In its Q3 2023 financial report, Tencent announced a 10% growth in total revenue, reaching 1.55 trillion yuan compared to the same period last year. The company also reported a net profit of 449 billion yuan according to non-IFRS accounting standards, representing a 39% increase.
Ma Huateng, Chairman and CEO of Tencent, described this revenue growth as a high-quality achievement. The significant increase in profit margins can be attributed to a strategic cost structure adjustment that optimizes shared resources. Services such as video and mini-games have contributed to high-profit margins. Additionally, Tencent has successfully managed to expand its business scale while investing in the development of AI models to further drive growth across all sectors.
Tencent’s gaming business highlighted the recovery of PUBG Mobile and the significant growth of online games in China, such as Lost Ark and VALORANT. The online advertising business also experienced a 20% growth, primarily driven by advertising on video platforms. Furthermore, the FinTech business grew by 16% through the expansion of wallet payment services and wealth management.
In addition to the financial results, Tencent executives addressed concerns regarding the chip export ban’s potential impact on the AI business. They emphasized that Tencent is currently one of the leading AI service providers in China, possessing a substantial number of chips for processing. This allows the company to continue upgrading and diversifying its Hunyuan model portfolio.
TLDR: Tencent reported a 10% increase in total revenue during Q3 2023, reaching 1.55 trillion yuan. The company’s net profit also rose by 39% to 449 billion yuan. Ma Huateng, Chairman and CEO, attributed this growth to a high-quality revenue increase, optimized cost structures, and investments in AI development. Gaming, online advertising, and FinTech businesses witnessed substantial growth. Executives addressed concerns about the chip export ban, stating that Tencent remains a prominent AI service provider with ample processing chips and ongoing model upgrades.
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