http://www.moneyweb.co.za/news/companies-and-deals/tencent-profit-jumps-to-record-beats-estimates-on-game-revenue/ Tencent profit jumps to record, beats estimates on game revenue
Technology giant has benefitted from chairman’s $5.8bn deal spree last year. Naspers up 2%.
Lulu Yilun Chen, Bloomberg | 13 May 2015 11:29
Tencent Holdings Ltd. Chairman And CEO Ma Huateng Attends Annual Earnings Conference
Ma ''Pony'' Huateng, chairman of Tencent Holdings
Tencent Holdings profit rose to a record and beat analyst estimates as Asia’s second-largest Internet company boosted sales by adding more smartphone games.
Net income climbed 7% to 6.88 billion yuan ($1.1 billion) in the three months ended in March, the Shenzhen-based company said in a statement Wednesday. That compares with the 6.7 billion-yuan average of eight analyst estimates compiled by Bloomberg.
Tencent is benefiting from Chairman Ma Huateng’s record $5.8 billion deal spree last year as he boosted investments in mobile games, online shopping and travel services to compete with Alibaba. The billionaire is also experimenting with selling advertising on its mobile messaging platforms QQ and WeChat, which combined have more than 1 billion registered users.
“Mobile gaming posted strong growth as Tencent expanded to more mid- to hard-core games that encourage users to spend more money,” Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP said before the earnings. “What people really care about now is whether Tencent can prove it is making progress on selling ads on WeChat.”
Ma is on track to invest even more this year, already agreeing to spend $3.3 billion on acquisitions, according to data compiled by Bloomberg. Deals include an agreement last month to take a 15% stake in Glu Mobile, the San Francisco-based developer of mobile games, including one based on reality television celebrity Kim Kardashian.
Tencent has acquired streaming rights for National Basketball Association games, Sony Music Entertainment, Warner Music Group and Time Warner’s HBO network. Last month, Ma added streaming rights for Twenty-First Century Fox’s FOX, FOX Sports and the National Geographic Channel.
The company is also using its online retail affiliate JD.com, to challenge Alibaba, operator of China’s largest online shopping sites.
Multinational media company Naspers, which owns 33.85% of Tencent, was up 2.42% at R1 820 by 11:15 am.