Tencent net profits up 58pc in Q1 to beat estimates

HONG KONG: Chinese technology giant Tencent on Wednesday reported first quarter results which exceeded expectations, helped by robust revenues from its hit mobile games.

Its overall revenue jumped 55 percent to 49.55 billion yuan year-on-year, while net profit was up 58 percent at 14.48 billion yuan. Analysts polled by Bloomberg News expected 46.4 billion yuan in revenue and 13 billion yuan in net profit.

Revenue from its smartphone games achieved 12.9 billion yuan ($1.88 billion) alone in the first quarter, a 57 percent year-on-year growth.

Analysts said the results were helped by Tencent's fantasy role-playing hit title Honour of Kings.

"Tencent's mobile gaming business was the main contributor, especially Honour of Kings, which is probably generating two to three billion yuan of revenue a month," RHB Research Institute analyst Li Yujie told Bloomberg.

Tencent also operates China's biggest messaging service WeChat through which a variety of businesses including gaming, advertising and social networking have flourished in recent years.

Monthly active users for WeChat reached 938 million for the quarter, a year-on-year growth of 23 percent.

However, the company saw a setback in May after Russia blocked its WeChat messaging app.

Russia's telecoms watchdog said the messaging service "did not provide its contact information for the register of information distribution organisations".

A law passed in 2014 requires foreign messaging services, search engines and social networking sites to store the personal data of Russian users inside Russia.

Sites that breach the law are added to a blacklist and internet providers are obliged to block access.

Tencent became China's most valuable firm in September, beating state-owned telecom behemoth China Mobile and nearly reaching half of Apple's valuation.

In March, it bought a five percent stake worth US$1.8 billion in the Tesla electric car company.