Tencent Holdings Ltd. ahieved a new record high after the company reported an increase in their sales, with their growth surpassing the optimistic estimates made by analysts.
The shares of the company went up by 2.3% to an all-time high of HK$391.80 in Hong Kong, thus taking the market value of the company to $477 billion. The Chinese giants are the owners of WeChat, the primary social media platform in China. WeChat recorded a 61% rise in their third-quarter sales earlier on Wednesday. This increase was as a result of advertisement and hit game Honour of Kings with their growth now the fastest the company has recorded in 7 years.
By inputting WeChat into over 1 billion smartphones in China, the parent company Tencent has taken advantage of instant messaging services to include entertainment and gaming platforms that have aided in their increase advertisement sales. The company hasn’t made much progress overseas, it recently acquired a 12% stake in social media company Snap Inc. which is the parent company of popular Snapchat. The company is also looking to expand in areas such as cloud, financial services, movies and music sectors.
While commenting on the latest development, analyst Naoshi Nema stated that “We don’t see any signs of slow down or deterioration for next quarter or 2018. Mobile games growth is strong and the company is hitting pay dirt in areas of payments, cloud, and on-demand video subscription.”
Sales for the last quarter were reported to be around 65.2 billion Yuan ($9.8 billion. This was very high when compared to the expectation by most analysts who estimated figures around 61 billion Yuan. The total net income of the company was up by 69%, standing at 18 billion Yuan and exceeding the 15.8 billion Yuan estimated by analysts.
During the third quarter, WeChat had 980 million monthly active users. This is a 16% increase from the same period last year, with their daily messages now reaching 38 billion. The mobile version of their other social network QQ, saw their users drop by 2.5% by the end of the third quarter.
The main catalyst for their third-quarter growth is been attributed to the inclusion of Honour of Kings as it helped expand their gaming revenue by 84% during the third quarter.