Chinese tech giant Tencent’s net profit spikes amid virus pandemic
Chinese internet giant Tencent posted a dramatic increase in net profit for the first quarter after a surge in demand for their online games, as the coronavirus pandemic has forced people to stay at home.
The firm headquartered in Shenzhen, one of the largest listed on the Hong Kong stock exchange, said net income rose 29 per cent from the previous year to 28 billion yuan ( USD 3.95 billion).
“We are trying to provide online services during this tough time allowing people to stay connected, informed, productive and entertained,” said Ma Huateng, chief executive, in a statement.
“Our businesses have proven resilient and cashflow-generational up to now.”
Although other companies are being battered by the pandemic’s economic fallout, tech firms have seen a high demand for their products.
Tencent is one of the biggest entertainment firms in the world, and the industry has immensely benefited from the billions of people around the world being forced into lockdowns or limited by social distancing regulations.
Online gaming income rose to 37.2 billion yuan up by 31 per cent on-year, Tencent reported.
The group owns globally popular titles such as “Honour of Kings”, “PUBG Mobile” and “Clash of Clans”.
“Peacekeeper Elite,” a less offensive version of “PUBG Mobile” launched last year to comply with the censors of authoritarian China, was also a massive success.
Despite the virus outbreak, sales from internet advertising and software products for the finance sector have held up, rising 32 per cent and 22 per cent respectively in the first quarter, while they remain faced with stiff competition from Alibaba.
Tencent’s shares closed down 0.32 per cent prior to publication of the report.
But since COVID-19 broke out, the firm has earned more than USD 42 billion in market value, Bloomberg News reported, defying a worldwide market crash and a record-breaking Chinese economic slowdown.