HONG KONG – Chinese internet giant Tencent Holdings Ltd. said third-quarter net profit rose nearly 70% from a year earlier, driven by advertising revenue gains and strong growth at its mobile-gaming and digital-content divisions.
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Tencent's shares have been on a tear this year, doubling its market capitalization to almost $475 billion. It has raised its international profile with a number of recent acquisitions as well, including buying Epic Games Inc. and a majority stake in electric-vehicle maker Tesla Inc. And last week, Tencent bought a 12% stake in Los Angeles-based social media company Snap Inc.
The company, which is based in the southern tech boomtown of Shenzhen, said its earnings for the quarter rose to more than 18 billion yuan ($2.7 billion) from about 10.6 billion yuan a year earlier. Analysts polled by S&P Global Market Intelligence expected a profit of 15.7 billion yuan. Tencent also beat revenue expectations.
The bulk of Tencent's revenue comes from online gaming. For the quarter, online games revenue rose 48% from a year earlier to 26.8 billion yuan. The company had at least four of the 10 highest-grossing games in Apple Inc.'s app store during the quarter, according to App Annie and Citi Research.
Last week, Tencent's online publishing unit, China Literature Ltd., surged 86% in its Hong Kong trading debut after raising about $1.1 billion in an initial public offering. And on Thursday, Yixin Group Ltd., China's largest online auto retailing platform, will go public; Tencent owns 24% of that company. Demand was high during Yixin's bookbuilding period.
Founded in 1998, Tencent is one of three major internet firms in China, along with e-commerce titan Alibaba Group Holding Ltd. and search company Baidu Inc. Tencent is the largest videogame publisher in the world by revenue, but it is best known in China for its WeChat and QQ messaging and mobile-payment apps, which are installed on nearly every PC and smartphone.
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The combined monthly active users for Tencent's Weixin and WeChat app reached 980 million at the end of September, up 16% from a year earlier, the company said in a statement.
Tencent shares ended 1.3% lower Wednesday in Hong Kong at 383 Hong Kong dollars.
Alyssa Abkowitz contributed to this article.
Write to Chester Yung at email@example.com
Corrections & Amplifications
This article was corrected at 1322 GMT because it incorrectly said mobile-game revenue rose 48% in the fourth paragraph. That revenue percentage is attributed to online games.
Third-quarter revenue from online games rose 48% from a year earlier. "Tencent Third-Quarter Net Profit Rises 69% to CNY18.01 Billion, Beating Estimates -- Update," at 1016 GMT, incorrectly said mobile-game revenue rose 48% in the fourth paragraph. (Nov. 15, 2017)
(END) Dow Jones Newswires
November 15, 2017 08:34 ET (13:34 GMT)