China's Tencent Posts 58% Jump in First-Quarter Profit -- Update
Chinese internet giant Tencent Holdings Ltd. reported a steep rise in profit and revenue in the first quarter, notching solid growth in its core gaming and online-advertising businesses.
Tencent, China's largest company by market capitalization and the world's biggest videogame publisher by revenue, operates the popular social-media app WeChat. Its share price has soared 36% this year.
The company said higher revenue from some of its most popular online games helped boost its net profit to 14.48 billion yuan ($2.1 billion) for the three months ended in March, up 58% from a year earlier. Overall revenue was up 55% to 49.55 billion yuan.
Already a major force in China, Tencent has been quietly raising its overseas profile through partnerships and investments. Last year it joined with Chinese investors to buy Finnish game developer Supercell Oy, maker of "Clash of Clans," for $8.6 billion. In March it disclosed a $1.8 billion investment in electric-vehicle maker Tesla Inc.
Earlier this week the company announced a big expansion of its music-streaming business with a licensing agreement with Universal Music Group. Tencent distributes music through its QQ Music, KuGou and Kuwo services, and the deal makes it the main distributor in China for Universal records and artists.
Tencent said its revenue from online gaming, its biggest source, was up 34% to 22.8 billion yuan, lifted by the likes of "Honor of Kings" and "Dragon Nest Mobile." Online advertising revenue was up 47%, to 6.9 billion yuan.
The company said its WeChat app, together with the Chinese version, Weixin, boasted 938 million monthly average users in the first quarter, 23% more than a year earlier.
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(END) Dow Jones Newswires
May 17, 2017 06:44 ET (10:44 GMT)