FILE PHOTO: A Tencent sign is seen during the fourth World Internet Conference in Wuzhen, Zhejiang province, China, December 4, 2017. REUTERS/Aly Song/File Photo
HONG KONG (Reuters) – Tencent Holdings Ltd booked a 17% profit rise for the three months ended March, and revealed it made more revenue from FinTech and business services than smartphones games for the first time as it bore the brunt of regulatory setbacks in its mainstay games business.
The Chinese video gaming leader has been hit by a prolonged freeze in China’s new games approvals since last March, which led to its sharpest-ever profit drop in the December quarter and slowest annual profit growth in 13 years in 2018.
In the quarter just ended, profit rose to 27 billion yuan ($3.93 billion), the company said on Wednesday. That compared with the average estimate of 19.4 billion yuan from 13 analysts polled by Refinitiv.
Revenue grew 16% to 85.5 billion yuan, versus an average forecast of 88.2 billion yuan from 17 analysts.
Tencent attributed the growth to commercial payment services and other FinTech services, social advertising and digital content services.
“FinTech and Business Services”, a new revenue category for which Tencent is disclosing for the first time that includes its payment and cloud services, generated 21.8 billion yuan in the quarter, up 44 percent.
That was more than smartphone gaming revenue, traditionally Tencent’s largest single revenue generator, which fell 2% year-on-year to 21.2 billion yuan due to fewer new games releases.
Reporting by Sijia Jiang; Editing by Himani Sarkar and Christopher Cushing