2026s traded 0.15 points lower to 109.292 while its longer-dated 3.24% 2050s traded 0.3 points higher to 99.17.


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