Tencent, a Chinese technology giant, reported a significant increase in profit for the second quarter. However, the company fell short of expectations. Despite this, Tencent’s cost-cutting measures started to yield positive results, with sales rising in its core gaming business, as well as its cloud and fintech unit.

Here’s a breakdown of Tencent’s performance in Q2 compared to Refinitiv consensus estimates:

Revenue

• 149.21 billion Chinese yuan ($20.46 billion) vs. 151.73 billion yuan expected
• 11% year-on-year increase

Profit attributable to equity holders of the company

• 26.17 billion Chinese yuan
• 33.42 billion yuan expected
• 41% year-on-year rise

Tencent is now reaping the benefits of its cost-cutting initiatives launched last year. The company exited non-core businesses and implemented tighter marketing spending. As a result, Tencent has reported three consecutive quarters of revenue growth, recovering from a challenging 2022.

There were two main factors that impacted Tencent’s performance in 2022. Firstly, the company experienced a significant slowdown in its core gaming business compared to the previous year due to the pandemic. Secondly, Chinese authorities froze the approval of new games for several months, resuming the process only in April 2022. It took a few more months for regulators to approve games published by Tencent.

Despite these challenges, Tencent, the owner of China’s largest messaging app WeChat, is starting to see improvement across its gaming and cloud computing ventures.

Please note that this is a breaking news story. Check back later for updates.