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Tencent achieves higher than expected profit in Q1

Tencent said profit advanced 61 percent in the first quarter to 23.29 billion yuan (US$3.7 billion) in part due to strong gaming and advertising income. 

Tencent said their profit advanced 61 percent in the first quarter to 23.29 billion yuan (US$3.7 billion), in part due to strong gaming and advertising income. 

China’s largest social networking company and game operator said yesterday that revenue rose 48 percent to 73.53 billion yuan, higher than a precious estimate of 70.8 billion yuan. 

Shares picked up more than 5 percent in the morning session as previous worries over lower margins, increasing operation costs and research spending were somewhat alleviated.

WeChat, Tencent’s popular online social networking platform, saw its monthly active users hit over 1 billion by the end of the March quarter. 

Income from smartphone gaming business went up 68 percent to 21.7 billion yuan thanks to popular titles such as “Honour of Kings."

Online advertising sales climbed 55 percent thanks to online video advertising.

Bocom International said in a research note today that the solid results would ease market concern and estimate firm growth of new desktop games and mobile gaming to support upward trends in the second quarter. 

The company also intends to increase spending in the mobile payment sector as well as areas such as cloud computing, digital entertainment and partnerships with offline retailers in a bid to confront arch rival Alibaba Group. 

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