Ten­cent's profit misses es­ti­mates as video con­tent costs climb

The Pak Banker - - COMPANIES/BOSS -

Ten­cent Hold­ings Ltd. posted fourthquar­ter profit that missed an­a­lyst es­ti­mates amid es­ca­lat­ing costs for video con­tent and on­line bank­ing trans­ac­tions. Net in­come rose 22 per­cent to 7.16 bil­lion yuan ($1.1 bil­lion) in the three months ended De­cem­ber, the Shen­zhen-based com­pany said Thurs­day. That com­pares with the 7.44 bil­lion-yuan av­er­age of an­a­lysts' es­ti­mates com­piled by Bloomberg.

As desk­top gam­ing growth slows, Ten­cent is try­ing to keep mo­bile users en­gaged with its so­cial net­work and con­tent plat­forms by not flood­ing cus­tomers with ad­ver­tis­ing and re­quests for pur­chases. The com­pany is buy­ing in­tel­lec­tual prop­erty rights for anime, comics and nov­els to con­vert into mo­bile games, in­clud­ing Ja­pan's pop­u­lar manga se­ries Naruto.

"The on­line game in­dus­try in China is pretty ma­ture at this stage so it's hard to repli­cate the in­crease pre­vi­ously seen," Marie Sun, a Shen­zhen-based an­a­lyst at Morn­ingstar In­vest­ment Ser­vice, said be­fore the an­nounce­ment. "Even mo­bile games are past the ex­plo­sive growth stage." Ten­cent is also ex­pand­ing its bat­tle with Alibaba Group Hold­ing Ltd. in ser­vices span­ning food de­liv­ery to video stream­ing ser­vices.

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