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Tencent Q4 Revenue Surges, Fueled By Gaming And Messaging

Strong growth in revenue from online games and social network services in China helped Tencent Holdings ( TCEHY ) deliver stronger than expected revenue when it reported fourth quarter earnings Thursday morning. Tencent reported revenue of $4.7 billion, beating the consensus estimate of $4.3 billion and up 45% year over year in local currency. Profit fell short as Tencent continues to aggressively invest in video and mobile. Tencent reported earnings per share minus items of RMB0.76, up 21% from a year ago. Equal to 12 cents at the current exchange rate, EPS missed the consensus estimate by a penny. Tencent is among China’s Internet leaders along with e-commerce king Alibaba ( BABA ) and search leader Baidu ( BIDU ). Other China Internet leaders include  e-commerce company JD.com ( JD ) and gaming company NetEase ( NTES ). Tencent shares traded over the counter in the U.S., were up 2.5%, near 20, in morning trading in the stock market today . Its primary stock listing is in Hong Kong, where it is a component of the blue-chip Hang Seng index. Revenue from online games, its largest revenue source, rose 33% to $2.46 billion, primarily driven by growth from smartphone games. The result was helped by an expanded game portfolio as well as higher revenue from PC games, thanks to popular titles and new games launched in 2015. Revenue from its social network and messaging services rose 37% to $1.1 billion. The increase was mainly driven by growth in subscription revenue as well as higher revenue from virtual item sales.

Tencent Expected To Maintain Hot Growth In China Internet Field

Tencent Holdings ( TCEHY ), China’s leader in messaging and gaming, is set to report Q4 earnings Thursday before the market open, with double-digit growth in both EPS and revenue expected by Wall Street. Tencent is among the China’s Internet leaders along with e-commerce king Alibaba ( BABA ) and search leader Baidu ( BIDU ). Other China Internet leaders include  e-commerce company JD.com ( JD ) and gaming company NetEase ( NTES ). The consensus estimate is for Tencent to report revenue of $4.26 billion, or 27.76 billion yuan, up 32% in local currency. Earnings per share minus items are expected to rise 32% as well in local currency, to 13 cents, or 0.83 yuan, as polled by Thomson Reuters. Tencent is China’s leader in online gaming, followed closely by NetEase. On Feb. 24 NetEase reported Q4 earnings that beat estimates. Tencent is also the leader in mobile chat services with its popular WeChat program. On Nov. 10, Tencent reported its strongest revenue growth in five quarters with its  Q3 earnings  report, though profit fell short of expectations, due mainly to aggressive investments in mobile. Tencent is traded over the counter in the U.S., with its primary stock listing in Hong Kong, where it is a component of the blue-chip Hang Seng index. On the OTC, Tencent was near 19.50, down a fraction, in afternoon trading in the stock market today . China e-commerce company JD.com reported Q4 earnings on March 1 that showed strong revenue growth and a lower-than-expected loss, defying concerns of economic weakness in that country. JD offers a wide range of electronics, apparel, home appliances, food and beverages and other general merchandise and competes in China’s burgeoning e-commerce arena against Alibaba. A year ago, JD formed a strategic partnership with Tencent.

JD.com Is Next China Internet Giant Set To Report Q4 Earnings

JD.com ( JD ) is due to report its fourth-quarter earnings before the market open on Tuesday, with the focus expected to be on its expansion into new business areas. JD is China’s largest online direct-sales company, offering a wide range of electronics, home appliances and general merchandise products. Its expansion efforts include online-to-offline retailing and flash sales to help it compete in China’s burgeoning e-commerce arena against  Alibaba ( BABA ), Vipshop Holdings ( VIPS ) and others. Analysts polled by Thomson Reuters expect sales to rise 49% in local currency to 51.9 billion yuan, or about $7.9 billion at the current exchange rate. They see the company reporting a per-share loss of 0.12 yuan, or about two U.S. cents vs. a penny profit in the year-earlier period. U.S.-listed JD stock was up 1.5%, near 26, in early afternoon trading in the stock market today . JD is down 21% this year. JPMorgan initiated coverage on JD last week with an overweight rating and price target of 33 a share. JD’s earnings will follow those of Vipshop Holdings, released Thursday. Vipshop reported Q4 earnings that beat estimates, but shares dropped as first-quarter guidance fell short. Vipshop is an online discount retailer that sells branded apparel, accessories, home goods and other lifestyle products. It specializes in so-called flash sales, in which a set number of goods are sold over a limited time. One year ago, JD.com formed a strategic partnership with Tencent Holdings ( TCEHY ), a leading Internet company in China, aimed at providing superior e-commerce services to mobile and Internet users in China. Tencent, China’s leader in messaging and gaming, is set to report earnings before the market opens March 17. It’s traded over the counter in the U.S., with its primary stock listing in Hong Kong, where it is a component of the blue-chip Hang Seng index. Chinese gaming and Internet company NetEase ( NTES ) released  Q4 earnings late Wednesday that beat estimates. NetEase said that revenue from online games, its biggest segment, more than doubled, while mobile original games also drove growth. It did not provide Q1 guidance. Alibaba on Jan. 28 reported earnings for its fiscal Q3 , ended Dec. 31, that topped Wall Street expectations. NetEase stock was trading near 136 Monday, up a fraction. Alibaba stock was trading near 70, up 4.5%. According to media reports, Alibaba Chairman Jack Ma and Vice Chairman Joseph Tsai are planning to buy back shares  worth $500 million.