Tencent reaches record growth of $2.7 billion driven by mobile apps

Tencent Holdings, the Chinese corporation that owns WeChat and other messaging apps announced a 70% increase in income to $2.7 billion for the second quarter. Sales grew 59% to $8.5 billion.

The company’s WeChat monthly active user base reached 963 million, which is an increase of 19.5% from 2016. The QQ mobile messenger however dropped by 3.9% in users at the end of Q2.

It’s not entirely clear how much money WeChat is contributing to the results and analysts have begun to wonder.

The app did enable advertising back in 2015 and though it has remained fairly conservative in rolling out ads across various app spaces, it’s clear that a significant chunk of ad revenues likely comes from WeChat ads.

According to its financial statement, digital advertising revenues jumped 55% whilst media ad revenues increased 48%, reflecting increasing traffic across its video services and news feed ads. Social and other advertising revenues increased 61% to $909 million.

The Honour of Kings mobile game gave the company’s mobile gaming business a huge boost at a growth of 54% to $2.2 billion.

The results have fueled expectations that the company can continue to deliver hit games and grow its advertising and messaging app business to compete with the likes of Alibaba.

Martin Lau, Tencent’s President said that going forward the company would be bolstering its artificial intelligence offering:

“We will be persistent but patient with our AI investment, because we believe it is a long-term initiative and we do not necessarily require our research to generate revenue directly in the short term.”