Tencent's net profit rises 19% on gaming income
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E-mail Shanghai Daily, August 15, 2013
Tencent, China's largest Internet company by market value, said its net profit jumped 18.7 percent in the second quarter to 3.68 billion yuan (US$597 million) as its gaming income climbed.
The figure, however, missed Reuters' estimate of 4.14 billion yuan after Tencent boosted marketing to promote its mobile chatting service WeChat in overseas markets.
Sales jumped 36.6 percent to 14.4 billion yuan in the three months ended on June 30, the company said in a stock exchange filing yesterday.
Sales of Tencent's value-added services, including online gaming income and membership fees, grew 23 percent from a year ago to 10.8 billion yuan, making up 74.7 percent of overall revenue.
Tencent released the latest version of WeChat for both iOS and Android mobile operating systems earlier this month, which includes a game center and stickers that users could buy and give to friends as gifts as it aims to generate income out of the popular chatting tool.
"It's an important and strategic step to monetize the popular service, and mobile games could serve as a catalyst for its future earnings," Shenyin and Wanguo Securities said in a note last week.
WeChat has more than 300 million users and nearly 70 million overseas users. The application had an average of 236 million active users monthly at the end of June, nearly triple the figure a year earlier, Tencent said.
The app's quarterly growth also accelerated after marketing expenses more than doubled from a year ago to 1.23 billion yuan due to overseas campaigns to draw more subscribers to the app.
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