Alex Tai/SOPA Images/LightRocket via Getty Images, chairman of Tencent Holdings, has boosted his wealth by almost $8 billion this year as the Chinese web giant recovers following years of regulatory crackdown, reporting a big jump in earnings on Tuesday. His net worth may increase further thanks to new game releases and rising demand for advertising on WeChat, the company’s immensely popular messaging app.
Investors are showing interest in assets from China as they retreat from markets like Japan, attracted by cheap valuations and a post-pandemic recovery in the world’s second-largest economy. Tencent’s bread-and-butter gaming business is starting to win player attention again after sales contracted in the first quarter of this year. In the meantime, advertising revenues exceeded expectations.
Chai is referring to businesses such as video and international games. The former, which includes ad offerings in the video streaming section of the company’s WeChat super-app, is a key reason that the reported profit attributable to shareholders surged a better-than-expected 62% to 41.9 billion yuan during the Jan.-March period from a year ago, says Shawn Yang, a Hong Kong-based senior research analyst at Arete Research.
Players are becoming more enthusiastic about improved content, according to Tencent executives. They are also waiting for the release of the much-anticipated Dungeon and Fighter mobile game on May 21. Also this month, Supercell, the Finnish developer of mobile game Clash of Clans, will release its first new game in five years. In 2016, Tencent bought a majority stake in Supercell for $8.6 billon.