Tencent profit up 47pc

PUBLISHED : Thursday, 20 March, 2008, 12:00am
UPDATED : Thursday, 20 March, 2008, 12:00am

Tencent Holdings, which operates the mainland's largest instant messaging platform QQ, reported a 47.2 per cent rise in profit on increasing sales from online advertising, online games and virtual identity products.

Last year's profit at the Shenzhen-based company grew 1.57 billion yuan (HK$1.72 billion) from 1.06 billion yuan a year earlier. Revenue rose 36.4 per cent to 3.82 billion yuan.

Analysts polled by Thomson Financial had expected a profit of 1.42 billion yuan.

Driving earnings were its virtual identity products, such as avatars and virtual pets, which accounted for 1.71 billion yuan of total revenue, up from 1.2 billion yuan a year earlier.

Revenue from online games increased to 805 million yuan from 627 million a year earlier. Online advertising showed the most growth, surging 84.9 per cent to 493 million yuan.

'Our portal is the most popular in China for entertainment news and general news,' said Tencent chairman Ma Huateng. In the coming year, the company will develop more upmarket content, such as channels for finance, car and technology.

'This will put Tencent in direct competition with Sina and Sohu,' said JP Morgan analyst Dick Wei.

Baidu, the nation's largest search engine, also plans to launch an instant messaging product in the first half. But Mr Wei said: 'I don't believe QQ is under threat as it has a strong community.'