HONG KONG – Shares of Chinese technology giant Tencent Holdings (HK:0700) surged to their highest level in over three years on Thursday, as investors cheered a stellar second-quarter earnings report that handily beat expectations on the back of robust growth in its gaming and advertising businesses.
The company’s Hong Kong-listed stock rose as much as 2.4% in Thursday trading, reaching its highest point since April 2021. This extended a nearly 5% rally from Wednesday that followed the release of the strong financial results.
For the three months ending June 30, Tencent reported that revenue climbed 15% year-over-year to 184.5 billion yuan ($25.72 billion). The figure surpassed the 178.5 billion yuan forecast by analysts, according to LSEG data.
Profitability was even more impressive, with net profit rising 27% to 55.6 billion yuan, comfortably ahead of the 52.3 billion yuan consensus estimate.
The strong performance was driven by the company’s core segments. Key highlights from the report include:
-
Domestic Gaming Revenue: Grew 17% to 40.4 billion yuan, fueled by the launch of new titles and strong player engagement in existing games.
-
International Gaming Revenue: Jumped an exceptional 35% to 18.8 billion yuan, signaling successful global expansion.
-
Advertising Revenue: Increased 20% to 35.8 billion yuan, which the company attributed to high demand for its AI-powered ad targeting solutions.
Looking ahead, Tencent signaled a major push into artificial intelligence, doubling its capital spending in the quarter to 19.1 billion yuan. The company confirmed that a significant portion of this investment is dedicated to advancing its AI capabilities, including the development of its in-house Hunyuan Turbo S model and fostering partnerships with third-party AI developers.
