Chinese internet group Tencent said yesterday its profits rose 60 per cent in the first quarter, a strong result that will be scrutinised ahead of the initial public offering of the company’s biggest rival, Alibaba.
The Hong Kong-listed company, which runs the popular mobile messaging service WeChat and the gaming platform QQ, beat analyst estimates thanks largely to the growth of revenues from smartphone games.
With a market capitalisation of more than $120bn, Tencent is China’s biggest listed technology company. But that position is set to be challenged by the flotation of Alibaba, the Chinese ecommerce group preparing for a US listing that would value its equity at more than $100bn.
Tencent said yesterday that its net profit for the three months to the end of March was Rmb6.45bn ($1.04bn), an increase of 60 per cent compared with the same period a year ago.
Total revenues were Rmb18.4bn, an increase of 36 per cent over the first quarter of 2013 – the fastest growth in three years.
The Shenzhen-based company reported that the bulk of its growth came from its VAS division, which includes gaming businesses. Revenues from this division rose 35 per cent to Rmb14.4bn.