"Mobile game growth was very strong, as the first quarter is usually a good season when users spend more time on their devices during the holidays", said Benjamin Wu, a Shanghai-based analyst with Pacific Epoch.
The operating profit surged 59 percent to CNY 30.692 billion while the net profit going 61 percent higher to CNY 23.290 billion.
However, Tencent expects its PC game business to benefit from the roll-out of the PC versions of popular battle royale titles Fortnite and PlayerUnknown's Battlegrounds. The mobile version of Fornite was an instant hit in the United States market after its March launch, becoming the highest-grossing iOS game there.
The drop was partly triggered by the company's warning in March that margins may be hurt by its plan to invest "aggressively" this year into areas including video content acquisition and payment subsidy.
Tencent had warned in March that heavy spending could crimp profit, sending shares sharply lower.
Tencent has been on a shopping spree, expanding into different sectors including e-commerce and automobiles. Asia's largest company by market capitalization, Tencent reported $14 billion debt at the end of March, compared with $16 billion of cash at the same time a year ago. Earlier Wednesday, Tencent shares were down 0.45% at HK$396.2.
Honour of Kings continues to be a core source of earnings.
Has Tencent lost its creative mojo? While WeChat has just passed the billion-user mark and is trailing the world's largest social network by more than a billion users, the company's financial results are almost on par with Facebook's. That's partly thanks to a one-time gain of nearly 7.6 billion yuan from its investments in arenas like video and news.
That game has gone viral with more than 40 million active users monthly across consoles and PCs. Tencent attributed the increase to growth in digital content services such as live broadcast, video streaming and in-game virtual item sales, and its Karaoke app WeSing. The following month it led an investment of 617 million yuan in Pear Video, an online short video platform, that counts the listed unit of People's Daily as a shareholder.
As our chart illustrates, there's no need for Tencent to shy away from comparisons with the world's largest social networking company.
The internet giant has also plunged into offline retail sectors.