Chinese internet portal Tencent (
TCEHY
,
quote
) reported today that revenue was up 45% to $4.5 billion in 2011.
Net profit increased 26% to 1.6 billion, with basic earnings
beating estimates
at 5.609 RMB ($0.88) per share.
Tencent offers China's largest instant message service (QQ)
and social networking platform (Qzone), Twitter-like
micro-blogging service Tencent Weibo and a strong slate of online
gaming, including licenses like EA's
Sims Social
.
The company owns
Riot Games
, publisher of the popular
League of Legends
strategy game.
Most of Tencent's income came from "Internet value-added
services," which includes games, credited with $3.6 billion in
revenue. $519 million came from mobile and telecommunications
services, while $316 million came from online advertising.
Gross margin decreased slightly to 65.2% from 67.8%, and net
margin decreased to 35.9% from 41.3%.
Tencent Chairman and CEO Ma Huateng said that 2011 was a
"competitive and dynamic" year, crediting the company's open
platform strategy for creating a healthy and secure online
ecosystem. "In the face of changing technologies and volatile
capital markets," he said, "Tencent enhanced its core user
experience and achieved growth in revenue and earnings, while
delivering innovations that kept us at the forefront of industry
evolution."
In 2012, the company will focus on expanding its third-party
offerings, strengthening its security software, expanding its
online advertising business and increasing its market share with
online games.
Tencent Holdings trades primarily in Hong Kong, although there
is a U.S. presence on the pink sheets.
However, both the Global X Social Media Index ETF (
SOCL
,
quote
) and the Claymore China Technology ETF (
QQQC
,
quote
) offer concentrated exposure to the company, with
11.66% and 10.69% weighting
, respectively.