Shares in Naspers reached a new high yesterday, as they surged 5.73% on the back of Hong Kong-listed Tencent reporting gains in profitability.
Naspers stock rose to R699.10, adding R37.90 in value during the day, to a new 10-year high, while the broader market gained 0.75%. The stock hit an intra-day high of R702.45, before settling slightly at the close of the market.
The move follows Tencent's publication of its first quarter results, which showed gains almost across the board in revenue, profitability and margins.
The listed publishing and Internet giant owns a 34% stake in the Chinese company, through its MIH subsidiary. Tencent provides Internet and mobile and telecommunications value-added services in China.
Growing base
Tencent has three main streams of revenues: Internet value-added services, mobile and telecommunications value-added services, and online advertising. In the first quarter to March, total revenue gained 11.5% quarter-on-quarter, to $2.16 billion, while gross profit increased to $1.2 billion, a 10.4% quarter-on-quarter improvement.
However, Tencent's gross margin declined slightly, to 56.1% from 56.6% in the last quarter of 2012. Its operating profit moved up 35.6% from the December quarter, to $807.6 million, and net profit gained 17.3% quarter-on-quarter, to $649.4 million.
Monthly active user accounts of instant messaging were 825.4 million, an increase of 3.4% quarter-on-quarter, or 9.8% year-on-year. Peak simultaneous instant messaging accounts dropped slightly by 1.9% quarter-on-quarter, but gained over the year, to 173 million.
Ma Huateng, chairman and CEO of Tencent, said "during the first quarter of 2013, we saw broad-based growth in user engagement and revenue across our key activities".
The growth has enabled Tencent to fund investments in longer-term opportunities such as WeChat international user acquisition, online video content aggregation, and e-commerce footprint expansion.
"We will continue to invest proactively in innovation and technology, and to cultivate our open platform, in order to capture the mobile opportunities ahead and strengthen our position as the leading Internet platform company in China," says Huateng.
Internet, into which its Tencent stake falls, was Naspers' second-biggest contributor to revenue in the six months to September, and the group aims to continue expanding its e-commerce arm.
Share