Tencent Holdings Ltd. reported a 43 percent rise in 2016 net profit to 41.1 billion yuan (about 6 billion U.S. dollars), mainly due to solid revenue growth in cloud services and payment, the company said here on Wednesday.
Revenue for the year rose 48 percent to 151.9 billion yuan (22 billion U.S. dollars), according to the annual report released by the company.
The company said revenue growth from cloud services and payment drove a 263 percent surge in revenue to 17.2 billion yuan (2.5 billion U.S. dollars) for its business line outside value-added services and online advertising.
On the other hand, gross margins for cloud services and payment are expected to remain low in the near future, Tencent said, with the segment's cost of revenue standing at a high 84 percent.
"We view mobile payment as infrastructure investment and think it is very worthwhile," Chairman and Chief Executive Officer of Tencent Ma Huateng said at a press conference.
"And for cloud business, we are also in early stage investment, so the cost may remain high in the near term," he said.
In addition, flagship social media app WeChat had 889.3 million monthly active users at the end of 2016, up 27.6 percent from a year ago, Tencent said, adding it plans to add more services within its social platforms this year.
Tencent's share lost 1.6 percent to close at 225.2 HK dollars (about 29 U.S. dollars) Wednesday.
