Tencent profits up on mobile gaming success and moving into movies
Hong Kong — Tencent Holdings posted fourth-quarter profit that missed analysts’ estimates amid a surge in costs and rising competition in the mobile gaming market. Net income rose 47% to 10.5-billion yuan ($1.5bn) in the three months ended December, the Shenzhen-based company said on Wednesday. This compares with the 11-billion yuan average of analyst estimates compiled by Bloomberg. Naspers has a large stake in Tencent; its shares were about 2% weaker in afternoon trading on the JSE. Tencent is competing with companies, including NetEase, for users as more people shift toward mobile games, which generate lower margins and have shorter life-spans than desktop titles. As its home market gets saturated, the company needs to find new sources of growth by delivering more hits, especially with its WeChat messaging service having a tough time expanding overseas. "Mobile gaming revenue likely softened in the fourth quarter," Shi Jialong, a Hong Kong-based analyst at Nomura International, s...
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