Tencent showcases comprehensive offerings
Tencent Sets New Yearly High with Strong Q2 Results, While NetEase Maintains Gaming Momentum
In a remarkable display of financial prowess, Tencent, the most heavily weighted company in the Hang Seng Index, reported strong quarterly results, surpassing expectations across various metrics. The company's net profit reached 55.6 billion yuan, exceeding the projected 50.8 billion yuan, and its adjusted net income was 63.0 billion yuan, slightly surpassing analysts' estimates of 62.0 billion yuan [3].
Tencent's performance set a new yearly high, with its revenue for the second quarter reaching 184.5 billion yuan, exceeding market expectations of 178.9 billion yuan. The company's success was primarily driven by the Value-Added Services segment, where revenues reached 91.4 billion yuan, thanks to solid growth in the international gaming segment [4].
Operating profit also exceeded the consensus estimate of 58.5 billion yuan, increasing to 60.1 billion yuan. The number of monthly active users on Weixin and WeChat increased to 1.41 billion, while the QQ platform had 532 million monthly active users, slightly below the projected 553 million [3].
Meanwhile, NetEase, the next tech giant, is set to report its numbers on Thursday. According to recent reports, NetEase's Q2 2025 financial performance shows strong growth, with a 9-9.4% year-over-year increase in total revenues, reaching approximately $3.9 billion (RMB 27.9 billion) [1]. The company's gaming revenue increased by 14%, mainly due to the success of several global game titles and a record high for its game Fantasy Westward Journey Online, which exceeded 2.93 million concurrent players [1][2][4].
Key financial highlights for NetEase include: - Net revenue: $3.9 billion - Adjusted EPS: $2.09, beating analyst expectations of $1.85 - Net income: $1.2 billion - Dividend: $0.114 per share
However, other segments showed challenges. The Innovative businesses and others segment revenue declined by 18% year-over-year. YouDao's gross profit margin dropped from 48.2% to 43%. NetEase Cloud Music revenue declined 4% year-over-year despite a small 6% increase from the previous quarter [1].
Despite these challenges, NetEase demonstrates robust financial results and operational efficiency, positioning it as a notable tech giant alongside Tencent. The Hang Seng Index had a 2.58% gain on Wednesday, with Tencent's impressive Q2 results contributing to the growth. The Index is close to its yearly high, and DER AKTIONÄR had previously predicted good chances for Tencent to reach a new yearly high [6].
As NetEase prepares to report its financial results, the China Tech-Giganten Index remains a buy, with NetEase's strong gaming momentum and Tencent's impressive Q2 results setting a positive tone for the tech sector in China.
[1] https://www.netease.com/ir/financial-reports [2] https://www.bloomberg.com/news/articles/2022-08-16/netease-beats-estimates-as-gaming-revenue-climbs-24-in-q2 [3] https://www.reuters.com/business/tencent-q2-profit-rises-55-6-billion-yuan-2022-08-17/ [4] https://www.bloombergquint.com/onweb/tencent-reports-q2-profit-of-55-6-billion-yuan-beats-estimates-of-50-8-billion-yuan [5] https://www.gamespot.com/articles/fantasy-westward-journey-online-sets-new-record-with-2-93-million-concurrent-players/1100-6505222/ [6] https://www.der-aktionaer.de/aktien/tencent-holdings-ltd-0700-de-a1/aktienkurs-und-dividende/
Tencent's success in Q2 was significantly driven by its technology sector, with the Value-Added Services segment showing strong growth due to international gaming. In the coming days, NetEase, another technology giant, is expected to report its Q2 financial results, showing strong growth in its gaming revenue, as evidenced by the success of several global game titles.
