Tencent Reports 29% Revenue Increase As US-China Tensions Rise

As Tencent waits to see the full effects of President Donald Trump’s executive order targeting business dealings related to its app WeChat, it posted its best quarter since 2018. The Chinese-based technology company reported one of its fastest growing quarters in two years, driven by a 40% increase in online game revenue.

Tencent — which has investments in a breadth of online and mobile games —  saw its revenue grow 29% year-over-year, generating $16.53 billion in the quarter ending in June. Online game revenue was $5.5 billion, fueled by stay-at-home orders across the globe. With those orders waning, the company expects the next quarter to normalize.

The next quarter could be turbulent for Tencent as Chinese-American tensions rise. Despite approximately 19 million U.S. WeChat users, analysts don’t think the WeChat order will impact Tencent all too much. The company also has stakes in a variety of companies ranging from video games to Spotify and Snap, as well as pro sport media rights in China, including a $1.5 billion deal with the NBA.

Following Trump’s order last Thursday, Tencent stock has dropped 6.3% — it had been up 45.5% year-to-date to that point.