Tencent posts 69 percent jump in quarterly net profit; becomes the most valuable company in Asia

Net profit for the three months rose to 18 billion yuan ($2.72 billion), said China’s largest social media and gaming company Tencent.

Chinese internet giant Tencent Holdings Ltd posted a 69 percent jump in its quarterly net profit, blowing past estimates, underpinned by a strong growth in revenue from its smartphone games and payment-related services.

Representative Image.

Representative Image.

Net profit for the three months ended in September rose to 18 billion yuan ($2.72 billion), China’s largest social media and gaming company said in a filing to the Hong Kong Stock Exchange.

This was above an average estimate of 15.18 billion yuan from six analysts polled by Thomson Reuters. The company’s revenue rose 61 percent to 65 billion yuan, beating analysts’ estimate of 60.78 billion yuan.

Tencent’s market capitalization has more than doubled this year, reaching $472 billion as of 15 November, making it Asia’s most valuable company. Monthly active users of its social media mobile app WeChat hit 980 million, up from 963 million three months ago. Tencent said daily messages sent on the app rose to 38 billion, representing a year-on-year growth of 25 percent.

Revenue from smartphone games grew by 84 percent to 18.2 billion yuan in the quarter, led by the strong performance of titles including its popular multiplayer online battle arena game Honour of Kings.

The fantasy role-playing game based on Chinese historical characters became so popular that Tencent had to introduce curbs on play time earlier this year amid reports of serious addiction among children.

Tencent’s revenue from PC games rose 27 percent to 14.6 billion yuan, while online advertising revenue rose 48 percent to 11 billion yuan. Its revenue from “other” businesses, mainly from payment-related and cloud services, more than doubled.

The firm’s monthly offline payment volume increased 280 percent. Tencent Cloud expanded its global coverage and now operates in 36 zones around the world, the company said. Tencent also said it recorded rapid growth in subscription for digital content services.

Its Youtube equivalent, Tencent Video, now has more than 43 million paying subscriptions, making it the video streaming service with the largest subscriber base in China, Tencent said.

Tencent shares closed at HK$383 before results were announced, bringing their gains for the year to just over 100 percent against the wider market's 31 percent rise.

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.