Tencent today posted a rise in revenue and profit for the first quarter as global coronavirus lockdowns boosted demand for its blockbuster mobile games.
The Chinese tech conglomerate posted revenue of 108bn yuan (£12.4bn) in the first three months of the year — up 26 per cent year on year.
Profit attributable to equity holders increased six per cent over the period to hit 28.9bn yuan.
The upbeat figures were driven by bumper trading in Tencent’s online games business, which accounts for more than a third of the company’s revenue.
This part of the business grew 31 per cent in the first quarter to 37.3bn yuan as gamers flocked to smartphone favourites such as Peacekeeper Elite and Honour of Kings.
Tencent said the increase was mainly driven by a rise in in-game spending as people turned to video games for entertainment during the Covid-19 pandemic.
However, the company warned the surging in-game consumption was only temporary and would likely return to normal levels once people went back to work.
“During this difficult period, we seek to provide online services that keep people connected, informed, productive, and entertained,” said Tencent chairman and chief executive Ma Huateng.
“So far, our businesses have proved resilient and cashflow-generative, enabling us to increase our investment to fulfill our mission of Tech for Good.”
Tencent also secured a sharp increase in revenue from online advertising, which was up 32 per cent year on year to 14.5bn yuan.
This was largely driven by increased social media advertising spend as Tencent enjoyed surging demand for its social media platform Wechat, which also carries so-called health codes that allow people in China to travel during the outbreak.
The social media boost offset a 10 per cent decline in traditional media revenue amid a wider squeeze on the global ad market.
“The decrease was primarily due to lower revenues from our video and news platforms as a result of weak macroeconomic conditions and suspension of sports events,” the company said.
Revenue from Tencent’s fintech and business services, which includes payment services through social media network Wechat, rose 22 per cent to 26.5bn yuan.
Per Roman, co-founder and managing director of GP Bullhound, hailed a “blow-out” quarter for the Chinese tech giant.
“We had high expectations in advance but feel they were exceeded overall. It will continue to be a core holding in our public portfolios,” he said.