Tencent shares hit a more than 2-year high after Q1 earnings beat

Tencent logo seen displayed on a smartphone.

Omar Marques | SOPA images. LightRocket | Getty Images

Tencent shares climbed to a more than two-year high on Thursday after releasing above-expected first quarter results.

Shares of Chinese tech giant, which are listed in Hong Kong, reached an intraday high of 447 Hong Kong dollars ($ 57.67), placing them about 4% higher than the closing price. Wednesday.

This is the highest level since an intraday high of US $ 458.96 in Hong Kong on March 22, 2018.

Tencent’s shares offset some of these gains in the initial trade, but were even higher.

On Wednesday after the Hong Kong market closed, Tencent said revenue for the March quarter was 108 billion Chinese yuan (15.2 billion US dollars), an increase of 26 percent year-over-year. Profit attributable to shareholders of the company reached 28.9 billion yuan. Both figures exceeded analysts’ forecasts.

The coronavirus epidemic swept across China earlier this year, which has resulted in the country’s foreclosure. People trapped at home have turned to smartphone games for entertainment, which has given Tencent a boost as the country’s largest game maker. Revenues from online games increased 31% year-on-year to 37.3 billion yuan in the first quarter, most of which came from mobile games.

Meanwhile, Tencent’s advertising activity, which was a concern in the earnings report, held up well.

However, the company has reported potential headwinds in the future.

In a statement, Tencent said it expects “consumer activity in the game to largely normalize as people return to work,” adding that it sees “some headwinds for the industry.” online advertising. ”

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