Tencent has big expectations to beat as Chinese gaming giant prepares to report 2019 earnings amid challenges in ads, cloud computing
- Bloomberg survey of 59 analysts expects net profit for 2019 to grow 22.3 per cent to 94.7 billion yuan, revenue to rise 20.1 per cent to 375.5 billion yuan
- Tencent’s fourth-quarter net profit expected to grow 30.8 per cent to 25.8 billion yuan, revenue to rise 22.1 per cent to 103.69 billion yuan
Tencent Holdings could be one of its online game characters – its shares clawed their way out of a scary stock market dungeon, took a quick run uphill during the coronavirus lockdown in China, and recently were knocked down by the global market upheaval.
The Chinese online gaming and social-media giant will report its 2019 and fourth-quarter results on Wednesday night, after market close in Hong Kong, and analysts were very upbeat.
“It’s not just the game market. You can barely get through a day without touching one of Tencent’s applications,” said Vey-Sern Ling, senior analyst at Bloomberg Intelligence.
Tencent’s ecosystem of games, social networking, mobile payments, music and videos, as well as the cloud put it in a unique position in China, the most wired country in the world, analysts said.
“Tencent’s earning for the whole year of 2019 is expected to [see] a significant increase compared to the same period of 2018,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai. “The result [will be] mainly driven by the value-added service business, especially for the online games revenues, which recorded 11 per cent enhancement year-on-year in the third quarter of 2019.”
A growth catalyst in 2020 will be its launch of two new games in mobile version, Dungeon & Fighter and League of Legends, Wen said.
