Tencent's online ad revenue grows for the first time in more than a year

cnbc.com:

BEIJING — Chinese tech giant Tencent reported better-than-expected quarterly revenue on Wednesday, helped by growth in ads within its growing «video accounts» business.

Overall revenue for the quarter ended Dec. 31 came in at 144.95 billion yuan ($21.07 billion), higher than the 143.89 billion yuan estimated by FactSet.

Tencent's online advertising revenue overall grew by 15% to 24.7 billion yuan, beating a FactSet estimate of 22.18 billion yuan — and growing for the first time since the second quarter of 2021. The company said most ad spend came from e-commerce companies, fast-moving consumer goods and games.

Video accounts sit within the WeChat messaging and social media app and are a way for individuals and businesses to share short videos and livestreams on the platform. Average monthly users of WeChat in China and overseas rose by 3.5% from a year ago 1.31 billion accounts in the fourth quarter.

In-feed ads for video accounts generated more than 1 billion yuan in revenue in the fourth quarter, Tencent said. It said user time spent on video accounts was more than 1.2 times that spent on WeChat Moments, which is similar to Facebook's News Feed.

«This advertising unit allowed them to unlock revenue coming from e-commerce, which has done pretty well,» James Lee, U.S. and China internet analyst at Mizuho Securities, said on CNBC's "Squawk Box Asia." He has a neutral rating on Tencent and a price target of 400 Hong Kong dollars.

Shares of Tencent in Hong Kong were trading 5% higher on Thursday, at HK$366.40.

WeChat also has mini-programs that allow users to buy products from merchants within the app. Tencent said user time spent on mini-programs roughly doubled in the fourth quarter to also exceed that spent on Moments —