Tencent posts 61% growth in revenue

TENCENT Holdings posted its strongest growth in more than seven years, riding the success of games such as Honour of Kings and a rapidly expanding internet advertising business.

China’s largest social network operator reported a 61 percent rise in revenue to 65.2 billion yuan (R140bn) in the September quarter, outpacing the 61bn yuan projected. That also marked the biggest gain in sales since 2010, when revenue was a mere one-fourteenth of its current level. Profit also beat estimates.

Tencent, the operator of the WeChat messaging and entertainment service that’s become near-ubiquitous across China, continues to deliver on hit games, while pushing more and smarter advertising to its billion-plus users.

The mobile battle game Honour of Kings helped it to expand smartphone gaming revenues 84 percent in the period.

Net income surged 69 percent to 18bn yuan, blowing past projections for 15.8bn yuan.

Investors bet earlier in 2017 that some of the company’s boldest investments would finally pan out, creating one of the world’s most richly valued companies in the process.

The global leader in gaming tapped the spending power of some 200 million players, helping mobile games revenue to surpass that of desktops for the first time in the June quarter.

A still-nascent advertising and finance business on WeChat has also expanded at a rapid clip, furthering its ambition of eventually becoming an ad powerhouse. Online advertising sales grew 48 percent in the quarter.

For the longer term, Tencent is investing billions of dollars in artificial intelligence research, both to better target marketing and to underpin future product categories. – Bloomberg