Tencent profit beats estimates as investment gains offset gaming weakness

HONG KONG (Reuters) – Tencent Holdings (0700.HK) said on Wednesday its third-quarter net profit rose 30 percent, beating estimates, as investment gains offset a weak performance in the Chinese company’s core gaming business.

FILE PHOTO: Tencent Holdings Chairman and CEO Pony Ma (C) visits the Tencent booth following the opening ceremony of the fifth World Internet Conference (WIC) in Wuzhen, Zhejiang province, China November 7, 2018. REUTERS/Stringer/File Photo

Net profit at China’s biggest gaming and social media group in the July-September quarter rose to 23.3 billion yuan, compared with an average estimate of 19.32 billion yuan, according to 15 analysts polled by to I/B/E/S data from Refinitiv.

Revenue rose 24 percent to 80.6 billion yuan ($11.59 billion), the slowest quarterly growth in more than three years, in-line with estimates.

China, the world’s biggest gaming market, has been imposing tougher rules on the industry, including a halt to new game approvals since March and calls to tackle young people’s gaming addictions.

This contributed to Tencent reporting its first quarterly profit fall in more than a decade in its April-June quarter. The company also cut its gaming marketing budget.

Tencent shares, which more than doubled in 2017, have dropped by about a third so far this year, wiping about $165 billion in value from the group’s market value.

In the third quarter, Tencent benefited mainly from a more-than-doubling in net gains from its investment activities, including the initial public offering of online food delivery to ticketing services company Meituan Dianping.

Douglas Morton, Head of Research, Asia at Northern Trust Capital Markets, said the result beat was a positive surprise even if not counting the investment income.

“What the real surprise is or the real comfort for the market will be that the mobile gaming data which beat expectations,” he said.

Tencent said smartphone games revenues grew 7 percent year-on-year and 11 percent quarter-on-quarter to 19.5 billion yuan, mainly due to contributions from new games. Despite the new approval freeze, Tencent already had 15 approvals and released 10 titles in the quarter, it said in the filing.

PC games revenue dropped 15 percent year-on-year due to continued user migration to mobile games and high base in the same quarter a year ago.

Advertising revenue, which accounts for 20 percent of the company’s total revenue, rose 47 percent, supported by a 61 percent jump in social and other advertising.

Tencent said its cloud services revenues more than doubled year-on-year in the quarter while the number of paying cloud customers grew at a triple-digit percentage rate year-on-year. Cloud revenues for the first three quarters of the year exceeded 6 billion yuan, it said.

Monthly active user number of WeChat, the most popular social network in China, rose incrementally to 1.08 billion.

($1 = 6.9536 Chinese yuan)

Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman and Jane Merriman

A TSA Agent Swiped Away at My Groin. A Fellow Agent Came Over to Cheer Him On

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.

It was Election time, so I wanted to leave the country.

Fortunately, Web Summit in Lisbon coincided perfectly, so more than a week ago, my wife and I moved through a relatively empty San Francisco Airport, ready to get away.

I went through the TSA’s Body Scanner and suddenly, a beep.

I knew there was nothing in my pockets. However, the TSA agent said: 

The machine says there’s something in your groin area.

There’s no palatable answer to that. The agent continued that he’d have to perform a more thorough search of my groin. And buttocks.

He gave me the option of a private room, but frankly I’d prefer not to be sequestered away with a lone TSA agent if I can help it. 

Whatever he was going to do, I wanted it out in the open.

And so he began. My buttocks and my groin were given a thorough — some might even say enthusiastic — wiping.

His arms moved from side to side in the manner of a speed skater, desperate to take the last turn in first place. The contact was, how can I put it, firm. 

But then a fellow TSA agent came over and felt forced to cheerlead. In a deeply admiring tone, he roared: 

Look at his moves!

Please forgive me, but it’s bad enough when you’re being publicly examined like a show horse at the breeder’s office.

To have some hearty bro’ come over and add his enthusiastic fandom made me rather want to pull him aside and ask about his priorities in life.

Instead, of course, you know there’s no point in saying anything, so you take the humiliation and move on.

I contacted the TSA to ask whether bro’-down cheerleading of intimate examinations is part of its standard procedure.

The administration referred me to Covenant Aviation Security, which has the contract for security work at the airport. It says it’ll investigate.

There is, though, an even broader issue here.

When you have a sensitive job, it might still be dull. It’s always worth remembering, however, that the people you’re dealing with aren’t enjoying what you do one bit.

They may — or may not — accept the necessity for it. They’d appreciate, though, a little aforethought on your part.

As we walked away — yes, the machine had been entirely mistaken — my wife turned to me and said: 

Did he really say that?

My personal scanner indicates at least one agent might work on the Respect part.