Tencent Doubles Profit But Warns Spending to Weigh on Margins
- Profit fueled by games as WeChat users top 1 billion
- While online ad sales surged, so did its cost of revenue
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Tencent Holdings Ltd. said investments in content and technology will weigh on margins after Asia’s most valuable company posted quarterly profit that topped projections.
Plans by the Shenzhen-based company to keep spending on areas including artificial intelligence and video may weigh on short-term profitability but it expects the investments will anchor long-term growth. Tencent reported net income almost doubled to 20.8 billion yuan ($3.3 billion) in the three months ended December, beating the 16.6 billion-yuan expected by analysts.