Tencent advances revenues 48%, profit over 60% in Q1

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Before the release of the first-quarter report, there had been concerns in the market about a potential slowdown in Tencent's online game income growth. It's also secured Chinese distribution rights to some of the world's hottest games, including PlayerUnknown's Battlegrounds, adapting it into mobile titles to draw in smartphone users.

"It is a matter of a fact that the competition is actually very heavy, there have been a lot of subsidies provided in the market by our market peers, and as a result we have to follow suit", Tencent President Martin Lau said on an earnings call. The stock had fallen 16 percent in Hong Kong since a record close on January 23. Not only can this add to the moat and diversity of Tencent's operations, emerging rivals can also be turned into members of the group at an early stage. That compares to the 17.4bn-yuan average of estimates compiled by Bloomberg.

Revenue rose 48 per cent to 73.53bn yuan, beating the 70.93bn yuan average estimate of 14 analysts, according to Thomson Reuters data.

Online advertising revenue jumped 55 percent to 10.7 billion yuan in the same period. The company announced that had seen growth in the double digits related to the number of daily active users for that game. The essay, written by veteran tech editor Pan Luan, claimed the company had "lost its dream" by becoming an investment company instead of continuing to develop great products in core areas such as search, e-commerce, information streaming, short video and cloud services.

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Fortnite is the other game that is driving a strong quarter. Developed by Tencent's own studio, the mobile title resembles the popular desktop title League of Legends, whose developer was acquired by Tencent in 2015.

Tencent said mobile game revenue hit 21.7 billion yuan (about US$3.4 billion) during Q1 2018, up 68 percent year-on-year, while PC-based games saw sales of 14.1 billion yuan (over US$2.2 billion), roughly the same figures as Q1 2017.

In a battle for the world's largest mobile payment and retail market, Tencent has splashed out billions forging alliances with new partners like Carrefour and subsidising merchants to lure them onto its payment-to-messenger super app WeChat.

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