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Sophie Yu

Tencent Holdings said it would make significant investments in new areas, including in microblog services and e-commerce to secure the company's long-term growth.

The mainland's biggest internet company by market capitalisation said the investment would be 'heavyweight', but declined to give details. 

Chairman Pony Ma Huateng said the investments would incur significant expense without generating immediate revenues.

Ma said that market competition was intensifying with major companies in the industry diversifying their businesses and an increasing number of newcomers strengthening their competitiveness through initial public offerings.

The company said last year microblogs, the mainland's answer to Twitter, experienced explosive growth and had emerged as a major social media platform. 

There were more than 110 million registered users of Tencent's microblog by the end of the year, while another leading player Sina Weibo said it had 100 million user accounts.

Tencent would expand into lifestyle service categories, based on its mature e-commerce platforms of Tenpay  and Paipai. The company co-operated with US-based Groupon and launched a group-buying portal GaoPeng.com  earlier this year. 

Ma said the competition among collective-buying websites was fierce on the mainland with hundreds of players appearing over a short period of time. 'It is still too early to talk about income or profit now,' he said.

The company unveiled solid results yesterday, with an annual revenue of 19.6 billion yuan (HK$23.2 billion), up 58 per cent year on year. The group's main revenue generator - internet value-added services - contributed 15.5 billion yuan, an increase of 62 per cent.

Net profit amounted to 8 billion yuan, up 56 per cent on 2009. 

The company declared a final dividend of 55 HK cents per share. Yesterday, the stock closed 1.3 per cent higher at HK$216.80.  

However, Tencent's fourth-quarter performance failed the consensus market analysts' estimate of 2.72 billion yuan, recording a 2.65 billion yuan operating profit, down 0.5 per cent quarter on quarter. Operating margin decreased to 48 per cent from 51 per cent.  

Tencent president Martin Lau said a dispute with a security software developer in November was to blame for the disappointing performance. In the fourth quarter, active Qzone user accounts increased 2.2 per cent quarter on quarter to 492 million, a slower than average growth.



Tencent extends social networks, e-finance to ensure expansion