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Asia300

Tencent hits record profit, sales as user base expands

Heavier traffic feeds growth in gaming and advertising revenues

HONG KONG -- Tencent Holdings' net profit surged 43% in 2016 thanks to steep user growth for the WeChat platform and a corresponding upswing in gaming revenue.

The Chinese internet services giant on Wednesday reported 41 billion yuan ($5.96 billion) in black ink for the year ended December. Revenue climbed 48% to 151.9 billion yuan.

WeChat, a free chat app for smartphones, added roughly 200 million users in 2016, bringing the end-of-year total to 889.3 million users. This growth led more users to paid games offered through the app, driving sales at Tencent's gaming business up 34% to around 107.8 billion yuan, or 71% of all revenue.

Tencent will continue to focus on the gaming field and actively invest in those operations, CEO Pony Ma Huateng told a news conference here.

Advertising sales increased 54% to around 26.9 billion yuan, making up 18% of the total. Ads placed on videos and a news site Tencent operates moved well. Sales at other businesses such as cloud services and WeChat-based payments came in 3.6 times the year-earlier level at 17.1 billion yuan.

Tencent shares closed down 1.57% here at 225.2 Hong Kong dollars, putting market capitalization at HK$2.13 trillion ($274 billion).

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