Tencent shares slip as earnings miss forecasts

Shares in Chinese internet giant Tencent fell Thursday as a more than 40 percent jump in net profit fuelled by a surge in game revenues missed expectations and annual gaming sales slowed.

Tencent became the country's most valuable enterprise in September, overtaking state-owned behemoth China Mobile, three months after buying the creator of popular games "Clash of Clans" and "Clash Royale" for $8.6 billion.

Based in the Chinese southern export hub of Shenzhen, the firm operates China's biggest messaging service WeChat through which a variety of businesses including gaming, advertising and social networking have flourished in recent years.

In a filing late Wednesday, it announced net profit for July-September rose 43 percent on-year to 10.65 billion yuan ($1.56 billion) thanks to an 87 percent jump in revenue to 9.9 billion yuan from smartphone games.

It also said its popular "Honor of Kings" game had surpassed 40 million daily active users.

Total revenue came in at 40.39 billion yuan, up 52 percent.

However, the figures came in below forecasts, while it also said mobile game sales rose just three percent from the previous quarter. 

The firm's share price tumbled 1.22 percent to HK$194.50 in Hong Kong morning trade. 

"Some of the sectors which were expecting higher growth did not come out as strong as we were expecting," financial analyst Jackson Wong told AFP.

"I did expect the mobile gaming sector to rise over 90 percent," Wong, the associate director of Hong Kong-based Simsen Financial group, said.

- Bloomberg News contributed to this story -

Source: AFP