Tencent today said the coronavirus outbreak had driven a huge surge in usage for its social media platform Wechat.
The Chinese tech giant said Wechat had racked up 8bn visits since February as people logged in to access so-called health codes that allow them to travel during the outbreak.
It came as Tencent posted fourth quarter profit of ¥21.6bn (£2.6bn), an increase of 52 per cent year on year. However, this was behind analysts’ forecasts of ¥22.9bn, according to data from Refinitiv.
Revenue rose 25 per cent to ¥105.8bn in the last three months of the year, marking the company’s fastest revenue growth since late 2018.
Tencent said the coronavirus outbreak had caused some customers to delay cloud projects, but said it expected an increase in demand over the long-term as businesses gear up for remote working.
Tencent’s online gaming business posted a 25 per cent increase in revenue thanks to the success of mobile titles such as Peacekeeper Elite and PUBG Mobile.
Revenue at the firm’s fintech and business services arm, which includes payments through Wechat, surged 39 per cent to just under ¥30bn.
Advertising also jumped 20 per cent over the quarter, mainly driven by social media campaigns. This offset a 24 per cent fall in media advertising revenue, which the company blamed on uncertain broadcast schedules and fewer sports events.
Analysts warned the conglomerate’s advertising revenue could be impacted in the upcoming quarter as brands cut back spending.
“The anticipated positivity in Tencent’s financial performance is, in a large part, down to the combination of an unprecedented number of young Chinese gamers being confined to their homes for the first three months of 2020,” said Richard Downey, senior vice president at The Specialist Works.
He also said Tencent, which is the world’s largest gaming company, had benefitted from a relaxation of regulation after Beijing imposed a nine-month ban on licences for new online games in 2018.
It came a day after Tencent’s music subsidiary said it would likely see “much softer” first-quarter revenue growth as the outbreak was impacting licensing and advertising revenue.
Shares in Hong Kong-listed Tencent closed down 4.5 per cent.