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Tencent hits recrod market value as profits soar

TheStar Fri, May 15, 2020 07:40am - 1 month ago

Tencent showcasing its image recognition technology at an expo in Wuzhen, Zhejiang province, last year. Green Packet’s KipleID is powered by Tencent Cloud’s facial recognition and machine learning technology.

KUALA LUMPUR: Internet giant Tencent shares have risen since Wednesday when it reported profits for its first quarter for FY2020 that beat analysts expectations.

Tencent’s market capitalisation now stands at around HK$4.2 trillion (US$540bil), close to it’s all-time high in 2018.

Tencent posted a 26% jump in overall revenue to 108 billion yuan, with net profit rising 6% to 28.9 bil lion yuan (US$4.1bil) in the first quarter.

Tencent gained from a surge in its video subscriber numbers as well following higher usage of its music streaming and online gaming services.

Although its cloud services were slightly held back by Chinese companies’ dampened spending due to the coronavirus outbreak, it still holds huge promise going forward, point out some analysts.

Tencent Cloud is one of the group’s fastest growing divisions. According to Gartner, Tencent Cloud is now ranked fifth worldwide and notably growing the fastest among the top five at a massive rate of 111% every year, with significant inroads into the enterprise market across a number of business verticals.

The other top Internet cloud service providers are Amazon’s AWS, Google Cloud, Azure and Alibaba Cloud.

Tencent’s new ranking is likely due to its achievement last year when it became China’s first and the world’s fifth company with more than one million servers. It has expanded its cloud services into 26 geographic areas, with a strong presence in Asia Pacific.

Analysts expect the global infrastructure as a service market, to which cloud-based services belong, to continue expanding rapidly.

Last year, the market grew to US$48.9bil, a 40.7% year-on-year growth, as more enterprises opt for most cost-effective cloud-based services.

Expansion into South-East Asia

Cloud service providers need to win over customer confidence especially in the area of data security.

Earlier this year, Tencent Cloud added another feather to its cap in this area when it was awarded the Multi-Tier Cloud Security Singapore Standard (MTCS SS) Level-3, the highest of three available levels.

Obtaining the MTCS award is part of Tencent Cloud’s plans for growth outside of China. Tencent has also been awarded with more than 20 other such international certifications todate.

Tencent International Business Group vice-president Poshu Yeung noted that major organisations including Singapore’s NTUC Income, Malaysian mobile carrier U Mobile and regional online retailer Shopee, are already users of Tencent’s cloud capabilities.

“With the rapid cloud adoption globally, we are proud to receive this international security standard, which adds to our increasingly recognised and adopted cloud offerings in the region.

“It also emphasises our exceptional capability to host, handle and process highly confidential data – bringing confidence and peace of mind to our enterprise customers, ” said Yeung.

Plans for Malaysia

Tencent recently announced that its cloud-based video conferencing tool, VooV, is now available in Malaysia.

VooV becomes a great help under the current situation to support companies who work remotely, schools and education institutions for digital learning, and medical professionals for online consultations.

Tencent Meeting, the China version of the conferencing tool, is now the leading video conferencing platform in China.

Tencent Cloud has committed to provide global users with special complimentary access to VooV Meeting’s features during the coronavirus outbreak so that every account can connect up to 300 participants simultaneously.

Another significant development for Malaysia is Tencent Cloud’s partnership with GREEN PACKET BHD to provide a much needed eKYC solution in Malaysia.

EKYC refers to a digital solution to verify the identity of customers in online transactions. Branded under Green Packet’s Kiple ecosystem, the KipleID is powered by Tencent Cloud’s facial recognition and machine learning technology. One of the key highlights of kipleID-eKYC is the Tencent-patented “single-flash” liveness detection solution, which integrates reflection-based and motion-based detection technologies.

The collaboration is noteworthy because Malaysia will soon see the issuance of digital bank licences. Bank Negara will soon issue official guidelines for eKYC as a step towards the issuance of digital banking licences this year.

According StarBiz, Green Packet has confirmed its interest to pursue a digital banking licence as it will enable the company to unlock more financial services for its unserved and underserved user base.

After having built its own payment gateway and e-wallet service catering to underbanked segments such as universities, school students and the ecommerce market, Green Packet is also the only party licensed by Bank Negara to provide white-label ewallet services to the enterprise market and large communities. Interestingly, Green Packet’s forays into ewallet, eKYC and interest in digital banking mirror developments that have taken place at Tencent. Since its inception in 1998, Tencent has moved across multiple industries, beginning with an online multiplayer gaming platform, later moving into instant messaging services and then launching its popular ewallet service WeChat pay in 2013.

Its move into the finance space was crystalised with the creation of WeBank in 2015, followed by expansion in Hong Kong and Malaysia as a key player in the financial payments industry.

Tencent-backed SEA Ltd, a Singapore-based but New York-listed Internet company, was the first to apply for a digital bank licence on the island nation. Hence one should not rule out a possible tie-up between Tencent and Green Packet for a digital bank licence in Malaysia.

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