Tencent Holdings (0700) posted quarterly sales and profit that topped all analyst estimates as blockbuster titles, including Honour of Kings, drove a billion-plus users on WeChat and QQ to spend on game items.
Revenue climbed to 49.6 billion yuan (HK$56.08 billion) in the three months ended March, the Shenzhen-based company said yesterday. Net income climbed to a record 14.5 billion yuan.
China's internet titans are defying a slowdown in the world's second largest economy. Chairman Pony Ma Huateng is now bolstering a US$300 billion (HK$2.34 trillion) empire that encompasses everything from online gaming and social media to film and TV production. Tencent's adapting a plethora of hit novels and anime into mobile games, distributed via messaging services WeChat and QQ, aimed at safeguarding its dominance of domestic media.
Shares of Tencent inched 0.4 percent higher before earnings were announced. The stock has gained 37 percent this year, compared with a 41 percent rise for New York-listed rival Alibaba Group Holding. Naspers , which owns a significant stake in Tencent, was up 2.2 percent in early trade in Johannesburg.
WeChat had 937.8 million monthly active users and the mobile version of QQ had 678 million users at the end of the quarter. Revenue from value added services, which includes online games and messaging, soared 41 percent to 35.1 billion yuan. Of that total, online game revenue grew 34 percent to 22.8 billion yuan.
Tencent rode a strong showing from Honour of Kings. Developed in-house, the hit title is a mobile battle game similar to the world's most popular desktop title League of Legends - also owned by Tencent. It topped both revenue and downloads in Apple Inc's iOS store in March, according to App Annie.
Meanwhile, Tencent Music Entertainment Group and Universal Music signed a licensing agreement to expand the Chinese music market. Under the deal, Tencent will be able to stream music from Universal's record labels and global recording stars.
BLOOMBERG AND REUTERS