Benzinga | Aug 18, 2021 07:00AM EDT

China's Tencent Clocks 20% Revenue Growth In Q2

* Tencent Holdings Ltd (OTC:TCEHY) reported second-quarter FY21 revenue growth of 20% year-on-year to $21.4 billion (RMB138.3 billion), marginally missing the analyst consensus of $21.45 billion.

* Facebook Inc's (NASDAQ:FB) revenue of $29.07 billion, up 56% Y/Y, beat the consensus of $27.82 billion.

* Segments: Revenues from VAS rose 11% Y/Y to RMB72.0 billion. Games revenues increased by 12% Y/Y to RMB43 billion following higher revenues from Honour of Kings, PUBG Mobile, Valorant, Clash of Clans, and Moonlight Blade Mobile games.

* Revenues from Online Advertising increased by 23% Y/Y to RMB22.8 billion, reflecting rising demand from Internet services and consumer staples and consolidation of Bitauto. Social and others advertising revenues grew by 28% Y/Y to RMB19.5 billion.

* Revenues from FinTech and Business Services grew 40% Y/Y to RMB41.9 billion, reflecting higher digital payment transactions.

* Drivers: Combined MAU of Weixin and WeChat grew 3.8% Y/Y to 1.3 billion as of June 30, 2021. Mobile device MAU of QQ reduced 8.8% Y/Y to 590.9 million. Fee-based VAS registered subscriptions rose 12.8% Y/Y to 229.4 million.

* Margins: Tencent's operating profit on an IFRS basis grew 34% Y/Y to $8.1 billion. The margin expanded 400 bps to 38%.

* The adjusted EBITDA margin contracted 200 bps to 36%.

* The profit attributable on an IFRS basis increased 29% Y/Y to $6.6 billion. EPS was RMB4.387.

* Tencent held $39.5 billion in cash and equivalents.

* Tencent generated a free cash flow of RMB17.3 billion.

* Price Action: TCEHY shares closed lower by 4.12% at $55.15 on Tuesday.