Chinese internet giant Tencent will step up investments in areas such as video, payment and artificial intelligence, it said after reporting better than expected quarterly net profit thanks to a string of successful IPOs.
“The year of 2017 was really a stellar year for Tencent. Many of the achievements are the result of investment we made years ago,” the company’s president, Martin Lau, said at a media briefing in Hong Kong.
“This demonstrates the importance of forward-looking investment. Therefore, for the year 2018, we are planning to step up our investment in a number of key areas.”
The areas earmarked for further investment include video, Weixin Pay, cloud services, artificial intelligence and smart retail, he said. Lau added that the company would “aggresively” acquire video content and subsidise payment adoption, which could hurt margins in the short run.
Net profit for the three months ended December 31 rose 98 percent to 20.8 billion yuan ($3.29 billion), China’s largest social media and gaming company said in a filing to the Hong Kong Stock Exchange.
A 51 percent jump in revenue was weaker than expected after mobile gaming revenue growth slowed from the previous quarter, but the company said overall revenue was supported by payment-related services, advertising and digital content subscriptions and sales.
Tencent’s messenger-to-payment app WeChat now has more than 1 billion users and has launched in-app services that could erode Apple and Googles app revenue.
There are now 580,000 of these mini-programmes, it said, with more than 170 million daily active users as of January.