Quick Take: Tencent Fourth-Quarter Profit Up 47% on Growth in Ads, New Businesses

Internet giant Tencent Holdings Ltd. on Wednesday said its profit and revenue both rose by more than 40% in the fourth quarter, as slowing growth at its core online game division was offset by strong gains in its newer services like cloud computing and online payments.

Tencent’s fourth-quarter profit rose 47% to 10.5 billion yuan ($1.52 billion), while its revenue was up 44% to 43.9 billion yuan, the company said in a statement to the Hong Kong Stock Exchange. For the full year, the company’s profit was up 43% to 41.1 billion yuan, while revenue rose 48% to 151.9 billion yuan.

Tencent said its popular WeChat mobile messaging platform continued to grow in the quarter, ending last year with 889 million users, up 5% from the previous quarter. But its older, QQ service posted its second straight quarter of net declines in total user numbers, ending the year with 869 monthly active users, reflecting the slowdown it is facing as it matures.

Tencent said that online games, its single largest revenue source, grew by a modest 16% to 18.5 billion yuan in the fourth quarter. But that slowing growth was offset by the 45% growth in its advertising business, and even stronger gains for its new businesses like cloud services. Tencent also said it saw strong growth for its mobile-payments business, surpassing 600 million mobile-payment monthly average users and average daily payment transactions in December.

Contact reporter Yang Ge (geyang@caixin.com)