Media and Internet firm Naspers added a whopping 8.53% in trade on the JSE on Wednesday (14 May), after Tencent Holdings reported a 60% rise in first-quarter net income.<\/p>\n
By 14h00, Naspers added R92 to its share price of\u00a0 R1,170, having dipped below R1,000 in intraday trade last week, from a high of R1,354 achieved on 11 March, 2014.<\/p>\n
It first breached the R1,000 mark in the beginning of December 2013, and shows a healthy one-year-return of 78% on the local bourse, along with a market cap exceeding R448 billion.<\/p>\n
Naspers\u2019 recent fortunes have been closely aligned to Tencent, the Chinese media and entertainment company in which it owns 34%.<\/p>\n
Reuters reported that Tencent’s first-quarter net income surged beyond estimates as revenue from smartphone games helped deliver the company’s best growth in three years.<\/p>\n
Worth over $120 billion by market value, Tencent is China’s largest listed tech firm and has become the biggest potential rival to Alibaba Group Holding, the Chinese e-commerce giant readying itself for a blockbuster US listing.<\/p>\n
Tencent said on Wednesday its net income soared to 6.46 billion yuan ($1.04 billion) in the three months ended March from 4.04 billion yuan a year earlier, its largest-ever quarterly profit.<\/p>\n
Analysts had forecast profit of 4.93 billion yuan.<\/p>\n
For now, Shenzhen-based Tencent makes most of its money from the division which includes its video gaming business and sales of digital goods.<\/p>\n
But Tencent has already spent more than $1.2 billion in areas like e-commerce, real estate and digital mapping since the beginning of 2014, as it looks to develop WeChat – Weixin in Chinese – as a gateway for all users’ needs on a smartphone.<\/p>\n
Investments include a tie up with JD.com, ranked a distant second behind Alibaba in China online retail and now heading for its own New York listing which could raise as much as $1.7 billion.<\/p>\n
Revenue growth was also the fastest in three years, leaping to 18.4 billion yuan in the quarter from 13.5 billion yuan a year earlier. Global monthly active users of WeChat grew 11.5% from the previous quarter to 396 million.<\/p>\n
The division that includes the lucrative gaming business saw a 35% jump in revenue, boosted by success in sales of games for smartphones distributed over hugely popular mobile messaging app WeChat.<\/p>\n
The earnings may also allay concern among some analysts that Tencent’s profit margins might be shrinking. The surge in net income helped deliver the best margins since the first quarter of 2011.<\/p>\n
Reporting with Reuters<\/em><\/p>\n Naspers dips back below R1,000<\/a><\/strong><\/p>\nMore on Naspers<\/h3>\n