Net profit for the three months to June rose to 10.74 billion yuan (USD 1.62 billion) from 7.31 billion yuan in the same period past year, beating the average analyst estimate of 9.52 billion yuan according to a Bloomberg survey.
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Sales rose 52 percent to 35.7 billion yuan, compared with estimates for 33.3 billion yuan.
Tencent reported net income of 10.9 billion yuan ($1.64 billion), beating views for 9.8 billion yuan.
“During the second quarter, we sustained solid growth in our platforms and businesses, including our social and media platforms, games, digital content, advertising and payment services”, Ma said in a prepared statement.
Tencent’s online games business grew by 32 percent to 17.12 billion yuan in revenues in the second quarter, helped by existing gaming offerings including popular Cross Fire Mobile and Honor of Kings, it said.
Over the past year, Tencent has also been increasing its revenue from ads, including those displayed on WeChat’s timeline page, similar to Facebook Inc.FB -0.48 % ‘s sponsored posts.
“Tencent’s advertisement revenue growth defied a weaker macro economy”, said Li Yujie, an analyst at RHB Research Institute in Hong Kong.
Tencent’s WeChat and QQ play crucial roles by generating traffic for moneymaking operations such as games and advertising. Monthly active users for WeChat, China’s biggest mobile messaging app, soared 34% to 806 million, Tencent said. Users of QQ’s mobile app increased slightly to 667 million from 658 million. Reflecting Tencent’s focus on smartphone titles, mobile gaming revenue alone more than doubled to 9,6bn yuan. It’s leading an $8.6 billion investment in Clash of Clans studio Supercell Oy, a signature acquisition that will bring global titles Hay Day and Boom Beach into the fold. Tencent is laying the foundation for an emerging entertainment empire by building World of Warcraft and League of Legends into global powerhouses.
The company’s shares fell 1.23 per cent to close at HK$193 in Hong Kong on Wednesday, ahead of the results release.
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The company is also competing with Alibaba on digital entertainment. Tencent has merged its QQ Music unit with China Music, combining some of the country’s most popular Spotify-like services to enrich its online streaming business. “Because of Tencent’s strong distribution power, it also has more bargaining power when it comes to splitting revenue with game developers and usually takes the lion’s share”.
