Second-quarter profits at Tencent, whose products range from instant messaging and social networks to online games, exceeded expectations as it…

Second-quarter profits at Tencent, whose products range from instant messaging and social networks to online games, exceeded expectations as it continued to expand its mobile gaming business

The Shenzhen-based tech group, which recently led a consortium that bought an 84 per cent stake in Clash of Clans maker Supercell for $8.6bn, made a net profit of Rmb10.7bn ($1.6bn) in the three months to June 30

This exceeded forecasts of Rmb9.5bn and was a 47 per cent increase on the same period a year ago. Revenue rose 52 per cent year-on-year to Rmb35.7bn

Like rival Alibaba, which this month also posted better than expected second-quarter figures, Tencent has been increasing the proportion of revenues it generates from smartphones

During the second quarter it made Rmb9.6bn in revenue from smartphone games, a 114 per cent increase on the same period a year earlier

Overall, online game revenues increased 32 per cent year on year to Rmb17.1bn

The vast majority of gaming revenues — whether on smartphones or PCs — comes from in-game add-ons, where users can pay for virtual perks such as new weapons in combat games

Aside from the trend towards mobile gaming, a shift towards mobile advertising has helped push up profits, according to Elinor Leung, analyst at CLSA, a Hong Kong-based investment group

Using a model similar to Facebook, the company recently began to include ads in public areas of its popular WeChat messaging app, where they appear among posts from individual users and official public accounts

WeChat alone had 806m active monthly users in the second quarter, representing 34 per cent year-on-year growth