Tencent profit rises 32% on online ads, games

Tencent Holdings Ltd, China's biggest Internet company, has posted a 32 percent rise in second-quarter profits driven by increased game sales and rising Web advertising.

Net income climbed to 3.1 billion yuan ($487 million) from 2.35 billion yuan a year earlier, Tencent said in a statement to the Hong Kong Stock Exchange.

The profit figure compared with the 3.08 billion yuan average of nine analysts' estimates compiled by Bloomberg.

Tencent added social-networking users to its sites including Qzone and Pengyou, helping the company boost Web advertising sales even as economic growth in China slowed.

Chief Executive Officer Pony Ma said the company is increasing its spending on e-commerce operations to challenge local industry leader Alibaba Group Holding Ltd and cut back on its reliance on online game sales.

"A lot of Tencent's online advertising business comes from consumer goods, and that should be less impacted by the economy," said Jim Tang at Shenyin Wanguo Securities in Shanghai, who rated Tencent as outperform before the announcement.

China Daily - Agencies

Online Games market in China

Rating system needed for online games

Mobile gaming market reaches 1.2b yuan in Q2

Web companies hope Games will prove gold online

Tencent invests in US gaming company

Online gaming sector recovering

China's online gaming industry grows in 2011

Online gaming market reports 32% revenue increase