August 18, 2016 4:00 am JST Tencent profit beats
Post# of 96895
Posted On: 08/18/2016 11:22:45 AM
August 18, 2016 4:00 am JST
Tencent profit beats forecast, boosted by games and ads
Growth in smartphone games helped Tencent deliver a higher-than-expected profit.
BEIJING -- China's largest internet company, Tencent Holdings, reported stronger than expected earnings for the April-June quarter Wednesday, lifted by revenue surges from smartphone games and online advertising.
Net profit rose 47% on the year to 10.7 billion yuan ($1.61 billion), beating analyst expectations of 9.81 billion yuan. But the earnings also illustrated the company's reliance on the two growth segments, signaling a challenge to Tencent's business diversification efforts.
"In the second quarter of 2016, we have delivered robust growth," said Pony Ma Huateng, Tencent's chairman and CEO. "While we continue to invest in the early stage activities including video content, cloud services and internet finance, we are generating a healthy market share and profitability on the branding business."
Revenue soared 52% on the year to 35.7 billion yuan, topping analyst projections of 42% growth to 33.2 billion yuan.
The online game sector's revenue increased 32% from a year earlier to 17.1 billion yuan, generating almost half of total revenue. The expansion was accelerated in the second quarter with the company's acquisition of Finnish gaming company Supercell Oy -- creator of "Clash of Clans" -- a deal announced in June.
Though the acquisition process is ongoing, the partnership has begun as Tencent distributed Supercell's "Clash Royale" software on its free messaging apps WeChat and QQ. In addition, casual games like "Carrot Fantasy 3" and "Fight the Landlord" helped increase this user base.
The acceleration fits with the company's shift of its gaming platforms toward smartphones from personal computers, as Tencent aims to roll out more games on the platform to remain the leading game provider.
Though the gaming sector is a major revenue generator, Tencent sees further growth possibilities.
"The mobile gaming industry is still at a relatively early stage in development, which means a lot of innovation is yet to come," Tencent President Martin Lau said. He sees "quite high" potential for Tencent, with its knowledge and connections in the developing Chinese market, to collaborate with Supercell, which has experience in developed markets, in order to attract users and improve monetization.
"We hope to facilitate and exchange ideas and create [new] game users experiences to [bring about] great operational proficiency," he said, adding that delivering better solutions will lead to a larger market share.
Tencent profit beats forecast, boosted by games and ads
Growth in smartphone games helped Tencent deliver a higher-than-expected profit.
BEIJING -- China's largest internet company, Tencent Holdings, reported stronger than expected earnings for the April-June quarter Wednesday, lifted by revenue surges from smartphone games and online advertising.
Net profit rose 47% on the year to 10.7 billion yuan ($1.61 billion), beating analyst expectations of 9.81 billion yuan. But the earnings also illustrated the company's reliance on the two growth segments, signaling a challenge to Tencent's business diversification efforts.
"In the second quarter of 2016, we have delivered robust growth," said Pony Ma Huateng, Tencent's chairman and CEO. "While we continue to invest in the early stage activities including video content, cloud services and internet finance, we are generating a healthy market share and profitability on the branding business."
Revenue soared 52% on the year to 35.7 billion yuan, topping analyst projections of 42% growth to 33.2 billion yuan.
The online game sector's revenue increased 32% from a year earlier to 17.1 billion yuan, generating almost half of total revenue. The expansion was accelerated in the second quarter with the company's acquisition of Finnish gaming company Supercell Oy -- creator of "Clash of Clans" -- a deal announced in June.
Though the acquisition process is ongoing, the partnership has begun as Tencent distributed Supercell's "Clash Royale" software on its free messaging apps WeChat and QQ. In addition, casual games like "Carrot Fantasy 3" and "Fight the Landlord" helped increase this user base.
The acceleration fits with the company's shift of its gaming platforms toward smartphones from personal computers, as Tencent aims to roll out more games on the platform to remain the leading game provider.
Though the gaming sector is a major revenue generator, Tencent sees further growth possibilities.
"The mobile gaming industry is still at a relatively early stage in development, which means a lot of innovation is yet to come," Tencent President Martin Lau said. He sees "quite high" potential for Tencent, with its knowledge and connections in the developing Chinese market, to collaborate with Supercell, which has experience in developed markets, in order to attract users and improve monetization.
"We hope to facilitate and exchange ideas and create [new] game users experiences to [bring about] great operational proficiency," he said, adding that delivering better solutions will lead to a larger market share.
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