Tencent’s Q2 Profits Rise 23% YoY but Shrink 18% QoQ

Tencent (0700.HK) recorded a net income of RMB 2.35 billion in the second quarter of 2011, up 22.6% y-o-y but down 18.2% q-o-q, the company announced August 10.

Revenue for the quarter came to RMB 6.74 billion, up 44.3% y-o-y and 6.3% q-o-q. Internet value-added services (IVAS) accounted for RMB 5.39 billion, up 50.4% y-o-y and 2.6% q-o-q, of which online games revenue amounted to RMB 3.64 billion, up 69.9% y-o-y and 1.9% q-o-q. Mobile value-added services (MVAS) contributed RMB 793.8 million, up 17.8% y-o-y and 2.1% q-o-q, while the company's online advertising unit generated revenue of RMB 512.3 million, an increase of 28.9% y-o-y and 82.4% q-o-q.

In the second quarter, the number of active user accounts of the company's instant messenger product grew 4.1% q-o-q to 701.9 million, a slower pace of growth compared with last year, which the company attributed to reduced growth of overall internet take-up in China. The number of subscriptions for fee-based IVAS rose 5.8% q-o-q to 76.5 million, and the company recorded 9.6% more sign-ups for MVAS than at the end of the first quarter, with total mobile subscribers reaching 29.8 million.

The company's social networking service (SNS), Pengyou, recorded 129.3 million active user accounts by the end of June, 27.5% higher than the end of the first quarter, while the Tencent microblogging service recorded 59.4% sequential growth in registered user accounts to 233 million.