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Tencent shares rise after first quarter profit beats

HONG KONG (Reuters) – Shares of Tencent Holdings Ltd (0700.HK) spread out 7 % in Hong Kong on Thursday after it reported better-than-expected first-quarter effects.

FILE PHOTO: An indication of Tencent is noticed all over the 3rd annual World Internet Conference in Wuzhen the city of Jiaxing, Zhejiang province, China November 16, 2016. REUTERS/Aly Song/File Photo

Tencent posted a 61 % soar in web profit on a 48 % rise in earnings for the first 3 months of the yr, beating consensus estimates.

But Credit Suisse reduced its goal value for the inventory to HK$523 from HK$540 after the effects, as did Jefferies to HK$515 from HK$530.

Jefferies analysts wrote in an accompanying notice that Tencent’s gross profit margin was once upper than anticipated with its “strong mobile game rebound”, however added a structural trade combine exchange would possibly proceed to weigh at the company’s margins.

Jefferies revised up its 2018 earnings goal by way of 1 % and reduced the non-GAAP income forecast by way of four % to replicate the next earnings contribution from advert and fiscal services and products, they wrote.

Daiwa Securities raised its goal value for Tencent to HK$530 from HK$490 on what it stated was once “a stellar set of results”.

Tencent shares have fluctuated this yr after surging to a file top in January to quickly overtake Facebook Inc (FB.O) as the arena’s fifth-most precious corporate, and swung again on a promote down by way of its greatest shareholder and control’s caution on margin softness.

Between its January top value of HK$476.6 and a low this yr of HK$380 on May eight, Tencent misplaced $117 billion in marketplace worth.

Its shares have been up three.three % to HK$409 as of 0200GMT, giving Tencent a marketplace capitalization of $496 billion.

($1 = 7.8496 Hong Kong bucks)

Reporting by way of Sijia Jiang and Twinnie Siu; Editing by way of James Pomfret and Sunil Nair

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