Chinese tech titan Tencent said that it generated 125.4 billion yuan (US$18.9 billion) in revenue for the third quarter of 2020, marking a 29% increase from 97.2 billion yuan (US$14.7 billion) during the same period last year.
Photo credit: Tencent
The company’s value-added service, which includes comprising online games and social networks, contributed more than half of the total revenue. It yielded 69.8 billion yuan (US$10.5 billion) over Q3, jumping by 38% from 50.6 billion yuan (US$7.6 billion) on a year-on-year basis.
Tencent’s online games revenue grew by 45% to 41.4 billion yuan (US$6.3 billion), while the social networks revenue reached 28.4 billion yuan (US$4.3 billion), going up by 29% from 2019.
The company said that the large growth in online games was due to a rise in paying users in China and international markets. One of their smartphone games that did well for the company was Honor of Kings. The game, which has been in the market for five years, had exceeded 100 million average daily active users for the first 10 months of 2020.
Tencent’s fintech and business services unit accounted for 26% of its total revenue. This division’s revenue grew to 33.3 billion yuan (US$5 billion), which was mainly due to higher revenues from commercial payment and wealth management.
However, the unit’s revenue growth also slowed down because of the pandemic’s impact on offline project development and new contract sign-ups, as well as non-recurring adjustments, the company said in a statement.
On the other hand, 17% of the Chinese internet giant’s total revenue came from its online advertising business. This unit raked in 21.4 billion yuan (US$3.2 billion), growing by 16% compared to Q3 last year. The increase was mainly driven by the wider adoption of its algorithmic advertisement buying solutions as well as demand from education, internet services, and ecommerce platforms.
Meanwhile, Tencent recorded 38.5 billion yuan (US$5.8 billion) in profits attributable to shareholders in Q3, skyrocketing by 89% from 20.4 billion yuan (US$3.1 billion) during the same period in 2019.
“This quarter marked the second anniversary of our strategic organization upgrade, which was intended to enhance our strength in consumer internet and extend our presence to industrial internet,” said Ma Huateng, Tencent’s chairman and CEO, in a statement.
“While the upgrade was designed to bear fruit over the longer run, we are already seeing initial benefits in areas such as consolidating our advertising services, rejuvenating our product and content platforms, growing our cloud and software-as-a-service businesses, and building an internal open-source code base,” he added.
Currency converted from Chinese yuan to US dollar: US$1 = 6.62 yuan.
Edited by Collin Furtado and Eileen C. Ang
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