TENCENT(HK:00700) Mei Ri Jing Ji Xin Wen·2025-08-13 09:33Core Viewpoint - Tencent Holdings reported strong financial performance for the second quarter of 2025, with significant year-on-year growth in revenue and profit, driven by its gaming and AI initiatives [1][3]. Financial Performance - Revenue for the second quarter reached RMB 184.504 billion, a 15% increase year-on-year [2]. - Net profit attributable to equity holders was RMB 55.628 billion, reflecting a 17% year-on-year growth [2]. - Gross profit was RMB 105.013 billion, up 22% compared to the previous year [2]. - Operating profit increased by 18% year-on-year to RMB 60.104 billion [2]. - Earnings per share rose to RMB 6.115, a 20% increase from the same period last year [2]. Investment and R&D - The company invested RMB 202.5 billion in research and development, marking a 17% increase year-on-year [1]. - Capital expenditures reached RMB 191.1 billion, with a significant year-on-year growth of 119% [1]. Gaming Sector - Domestic gaming revenue for the quarter was RMB 404 billion, a 17% increase year-on-year, driven by new releases and established titles [3]. - The success of games like "Delta Action" and ongoing popularity of titles such as "Honor of Kings" and "Peacekeeper Elite" contributed to this growth [3]. AI and Advertising - Continued investment in AI has led to double-digit percentage growth in both revenue and non-IFRS operating profit [3]. - The company upgraded its advertising models, enhancing ad effectiveness across platforms and driving rapid growth in marketing services revenue [3]. User Engagement - The combined monthly active accounts for WeChat and WeChat reached 1.411 billion, a 0.6% increase quarter-on-quarter and a 3% increase year-on-year [3]. - QQ's monthly active accounts were 532 million, showing a slight decline of 0.4% quarter-on-quarter and a 7% decrease year-on-year [3]. Employment and Compensation - As of June 30, 2025, the company employed 111,221 staff, with total compensation costs for the first half of the year amounting to RMB 650 billion [3]. - The number of employees increased from 109,414 in the previous quarter, with total compensation costs of RMB 341 billion [3]. Market Reaction - Following the earnings report, Tencent's stock price rose by 4.74%, increasing its market capitalization by approximately RMB 221.743 billion [4].