Tencent Holdings (NASDAQOTH: TCEHY) announced fourth-quarter 2018 results late Thursday. The Chinese internet services giant delivered stronger-than-expected revenue even without a long-awaited acceleration in growth from its enormous gaming business.
With Tencent shares down around 3% on Friday as of this writing, let's take a closer look at how it ended the year, as well as what investors should be watching in the coming quarters.
Continue Reading Below
Tencent results: The raw numbers
84.90 billion yuan ($12.37 billion)
66.39 billion yuan
Net profit attributable to Tencent shareholders
14.23 billion yuan ($2.07 billion)
20.80 billion yuan
Earnings per diluted share
What happened with Tencent this quarter?
What management had to say
Tencent CEO Ma Huateng touched on the company's latest strategic growth initiatives, as well as its broad restructuring announced this past October:
Management also reminded investors that, after a nine-month hiatus on approvals of new video game licenses last year, Chinese gaming industry regulators resumed their approval process in December. So far, eight Tencent games have received approval, including seven smartphone games and one PC game.
"Since there is a sizable backlog for the banhao applications in the industry," the company added, "our scheduled game releases will initially be slower than in some prior years."
Here again, Tencent did not provide specific financial guidance. Rather, the company says it will keep investing "in core infrastructure and frontier technologies to embrace the trend of the Industrial Internet, while continuing to drive the evolution of the Consumer Internet."
In short, I think this was as strong a quarter as any Tencent shareholder could have asked for. Though some investors may be disappointed that we haven't seen its core gaming business start to ramp up following the resumption of game license approvals by regulators, Tencent remains well positioned to capitalize on multiple growth opportunities in the burgeoning Chinese tech space.
10 stocks we like better than Tencent HoldingsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Tencent Holdings wasn't one of them! That's right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of March 1, 2019
Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool has a disclosure policy.
Source: Read Full Article
Copyright © 2019