While anxious investors had sold off more than US$90 billion of stock since January, Tencent posted a 61 percent jump in net income to 23.3 billion yuan (US$3.7 billion) in the March quarter, outstripping estimates by nearly a third.
From an investing standpoint, Tencent has outperformed its American counterpart in the past 12 months: the company's stock price climbed 60 percent since May 2017, Facebook's is up by "just" 23 percent.
Tencent continues to draw the lion's share of its business from gaming, while counting on advertising and finance via WeChat to drive future growth. All businesses contributed to growth, with revenues going up 340 percent at Value Added Services, and rising 26 percent at online games. Last month, Tencent partnered with U.S. developer Epic Games to launch Fortnite in China.
Jefferies revised up its 2018 revenue target by 1 per cent and lowered the non-GAAP earnings forecast by 4 per cent to reflect a higher revenue contribution from ad and financial services, they wrote. Smartphone games revenues alone were up 68 percent year-on-year to 21.7 billion yuan, thanks to titles such as "Honour of Kings".
Tencent has been on a shopping spree, expanding into different sectors including e-commerce and automobiles. Now not available in China, it is scheduled to be launched there during the next couple of months.
Has Tencent lost its creative mojo?
WeChat is extremely popular in China, largely because it combines messaging, social media, mobile payment and other functions in one single app.
China's largest social network and gaming company defied fears that outsized spending would hammer margins.
Over the past year Tencent has completed 62 deals involving direct investments and mergers and acquisitions, according to data compiled by Bloomberg.
Smartphone game revenue soared while PC gaming revenue was flat as PC gaming users fell.
In the video content sector, Tencent poured a total of $1.1 billion into two rivals in a 24-hour period, investing US$632 million and US$461.6 million respectively in Chinese game-streaming platforms Douyu and Huya in March. Epic is a company in which Tencent has a large stake.
The internet giant has also plunged into offline retail sectors.
Tencent reported a 111 percent rise in "other" revenue in the quarter to 15.96 billion yuan on growth in payment solutions and cloud services.