Tencent profit rises 59pc on boost from gaming and advertising
Mainland internet giant Tencent Holdings posted a 59 per cent jump in net profit for the second quarter to June, driven by strong growth in mobile gaming and advertising.
Mainland internet giant Tencent Holdings posted a 59 per cent jump in net profit for the second quarter to June, driven by strong growth in mobile gaming and advertising.
Net profit reached 5.84 billion yuan (HK$7.35 billion), while revenue rose 37 per cent to 19.75 billion yuan.
Revenue from gaming soared 46 per cent from a year earlier to 15.7 billion yuan, making up 80 per cent of the company's total revenue.
The growth was bolstered by the integration of smartphone games with its mobile social networking platforms including Mobile QQ and WeChat.
"WeChat has grown from a simple instant messaging tool to an open platform encompassing social network, media and e-commerce," a research report by Bocom International said.
Tencent's revenue from online advertising jumped 59 per cent to 2.06 billion yuan, thanks to growth in video advertising and performance-based social advertising.
The Shenzhen-based company said there were 829.3 million monthly active users of QQ in the quarter, up 1.3 per cent from the same period last year. WeChat, the nation's dominant instant messaging application on smartphones, had 56.9 per cent more active users on the year at 438.2 million.
A report by Morgan Stanley Research said it anticipated further improvement in mobile game sales, driven by more game launches and a convenient billing channel.
Tencent said it would prioritise user engagement, game portfolio expansion and platform enhancement over revenue growth during the second half of this year, "given we have already achieved substantial revenue and profitability from smartphone games in the first half".
"Consequently, it is possible that our smartphone game revenue for each of the coming two quarters would be broadly stable as compared to the level for the second quarter," it said.
