Published: Thu, November 16, 2017
Science | By Hubert Green

Tencent's focus on digital content after stellar third quarter

Tencent's focus on digital content after stellar third quarter

Chinese internet giant Tencent Holdings Ltd. said third-quarter net profit rose almost 70% from a year earlier, driven by advertising revenue gains and strong growth at its mobile-gaming and digital-content divisions.

"The investment enables Tencent to explore cooperation opportunities with the company on mobile games publishing and newsfeed as well as to share its financial returns from the growth of its businesses and monetization in the future", Tencent said in an emailed statement.

IBD'S TAKE: Tencent is among the best Chinese stocks to buy and watch.

It ended the quarter with 980 million WeChat users, an addition of 17 million users from the previous quarter and up 16% from the year-ago period.

Its Youtube equivalent, Tencent Video, has become the video streaming service with the largest paying subscriber base in China, at 43 million subscriptions, Lau said.

The bulk of Tencent's revenue comes from online gaming.

Tencent recently listed several subsidiaries on stock exchanges in Hong Kong and the a slew of stellar initial public offerings (IPOs). Analysts had expected a profit of 15.7 billion yuan.

Other drivers of Tencent's big quarter: Smartphone game revenue totaled $2.7B (+84% Y/Y) led by Honor of Kings while the Other segment grew 143% on the year mostly due to the growth of payment and cloud services. Its release in the US has been delayed from this month until next year.

Revenue rose 61 percent to 65 billion yuan, against an estimate of CNY 60.78 billion.

Tencent is China's leading provider of messaging and mobile gaming services, and owner of the popular WeChat app.

Tencent shares closed at HK$383 before results were announced, bringing their gains for the year to just over 100 percent against the wider market's .HSI 31 percent rise.

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