Tencent profit rises above estimates
Chinese social media and gaming giant Tencent Holdings clocked a better-than-expected 61 per cent jump in quarterly net profit and its first sequential gross margin rise in nearly 3 years, driven by a jump in mobile gaming revenue and investment gains.
Asia's second-most valuable listed company said on Wednesday net profit for the quarter was 23.29 billion yuan ($3.66 billion), against an average estimate of 17.5 billion yuan from 11 analysts polled by Thomson Reuters.
Revenue rose 48 per cent to 73.53 billion yuan, beating the 70.93 billion yuan average estimate of 14 analysts, according to Thomson Reuters data.
Tencent has been actively investing in areas including gaming, entertainment, autonomous driving and artificial intelligence. In retail and e-commerce - traditionally viewed as rival Alibaba Group's turf - it has splashed out billions since 2017 on deals at home and abroad.
Smartphone games revenue, the largest revenue contributor, jumped 68 per cent to 21.7 billion yuan in the quarter.
The company, however, warned that delayed monetisation and heavy marketing expenses are expected to hit mobile games revenue in the short term.
Tencent's PC games, which are more lucrative than smartphone games and was once its largest revenue contributor, saw a decline in active user numbers due to the continued shift to smartphones, with revenue from the segment flat at 14.1 billion yuan. - Reuters