Tencent profit up 89% despite US crackdown

By GT staff reporters Source: Global Times Published: 2020/11/13 0:37:43

Tencent's logo File photo: IC

Despite the disruption from the Trump administration's WeChat ban, Tencent Holdings on Thursday reported third-quarter net profit of 38.54 billion yuan, beating market expectations of 30.81 billion yuan. The figure was up 89 percent year-on-year from 20.38 billion yuan. WeChat also saw growth in the number of its global users with monthly active accounts in the third quarter reaching 1.21 billion.

Experts said that it was thanks to the digitalization trend during the pandemic, which has led to booming demand for internet services. The company also saw growth for its gaming and music operations. 

WeChat now has a total of 1.21 billion monthly active users, up from last year's 1.15 billion.

The gaming sector saw total revenue of 41.42 billion yuan, up from 28.6 billion yuan last year and internet advertising saw total revenue of 21.35 billion yuan, up from 18.37 billion yuan.

Meanwhile, Tencent's music business revenue came to 7.58 million yuan (non-audited), up 16.4 percent compared with the same period last year, but lower than previous expectations, according to the report.

More and more customers are using corporate WeChat as a communication tool at work, resulting in more than 100 percent year-on-year growth in their daily active accounts, according to the company's public report on Thursday, noting that Tencent Conference, the company's video communication solution, has more than 100 million registered users. 

Driven by the demand, the number of paid-for value-added service accounts increased 25 percent year-on-year to 213 million.

The company's growth is going against the trend of the US government's relentless crackdown on WeChat on the basis of a threat to national security, which has been rejected by US judges.

In the latest move in October, the Ninth Circuit Court of Appeals in the US rejected a US Department of Justice request to immediately ban Apple and Google from offering Tencent's WeChat for download in US app stores. 

The panel of the court said the US government had not demonstrated it would "suffer an imminent, irreparable injury during the pendency of this appeal, which is being expedited."

Liu Dingding, an independent tech analyst, told the Global Times that the US revenue for Tencent is less than 1 percent, and there is no need to pay too much attention to US sanctions.

Given that the major proportion of its business is in China, Tencent can easily ignore the US, Liu said.

Posted in: COMPANIES

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