Chinese tech giant Tencent’s (0700) net profit for the first quarter expanded 14 percent year-on-year to 47.8 billion yuan (HK$51.73 billion), with revenue beating estimates and business realizing "tangible contributions" from artificial intelligence.
For the first three months of the year, total revenues grew 13 percent to 180 billion yuan from one year ago, slightly higher than Goldman Sachs’ previous forecast of 175.3 billion yuan.
Net profit on the non-IFRS basis, however, missed Goldman Sachs’ 49.55 billion yuan projection.
“AI capabilities already contributed tangibly to businesses such as performance advertising and evergreen games,” said Tencent chairman and chief executive Pony Ma Huateng in a statement.
Tencent poured more resources into AI, such as integrating its chatbot tool Yuanbao in WeChat, a mega instant messaging application with over 1.4 billion monthly active users.
Tencent’s first-quarter capital expenditure surged 91 percent to 27.5 billion yuan from one year ago, mainly in support of AI development, leading its total cash to fall by 9 percent year-on-year to 47.1 billion yuan.
Promising to step up AI investment amid intensifying competition, Tencent said it believes its existing high-quality revenue streams could help offset additional costs related to the strategic technology and contribute to a healthy financial performance.
In related news, Tencent has reportedly set up a new department to explore novel e-commerce solutions within WeChat in a bid to further monetize the mega app, according to mainland media.
STAFF REPORTER
