Tencent’s second-quarter earnings beat forecasts, bolstered by AI

Net profit rose 16 per cent to 56 billion yuan (US$7.81 billion) in the three months that ended in June, according to global accounting standards. Sales increased for the 11th quarter, jumping 15 per cent to 184.5 billion yuan and beating the consensus estimate of 19 analysts in a Bloomberg survey.

Shenzhen-based Tencent, one of China’s largest technology behemoths, was able to grow its sales and profitability because “we invested in, and also benefited from, utilising AI”, the company said in its earnings press release on Wednesday.

The company’s shares rose 4.7 per cent amid a rising market in Hong Kong to close at HK$586 before its results were announced. The stock has gained 40.5 per cent this year.

Tencent unveiled an open-source AI model on July 27, capable of generating detailed 3D environments. Photo: Handout

Tencent said that revenue from “marketing services” increased 20 per cent to 35.8 billion yuan for the second quarter “primarily due to AI-driven improvements to our advertising platform and enhancements to the Weixin transaction ecosystem”. WeChat is marketed as Weixin on the mainland.

South China Morning Post