Tencent rebounded from a loss in Q4 with double-digit growth in profit and revenue in the first quarter of 2019, driven by gains in fintech services and social advertising.
Ma Huateng, chairman and CEO, said: “We sustained healthy user engagement across our key platforms, with notable growth in the number of short videos uploaded and shared by users on QQ and Weixin…Our payment, other fintech services and cloud business, while still at an early stage of expansion, are now generating substantial revenues.”
He added: “We believe we are building solid foundations for future growth” in the consumer and industrial internet domains.
Net profit increased 17 per cent year-on-year to CNY27.2 billion ($3.9 billion), while total revenue was up 16 per cent to CNY85.5 billion.
Its profitability was hit in 2018 by a nine-month government freeze on online game approvals, which was lifted in December.
Revenue in its value-added services segment increased 4 per cent year-on-year to CNY49 billion, with online games sales dipping 1 per cent to CNY28.5 billion. The decline was offset by a 13 per cent increase in social networks revenue, which was driven by growth from its live broadcast services and video streaming subscriptions.
Smartphone games revenue fell 2 per cent to CNY21.2 billion due to fewer new game releases. The company said the release of the Perfect World Mobile game late in the quarter contributed substantially to cash receipts, but only modestly to reported revenue as it deferred the majority of the income for subsequent periods.
In the second quarter, it said it has or will release several mid-to-hardcore games.
Its finech and business services segment grew 44 per cent to CNY21.8 billion, which it credited to increases in commercial payment and cloud services.
Online advertising revenue rose 25 per cent to CNY13.4 billion, with social ad sales rising 34 per cent to CNY9.9 billion. The company said the overall growth rate for ads was down compared with previous years because of the “challenging macro environment”.
Monthly active users (MAUs) on WeChat and the Chinese version Weixin increased 6.9 per cent year-on-year to 1.1 billion, while smart device MAU of is instant messaging platform QQ edged up 0.9 per cent to 700 million.