TENCENT Holdings Ltd, the largest instant message service provider in China, increased its first-quarter net profit by 16 percent on larger sales of items like icons and digital pets.

The Shenzhen-based company reported a net profit of 290 million yuan (US$37.5 million) on sales of 773 million yuan, which rose 20 percent over the same time last year.

Shares of Tencent yesterday rose 1.66 percent to close at HK$30.70 (US$4) at the Hong Kong stock exchange.

"In the quarter, we benefited from strong seasonality in both user numbers and consumption of our Internet value-added services (IVAS) due to Chinese New Year holidays and the winter break," said Ma Huateng, chairman and chief executive officer of Tencent, in a statement.

Tencent's business ranges from instant messenger QQ, portal QQ.com, an online auction service and a search engine. It relies heavily on sales of IVAS products like image icons among its virtual communities based on QQ instant messaging. In the quarter, nearly 65 percent of sales came from IVAS revenues, which rose 15 percent.

It's estimated that more than two-thirds of China's 140 million Internet users access Tencent services. The company is trying to upgrade its brand, generally associated in China with youngsters and linked with entertainment. The purpose is to compete with Baidu.com and Sina.com in attracting more advertising in its games and on its portals.

Source:佚名