* Tencent Q4 net income up 12.9 pct to 3.91 bln yuan
* WeChat Q4 revenues 200-300 mln yuan
* Tencent proposes five-for-one share split
(Adds WeChat revenues, share split, CTO departure)
By Paul Carsten and Yimou Lee
BEIJING/HONG KONG, March 19 Tencent
posted its slowest quarterly profit growth in almost two years
after heavy spending to promote its mobile messaging app WeChat
and e-commerce sites in competition with Alibaba Group
China's largest listed internet company also gave an
indication of WeChat revenue figures for the first time as it
transforms from a messaging service to fully fledged mobile
platform for everything from social networking and gaming to
personal finance and booking taxis.
WeChat's fourth-quarter revenue was between 200 million yuan
and 300 million yuan ($32-49 million), Tencent President Martin
Lau told reporters after Wednesday's earnings announcement.
WeChat and Mobile QQ, another app, together generated gaming
sales of more than 600 million yuan in the three months to Dec.
31, Tencent said, against the group's 16.97 billion yuan in
total revenue for the quarter.
"We (only) just started to monetise WeChat in the fourth
quarter, so revenues won't be too much," Lau said.
By comparison, Line Corp's Japanese mobile messaging app
Line last month announced 2013 revenues of 34.3 billion yen
($338.38 million), making it last year's top-earning non-gaming
WeChat is now worth about $64 billion, CLSA analyst Elinor
Leung said this month, arguing that the expected multiple uses
offer far greater earning potential than WhatsApp, which
Facebook bought for $19 billion last month.
Tencent, about a third owned by South African e-commerce and
media company Naspers, also plans a five-for-one share
split to make the shares more accessible to small investors.
The split will result in a downward adjustment to the share
price, the company said in a stock market filing, and will be
effective from May 15, pending approval by current shareholders
and the Hong Kong Exchange.
Tencent's share price has more than doubled in the past
year, against a 2.2 percent fall for the Hang Seng index,
giving it a market capitalisation of $138.7 billion.
The 12.9 percent rise in fourth-quarter net income was in
line with analysts' expectations but was its slowest growth
since the first quarter of 2012, hit by sales and marketing
expenses up 39 percent from the third quarter.
Tencent said it plans further investment as WeChat evolves
from a pure communications service into a multi-functional
platform, with Chief Executive Pony Ma pointing to opportunities
in payment services.
The company is going head to head against e-commerce giant
Alibaba in mobile-based retail services and both groups recently
announced plans to launch virtual credit cards using QR codes
that function in a similar way to bar codes scanned by
smartphones to process payments.
This foray into financial services has been attacked by
China's traditional banking sector and the central bank is
considering regulations to limit the use of third-party payment
systems offered by Tencent and Alibaba.
It also suspended the use of QR code payments, viewed by
analysts as potentially the most attractive feature of WeChat.
"Although Tencent and Alibaba might be enemies on the
surface they're going to be united in trying to convince the
banks that it should be an open market, and I think ultimately
they will win," said Michael Clendenin, managing director of
Shanghai-based RedTech Advisors.
"But it's not going to happen tomorrow, it could take
several months to work through this regulation," he added.
Tencent said global monthly active users of WeChat rose 5.7
percent in the fourth quarter to 355 million.
Net income was 3.91 billion yuan on revenues up 40 percent
at 16.97 billion yuan.
Tencent, the shares of which were down 1.82 percent at the
market close, also announced that Chief Technology Officer Zhang
Zhidong will step down on Thursday for personal reasons. It gave
no indication of when it expects to appoint a successor.
($1 = 6.1920 Chinese Yuan)
($1 = 101.3650 Japanese Yen)
(Editing by Miral Fahmy and David Goodman)