Tencent posts Q1 results that beat expectations

Chinese social media and gaming giant Tencent on Thursday reported first-quarter results that beat expectations, driven mainly by growth in units including the gaming business.

Tencent posted revenue of RMB 135.3 billion ($21 billion) in the first quarter, up 25 percent from a year earlier, beating analysts' estimates of RMB 133.75 billion.

The company reported a first-quarter net profit of RMB 47.8 billion, up 22 percent year-on-year and above market expectations of RMB 34.4 billion.

Tencent's value-added services revenue rose 16 percent to RMB 72.44 billion in the first quarter, slightly below market expectations of RMB 72.75 billion.

Of this, gaming revenue rose 17% to RMB 43.6 billion, which the company attributed to growth in global mobile gaming revenue.

Its mobile game revenue and personal computer client game revenue were RMB 41.5 billion and RMB 11.9 billion, respectively.

Tencent's online advertising revenue in the first quarter was RMB 21.82 billion, up 23% year-on-year and higher than market expectations of RMB 21.51 billion.

This was mainly driven by growing demand in categories such as e-commerce platforms, education, and fast-moving consumer goods.

Its social and other advertising revenue grew 27% to RMB 18.5 billion.

The number of WeChat monthly active accounts was 1.241 billion in the first quarter, up 3.3% year-on-year. The number of QQ mobile terminal monthly active accounts was 606 million, down 12.6% year-on-year.

Tencent had 226 million paid value-added service accounts in the first quarter, up 14% year-on-year. Its paid video service membership reached 125 million, up 12% year-on-year.

By the end of the first quarter this year, Tencent had 89,228 employees, with total compensation costs of RMB 20.401 billion for the period and an average monthly employee salary of RMB76,000.

In April, Tencent made its fourth strategic upgrade of its organizational structure, incorporating "sustainable social value innovation" into its core strategy.

In announcing the new strategic upgrade, Tencent said it would invest RMB 50 billion in the first phase to explore sustainable development in areas including basic science, education innovation, rural revitalization, and carbon neutrality through labs and internal entrepreneurship.

Tencent's shares traded in Hong Kong have gained 6.38 percent so far this year and were trading at HK$609 as of Thursday's close.