Tencent sees profit jump, may benefit from coronavirus

HONG KONG: Chinese internet giant Tencent recorded a jump in profit last year and said it could be a rare beneficiary of the global coronavirus pandemic as people stay home and businesses ramp up remote working. The Shenzhen-based behemoth, one of the largest stocks on the Hong Kong bourse, said yesterday net profit last year rose 19 percent to 93.3 billion yuan ($13.3 billion).

Total revenues in 2019 were up 21 percent at 377.3 billion yuan ($53.7 billion), primarily driven by its international gaming and lucrative cloud services, the latter bringing in 17 billion yuan in revenues and consistently outgrowing the market. The company said the global economic chaos caused by the spread of the deadly coronavirus, which began in China late last year, would be a short term challenge. Initially its fast growing cloud computing services might take a hit, it said. But the company remained more bullish in the long term, cushioned by the expectation that many more people will turn to remote working and online health care services that often require significant cloud computing power.

“We believe enterprises will be increasingly keen to adopt cloud-based solutions over the longer term, in order to facilitate remote working and remote interactions with their customers,” chairman Ma Huateng said in the annual results statement. Figures in the annual report revealed how vital remote working apps have become during the pandemic. With vast chunks of China locked down in January and February, users of Tencent’s “meeting” program surpassed 10 million within two months.

Many more users of its WeChat platform turned to “Tencent health” for real-time pandemic data, online consultation and self-diagnosis services. Ma added that the virus outbreak had boosted the need for home learning programs. More than 120 million users had used the company QQ School-plus-Home groups with features including live broadcast, online tutoring programs as well as tools for schools to facilitate online and offline education.

The company also picked up millions of new gamers during the coronavirus pandemic in China. “Looking forward, we will seek to both meet the immediate needs for our products brought about by the pandemic, and develop our capabilities to anticipate and serve enterprises’ long term demands as the economy digitizes,” Ma said. Shares in the Hong Kong-listed company fell 4.5 percent yesterday shortly before the results were announced, tracking the continued losses the city’s bourse has faced amid a global sell off.