Tencent shares rise after Q1 profit beats

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The two segments contributed more than half of the company's total revenue of 73.5 billion yuan. Fortnite has been developed by video game developer Epic Games who Tencent has a stake in - the game is now unavailable in China, but there are plans to launch the game in the region in the coming months. Profit was up 61% over the same period one year ago. Revenue from Value Added Services, which includes online games and messaging, rose 34 percent to 46.9 billion yuan.

Before the release of the first-quarter report, there had been concerns in the market about a potential slowdown in Tencent's online game income growth.

Strong mobile gaming revenue and 7.585 billion yuan in investment gains helped buoy its gross profit margin to 50.4 percent, the first sequential quarterly increase since the second quarter of 2015. The mobile version of Fornite was an instant hit in the U.S. market after its March launch, becoming the highest-grossing iOS game there.

Despite criticism that Tencent has lost its innovation ability and has become more like an investor, the company has proved that its investing activities actually go hand in hand with the development of its core business.

Tencent's shares have fluctuated sharply this year. The combined MAU of Weixin and WeChat amounted to 1.040 billion, up 10.9 percent year-on-year and from 989 million sequentially.

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Over the past year Tencent has completed 62 deals involving direct investments and mergers and acquisitions, according to data compiled by Bloomberg.

That game has gone viral with more than 40 million active users monthly across consoles and PCs. "The increase primarily reflected growth in revenues from digital content services such as live broadcast, video streaming subscriptions and our music service namely WeSing, as well as from in-game virtual item sales", Tencent said.

China's largest social network and gaming company defied fears that outsized spending would hammer profitability.

The internet giant has also plunged into offline retail sectors.

Yet, Tencent managed to come up with another hit title "Fortnite", following the tremendous success of games like "Honour of Kings".

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