Total revenue for the quarter rose 29% y-o-y to RMB125.4 billion, which came above consensus’ estimates by 1%.
Tencent’s mobile game segment surged 61% y-o-y to RMB39.2 billion, benefitting from robust growth of its existing titles and recognition of deferred revenue from the stay-at-home period during Covid-19.
“We believe the main concern for investors going into the print were around the recent regulatory developments, and we believe management has addressed this comprehensively,” say the analysts.
“As it relates to the consultation paper pertaining to the regulation of online micro credit companies, management noted that compliance with regulations and prudent risk management via the controlled scale of fintech products (to optimise for quality rather than volume) is already being adhered to, and therefore do not foresee major changes to the company’s strategy,” they add.
On that, the analysts have maintained their “buy” recommendation on the stock with a raised fair value estimate of HK$687 ($119.35) from HK$619 previously.
Shares in Tencent are currently trading HK$5.50 lower or 0.9% down at HK$596.50.
