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Tencent made a profit of $24.5 billion in 2020; 71% higher than 2019 despite the pandemic

Tencent's revenue was 28% higher than 2020's


Tencent made a profit of $24.5 billion in 2020; 71% higher than 2019 despite the pandemic | BEAMSTART News

Tencent, one of China's largest tech companies, continues to grow despite the global pandemic and travel slowdowns.

The tech giant posted revenues of $74.4 billion for 2020, 28% higher than the previous year's.

Tencent's profitability has also surged significantly compared to the previous year's, jumping by 71% to $24.5 billion.

In an earnings call with CEO Pony Ma, he mentions that a majority of the company's revenues come from online entertainment, social media, and investments from its FinTech/payments unit.

Tencent headquarters in Shenzhen, China.

Tencent is more than social media today

Tencent has been diversifying its revenue streams significantly in recent years, moving from a pure social networking company into financial technology, gaming, as well as mini programs on WeChat.

WeChat has posted continued growth year-on-year, with over 1.2 billion active accounts at the end of 2020 — more than China’s entire population.

The company is also one of the largest game development giants in the world, with over 29% of revenues coming from its gaming unit.

Tencent is one of the largest game development companies in the world.

Tencent is facing regulatory scrutiny

While Tencent has continued its upwards trajectory of profitability and market dominance, regulators fear that the tech giant may be becoming too powerful to handle.

Much of the scrutiny originates from the planned merger between 2 of Tencent's game live-streaming platforms, which drew the attention of regulators for monopolistic tendencies.

CEO Pony Ma also added in the earnings call that Tencent is actively cooperating with regulators regarding antitrust investigations, and are working to ensure the company does not suffer a similar fate to Alibaba's Ant Group.

“The strategic focus for our fintech business is to work closely with regulators and collaborate with industry partners to deliver compliant and inclusive fintech products, while prioritizing risk management over scale,” reads the earnings report.

ABOUT THE AUTHOR

Kenneth Ho

Founder & Director @ BEAMSTART. Just launched a VC fund to accelerate awesome startups.

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Tencent

Tencent is a Chinese internet service portal offering value-added internet, mobile, telecom, and online advertising services.

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