Tencent Holdings Ltd. reported a 50 percent earnings growth in the fourth quarter on the back of its strong online games revenue.
The Shenzhen-based company said net profit for the three months to December rose to 5.86 billion yuan (US$937 million) from 3.91 billion yuan a year earlier. Its revenue was up 24 percent at 20.98 billion yuan from 16.97 billion yuan.
The results, slightly below analyst expectations, showed that the technology giant still has a long way to go to cash in on the popularity of WeChat and QQ, the Wall Street Journal said.
China’s leading messaging and social-networking services have hundreds of millions of active users in China, while US services such as Facebook Inc. and Twitter Inc. are blocked there.
Tencent has been generating some of its revenue by offering mobile games through WeChat and QQ, and has added new advertising features to the social platforms, the newspaper said.
QQ’s active users on smartphones and tablet computers increased to 576 million in December from 542 million in September, the company said, while active users of WeChat grew to 500 million from 468 million.
Tencent’s revenue from online games, including those played on personal computers as well as smartphones and tablets, rose 41 percent to 11.96 billion yuan during the period.
Mobile games offered through WeChat and QQ generated 2.9 billion yuan in revenue, rising from 2.6 billion yuan in the third quarter but at a slower rate of growth than some analysts had projected.
“If you look at the number of players for mobile games, it’s actually much higher than players of PC games … but the percentage of people who pay is actually still quite small compared to PCs,” Tencent president Martin Lau was quoted as saying at a news conference on Wednesday. “There’s still quite a bit of head room to grow.”
In the fourth quarter, 82 percent of Tencent’s revenue came from the business segment that consists mainly of online games, while advertising revenue accounted for only 13 percent, the report said.
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