China’s Tencent posts 11% jump in quarterly revenue — the fastest growth in more than a year

Tencent reported an 11% jump in quarterly revenue Wednesday, marking its fastest growth in more than a year, as the company saw a big rebound in payment volumes, ad sales and gaming.

Here’s how Tencent did in the first quarter, versus Refinitiv consensus estimates:

• Revenue: 150 billion Chinese yuan ($21.4 billion) vs. 146.09 billion yuan expected, a rise of 11%% year-on-year.
• Profit attributable to equity holders of the company: 25.8 billion yuan vs. 31 billion yuan expected, a rise of 10% year-on-year.

The results mark a strong bounce back to growth for Tencent after a succession of negative and flat quarters. The company said in its earnings that it benefited from a solid recovery in domestic consumption in China, which finally began easing its aggressive Covid-19 restrictions in December.

Net profit “increased at a faster pace, reflecting a positive revenue mix shift, operational efficiencies, and an easy base period,” Tencent said in the report Wednesday.

Investors were focusing on whether the reopening of China’s economy will give a boost to the country’s tech giants, including Tencent. China’s economy grew 4.5% in the first quarter, the fastest pace in a year.

The Chinese tech industry as a whole faced intense scrutiny as part of a broader regulatory tightening on China’s domestic technology sector that began in late 2020 and wiped off more than a combined $1 trillion from the country’s biggest companies.

But more recently, there have been signs the central government is softening its stance toward internet titans like Tencent, Alibaba, and Didi.

In 2021, Chinese regulators froze the approval of new video game releases, which badly impacted Tencent. However, over the past few months, Beijing has loosened its grip on the industry greenlighting more titles for release.

Amid a tougher gaming market at home, Tencent has boosted its focus on international markets.

Tencent, which is a major owner of and investor in tech businesses worldwide, has been shedding some of its equity investments as Beijing remains on high alert about the size of domestic tech companies.