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Mar. 22 (NBD) -- China's technology giant Tencent Holdings (0700.HK) released Wednesday the fourth quarter earnings and annual results for last year, posting the unprecedented quarter profit plunge.

2018 marked the 20th anniversary of Tencent's founding. The company maintained leadership in the social networking field. Weixin and QQ, as its two major social communications platforms, achieved a combined MAU (monthly active users) of approximately 1,098 million by the end of the year, up 11 percent from 2017.

But the year also witnessed Tencent's overshadowed financial performance.

The company raped revenue of 84.9 billion yuan (12.7 billion U.S. dollars) in the three months ended December 31, while the profit attributable to equity holders of Tencent decreased by 32 percent year over year to reach 14.2 billion yuan (2.1 billion U.S. dollars).

Last year, its revenue hit 312.7 billion yuan (46.7 billion U.S. dollars), representing a year on year rise of 32 percent, and the profit attributable to equity holders of the company registered 78.7 billion yuan (11.8 billion U.S. dollars), increasing 10 percent compared to the previous year.

Tencent president Martin Lau explained at the earnings press conference on Thursday that the company has diverse income sources. Although game revenue has declined, the earnings from advertising, payment, cloud and other businesses are growing rapidly.

China's gaming industry went through a chilly winter in 2018. Affected by the nine month-long game approval suspension starting from March last year, gaming firms suffered slackening game revenue growth during the year.

In November 2017, Tencent was named as exclusive China agent for popular South Korean game PlayerUnknown's Battlegrounds (PUBG). The Chinese firm soon launched two mobile PUBG games in December of 2017 and last February, respectively.

However, while the new releases grabbed a number of users from other Tencent games, the lack of game monetisation license prohibited the publisher from making profits through them.

Last year, smartphone and PC client game businesses contributed about 41.1 percent of Tencent's total earnings.

Nine licensed games were introduced to players in the fourth quarter, most of which are role playing ones, Tencent's announcement reported.

In addition to the domestic market, the Shenzhen-based giant is also groping for overseas expansion.

Tencent now has been the major shareholder of several game firms including Supercell which produced Brawl Stars and Fortnite's developer Epic Games.

On September 30 of last year, the tech behemoth initiated the third round of organizational structure adjustments, in which a new Cloud and Smart Industry Group will be established to spur the industrial Internet advancement.

It is noted that the cloud business could be a new driver for Tencent's growth.

The cloud revenues increased by over 100 percent to 9.1 billion yuan (1.4 billion U.S. dollars) for the year 2018 and paying customers more than doubled in the fourth quarter from the same period of 2017.

Tencent Cloud's global infrastructure covered 25 regions and operated 53 availability zones by the end of last year.

Pony Ma, CEO of the firm, is bullish on the cloud market, pointing out that the application of industrial Internet is relatively mature in the fields of finance, retail, transportation, medical care, government affairs and industrial application, which will generate demands for cloud services.


Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao