► Revenues hit CNY 108 billion (the equivalent of around USD 15.2 billion), up 26% year-on-year. Expectations were around CNY 101 billion.
► Online game revenues surged 31% YoY in the first quarter of 2020.
Chinese social media and gaming giant Tencent posted better-than-expected results after the months-long coronavirus lockdown in China. Users turned to their cellphones to reach entertainment and communication services during the COVID-19 period, the firm's first-quarter financial filings of 2020 revealed.
Tencent's (0700:HKEX) revenues from value-added services and fintech services increased by 27% to CNY 62.4 billion and by 22% to CNY 26.4 billion respectively for the first quarter of 2020 on a year-on-year basis. The results have beaten Refinitive's total revenue consensus of CNY 101.4 billion.
The firm's value-added services revenues are mostly from gaming. Tencent said that an increase in revenues from blockbuster online games Peacekeeper Elite and Honour of Kings was partly offset by the lower revenues from PC client games such as DnF.
Online game revenues grew by 31% to RMB 37,298 million, the statement showed. Another major component of the VAS segment is social media revenues, which were up 23% to CNY 25,1 billion. It was mostly driven by contributions from in-game virtual item sales as well as digital content services, including music streaming and video streaming subscriptions, the firm said.
Tencent, a company with massive divergence in its revenue streams, has long been venturing into other businesses such as healthcare, communication infrastructure and education: yet this earnings statement has mostly proved the resilience of the firm's entertainment arm.
WeChat and QQ enabled Tencent users to keep connected with their families during the lockdown period, the firm boasted of, and "average time spent increased at double-digit percentages on a year-on-year basis," the statement added.
The firm's shares were straining towards a two-year high on May 14 Thursday after the results.