Tencent Holdings Ltd has reported that its profit for the first quarter jumped 17%, with most of the revenue coming from its Fintech and business services.
The latter is even more interesting as it means that the fintech sector has trumped the conglomerate’s smartphone gaming sector. This, however, reportedly comes on the back of a tough year in which the company had to bear the impact of regulatory setbacks that hit its gaming business.
Tencent is the leading video game company in China, commanding a considerable share of the market. The company has however had to wither the impact of a year-long freeze that has seen China not approve any new games since March last year.
The move by authorities saw the video game giant post its sharpest-ever drop in quarterly profits in the fourth quarter results announced last December. It is also the reason the tech giant realized its slowest year-on-year profit growth in almost 13 years.
In the last quarter, the company’s profits rose to hit 27 billion yuan (approximately $3.93 billion). In its results released on Wednesday, Tencent said that the profit beat a comparative average estimate put at 19.4 billion yuan given by a group of 13 analysts. Research firm Refinitiv conducted the poll.
The firm’s revenue also grew by 16%, reported at 85.5 billion yuan. The average forecast given by about seventeen analysts was 88.2 billion yuan.
According to the firm, most of the growth was a result of bigger moves in the sectors of fintech, commercial payment services, social advertising as well as in digital content.
Tencent said that its new “FinTech and Business Services,” which is an altogether new revenue category for the company, generated over 21.8 billion yuan. That represented a growth of 44% in revenue from the firm’s payment and cloud services platforms.
Revenue from the new Fintech and Business Services category, therefore, was almost twice that generated from the smartphone video games category. The latter generated revenues of 21.2 billion yuan, 2% lower on year-on-year returns.