Tencent reported second-quarter revenues of CNY 23.43 billion (USD 3.83 billion), up 19 percent on the year-earlier period. Operating profit rose 28 percent to CNY 10.04 billion, and the margin improved to 43 percent from 40 a year ago. Net profit reach CNY 7.31 billion, up 25 percent, and on an adjusted basis, rose 32 percent to CNY 7.98 billion. The company increased capital expenditure by 210 percent compared to a year earlier, to CNY 2.84 billion, while free cash flow was down 14 percent over the same period to CNY 5.42 billion.
Growth was led by online advertising, up 97 percent to CNY 4.07 billion. The Chinese company also grew revenue from online games, albeit at a slower rate of 17 percent to CNY 12.97 billion, and its social networks, by 17 percent to CNY 5.46 billion. Active monthly users on its Weixin/WeChat messaging platform were up 37 percent year-on-year to 600 million at the end of June, helped by expansion in the rest of Asia.
Looking forward, Tencent said it will continue invest in premium content, including new games, in order to drive the growth in ad revenues. It's also focused on improving content and building partnerships for its subscription services such as e-reading, video and music, and driving volumes over its integrated payments services.
