"Tencent Holdings' Stock Surges by 6% as Impressive Sales Results Earn Praise from Wall Street"

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The online-advertising and communications services giant, Tencent Holdings (OTCPK:TCEHY), has reported quarterly results that have given hope of a resurgence in China's COVID-affected economy. As a result, on Thursday, shares in the company rose by over 6%.

Before the start of trading on Thursday, Tencent (OTCPK:TCEHY) disclosed that its fourth-quarter sales amounted to $21 billion, representing a mere 0.5% increase from the same period last year. Despite the modest growth, this marks a positive turnaround for Tencent (OTCPK:TCEHY) as it had experienced two consecutive quarters of declining sales.

The business showcased a significant achievement with a rise of 15% in its advertisement earnings. After experiencing four consecutive quarters of dwindling sales in this area, Tencent (OTCPK:TCEHY) finally stepped up its game. The company attributed its newfound success to the boosts from e-commerce and video game advertisers.

During a conference call to discuss Tencent's quarterly results, CEO Pony Ma stated that about 50% of their revenue comes from China's economic activity. He also mentioned that their business has remained strong despite macro challenges and is in a good position to reap the benefits of the economy.

Similar to various notable Chinese technology enterprises, Tencent (OTCPK:TCEHY) has experienced challenges due to a mix of restrictions on business practices and public activity implemented by Beijing in response to the outbreak of COVID-19 throughout China. These measures, which included lockdowns and other actions, were only gradually lifted towards the end of 2022.

Furthermore, Chinese authorities have been implementing fresh regulations and policies for over two years regarding the management and utilization of consumers' personal information by numerous domestic firms.

James Lee, an analyst from Mizuho Securities, stated that Tencent's business has been affected by COVID, causing a decrease in its performance. However, he believes that there is now hope as Tencent is showing increasing revenue from online games, advertising, and fintech services. This positive trend makes Lee feel more confident about Tencent's ability to grow and achieve success in the near future, specifically by the year 2024.

Tencent's recent financial report and the response from Wall Street align with the opinions of Simple Investing, a writer for Seeking Alpha. Earlier in the month, Simple Investing stated that Tencent's success in advertising and mobile games sets them up for a prosperous second half of the year.