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Tencent profits at $4bn for 2014, up 53% year-on-year

Margins and revenues rise in both annual and quarterly reports

Tencent has booked its fourth quarter and full year results for the period ending December 31, 2014 - recording another huge jump in profits, revenues and margins.

For 2014 entire, the Chinese company recorded a phenomenal $12.9 billion in revenues, with a 30 per cent margin resulting in net profits of $3.9 billion. That's a 31 per cent revenue increase, year-on-year, and a 53 per cent jump in profit. For the final quarter, revenues were $3.4 billion, a rise of 24 per cent; whilst profit was $973 million - 51 per cent up on the same quarter in 2013.

"During 2014, we made significant progress in a number of strategic initiatives that reinforced our leadership and enhanced our competitiveness," said CEO Ma Huateng. "Our social platforms QQ and Weixin continued to innovate and grow. By leveraging our expertise in mobile Internet, we extended our leadership in games and online media, and made breakthroughs in emerging platforms such as online security, Android appstore, and mobile payments.

"We implemented our 'Connection' strategy, in which we organically link our large user base with appropriate content and services, and we built strategic relationships with numerous best-of-breed vertical partners, through investment and business cooperation. We believe this strategy will enable us to create superior experiences for our users, and to participate in the growth of vertical opportunities, as the mobile Internet increasingly penetrates consumers' daily lives."

Within the company, online game revenues leapt 41 per cent, with Tencent attributing that growth largely to increased income from mobile games, thanks to an ongoing integration process with Mobile QQ and Weixin. PC games also grew, although details were not provided. Social network income was up 51 per cent, thanks to higher sales of in-game items. However, online advertising saw the fastest growth, jumping by 75 per cent thanks to the Qzone and Weixin deals, but remaining a smaller business than direct mobile gaming or social networks.

"Leveraging our core communications and social platforms, Weixin, and Mobile QQ, we made significant progress in fostering a healthy mobile ecosystem which provides our users with an expanding range of products and services, taking advantage of our strengths such as unified login, users' social graphs, multi-platform marketing capabilities, infrastructure support, payment solutions and insights into user needs.

"During the year, we moved forward in monetising mobile Internet use, initially through smart phone games and performance-based social advertising. We invested heavily in content for businesses such as our literature service, music serive, and video service, contributing to substantial traffic growth. Our portfolio of mobile utilities, including mobile security, browser and application store, achieved healthy market share gains. For example, YingYongBao became one of China's leading Android application stores. We significantly expanded the user bases of our mobile payment platforms and we explored Internet finance opportunities with the launch of our wealth management platform and the inception of our bank affiliate, WeBank."

What's definitely worth noting is that Tencent's growth has occurred almost entirely within domestic borders. Whilst many of the company's services, such as WeChat, are available elsewhere, Tencent's phenomenal figures are largely a result of the spread of smartphones amongst the Chinese population and the country's increasing adoption of e-commerce. For example, whilst the MAU of Qzone only rose by 4 per cent to a still astronomical 654 million, the MAU on smartphones was up by 30 per cent to 540 million. With many estimates now putting China's mobile market ahead of the US in terms of revenue as well as users, but with far more room to grow, Tencent's tremendous growth looks set to continue.

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