not vested
Tencent posts robust profitby Carrie Chen
Tencent Holdings (0700) saw third quarter net profit soar 43 percent to 10.6 billion yuan (HK$11.95 billion) from the previous year, while revenue surged 52 percent to 40.4 billion yuan, thanks to high growth in revenues from mobile games and online advertising.
Net profit in the nine month ended September spiked 41 percent to 30.6 billion yuan, while revenue rose 49 percent to 108.1 billion yuan.
Revenue from
smartphone games jumped 87 percent to 9.9 billion yuan in the quarter, driven by non-casual titles such as
Honour of Kings. But the core business may be slowing: mobile game sales rose just 3 percent from the previous quarter.
The Shenzhen-based company ratcheted up spending by 69 percent in the third quarter to bankroll forays into content, cloud computing, online finance and video-streaming.
Its efforts are beginning to show. Revenue from its "others" segment -- which includes
payments and the cloud - more than quadrupled to 4.96 billion yuan in the quarter. Cloud services alone more than tripled after more enterprise customers signed on, particularly from the games, video and on- demand industries.
Tencent also remains positive on its payment services in the SAR. "We've seen a large number of mainlanders travelling to Hong Kong and Hong Kong merchants would like to adopt
Weixin payment as a easier payment method," said president Martin Lau Chi-ping yesterday.
"We've also have a large user base of WeChat in Hong Kong," he said.But the company has also seen difficulties as a limited number of local banks allowed users to connect their bank cards to its payment services.
"Hong Kong will continue to cover the payment business," said Lau. "But the dynamics will be quite different from the mainland."
This year, Tencent signaled its willingness to spend by agreeing to acquire control of
Clash of Clans studio Supercell Oy for US$8.6 billion (HK$67.08 billion). It's said to have budgeted at least US$295 million this year and next to invest in movies in China and Hollywood.
It's also buying the rights to
anime, comics and novels to convert into movies and mobile games. The company has aspirations to create a Marvel-like movie empire, as it competes with Alibaba and Baidu Inc. for viewers.
Last quarter, overall costs reached 18.6 billion yuan. That led to a narrowing of its
gross margins to 54 percent from more than 58 percent a year ago, according to Bloomberg calculations.
"We continue to invest heavily in a number of our strategic products," said Lau. The company is pouring money into games, cloud and app-installment promotions, he added.
For now, Tencent's bottom line still depends on engaging a Chinese internet population that's 710 million strong, on
selling in-game items and -- increasingly -- ads to those users. Its WeChat messaging app has become the dominant force in social media, allowing it to market not just virtual goods and game subscriptions but also online payments and on-demand services like taxi bookings. WeChat had 846 million monthly active users at the end of the quarter.
It recorded adjusted earnings-per- share of 1.24 yuan, compared with the 1.26 yuan average of estimates.
Source: The Standard
http://www.thestandard.com.hk/section-n ... 1117&sid=2It's all about "how much you made when you were right" & "how little you lost when you were wrong"
