Tencent Shows Internet Boom In China Continues

Chinese online and mobile company Tencent Holdings Limited today announced its unaudited consolidated results for the year’s first quarter ended March 31, 2011.

Tencent, which uses the International Financial Reporting Standards and is listed in Hong Kong, says its total revenues were USD966.8 million, an increase of 14.7% over the fourth quarter of 2010 or an increase of 50.0% over the first quarter of 2010. Gross profit was USD632.2 million, an increase of 12.3% quarter-on-quarter or an increase of 43.0% year-on-year. Gross margin decreased to 65.4% from 66.8% last quarter.

Operating profit was USD516.5 million, an increase of 27.7% quarter-on-quarter or an increase of 57.6% year-on-year. Profit for the period was USD439.9 million, an increase of 30.3% quarter-on-quarter or an increase of 60.0% year-on-year. Net margin increased to 45.5% from 40.1% last quarter.

Revenues from the company’s Internet value-added services were USD800.9 million, an increase of 19.8% quarter-on-quarter or an increase of 55.0% year-on-year. Revenues from mobile and telecommunications value-added services were USD118.6 million, an increase of 6.8% quarter-on-quarter or an increase of 25.8% year-on-year.

However, revenues from online advertising were USD42.8 million, a decrease of 27.6% quarter-on-quarter or an increase of 37.5% year-on-year. The company says this primarily reflected weaker seasonality due to reduced activities of advertisers around the Chinese New Year holidays.