Tencent Holdings Ltd, the Chinese technology behemoth, demonstrated a strong rebound in revenue growth in Q1 2023, overcoming the repercussions of the COVID-19 crisis and a regulatory clampdown on gaming licenses last year. The company's revenues exceeded analysts' projections, signaling a promising business recovery.
Tencent reported an 11% surge in revenue, reaching 149.98 billion yuan ($21.70 billion), outperforming the anticipated 146.09 billion yuan as forecasted by 17 analysts surveyed by Refinitiv. However, a net profit of 25.83 billion yuan fell short of the predicted 29.67 billion yuan.
Last year, Tencent faced its first-ever annual revenue drop, weighed down by China's now-repealed zero-COVID strategy and a prolonged suspension of gaming licenses that blocked the company from launching new games. However, with the resumption of license approvals last year, Tencent is poised for a robust recovery in 2023. The company unveiled an extensive lineup of games this week, including seven that are set to launch this summer.
The company statement read, "During the first quarter of 2023, we achieved solid revenue growth as our payment volumes benefitted from, and facilitated, domestic consumption recovery, our games revenue improved, and our advertising revenue sustained rapid growth."
The company reported record revenues for two of its flagship games, 'Honour of Kings' and 'CrossFire', thanks to new features and promotional activities. Additionally, newly launched games exhibited strong sales and user growth. Domestic gaming revenue climbed by 6% to 35.1 billion yuan, while international gaming revenue witnessed a 25% rise, reaching 13.2 billion yuan.
Online advertising, another significant revenue source for Tencent, saw a 17% increase, generating 21 billion yuan. Furthermore, the company's fintech and business services segment posted a 14% growth to 48.7 billion yuan, reflecting Tencent's continued expansion in these sectors.
