Tencent reported its consolidated results for the third quarter ended Sept. 30 on Nov. 14 that beat analysts' forecasts.
China's largest gaming and social media group reported a profit of 23.3 billion yuan, a 30 percent increase year-over-year. This beat an average estimate of 18.39 billion yuan of 12 analysts surveyed by Bloomberg. Tencent's revenue had also increased by 24 percent to 80.6 billion yuan.
Ma Huateng, chairman and CEO of Tencent, attributed the strong third-quarter results to the company's robust revenue growth in advertising, digital content, smartphone games, and payment and cloud services.
Tencent's fulfilling third quarter was particularly notable because it was achieved at a time when the Chinese government implemented tougher rules involving its online gaming industry. The move gravely impacted Tencent but Ma said the company took own initiative in imposing limitations on games played by minors.
Now, analysts wait if China will receive approval in China to monetize the PUBG Mobile. As soon as approval is given, the segment could bring in up to $1 billion a year, according to Reuters.
The gaming and social media group also upgraded its organizational structure at the end of September to address the market challenges that arise from tougher gaming regulations.
Revenue of Tencent's smartphone games unit increase by 7 percent year-on-year and 11 percent quarter-on-quarter to 19.5 billion yuan.
Ma said the fulfilling smartphone games revenue was attributable to 10 new titles released in the quarter. These titles included Free Fantasy Online Mobile, MT4, and Saint Seiya. The positive seasonality and new avatar personalization items, Honor of Kings, paying users increased sequentially all contributed to the revenue growth this quarter, Ma outlined.
The chairman also noted that Honor of Kings has consistently been the leading game in China. Tencent also has 15 games with monetization approval. In the international market, PUBG Mobile became the second most popular smartphone.
Meanwhile, advertising revenue accounted for a fifth of the company's total revenue, increasing by 47 percent to 16 billion yuan. This segment was driven primarily by a 61 percent increase in social and other advertising platforms.
Indeed, the affirming results were enough to push Tencent stocks to a 4.3 percent increase, opening at HK$284 on Thursday in Hong Kong trading.
The better-than-expected third quarter results also pushed some Tencent-related Hong Kong stocks on Thursday.
Hang Seng Index rose 0.4 percent by midday break according to Nikkei Asian Review. Tencent contributed to about four-fifths of its advance by points, the publication noted.
ANTA Sports Products also rose by 2.5 percent after a Bloomberg report saying Tencent is in talks to join a consortium planning a takeover of Finland's Amer Sports.
