Shares in South African-headquartered media, communications and e-commerce giant Naspers leapt higher on Wednesday on the back of strong results from China’s Tencent, in which it holds an approximate one-third stake.
Naspers was trading up by more than 8,5% in mid-afternoon trading, at R1 170/share, after earlier having traded more than 9% higher.
First-quarter net income at Tencent, which owns the popular QQ and Weixin/WeChat instant messaging platforms, rose by 60%, far beyond most analysts’ expectations, thanks to strong growth in the sale of smartphone games. Net income was 6,46bn yuan (about R10,7bn), its largest-ever quarterly profit, and well ahead of the consensus analyst forecast of 4,93bn yuan.
According to Reuters, Shenzhen-based Tencent’s market capitalisation is now more than US$120bn (about R1,2 trillion), making it China’s largest listed technology company. The news wire says the results may help allay fears among some investors that Tencent’s profit margins might be coming under pressure.
As Tencent has expanded, Naspers’s share price in recent years has begun closely tracking the Chinese company’s fortunes.
Despite the spike in the Naspers share price on Wednesday, it is still trading some way off its all-time high, set on 11 March 2014, of R1 354,09. — (c) 2014 NewsCentral Media