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Tencent Holdings, China's largest instant messaging provider, said a change in its revenue sharing arrangements with China Mobile could result in a 4 million yuan (US$48,3675) per month in reduction of net profits.
Under an agreement with China Mobile, Tencent received a share in revenues for "161 Mobile Chat,'' a value-added service offered to China Mobile customers.
The company's shares plunged 8.1 percent on the news on Wednesday, closing at HK$5.10, as the business accounts for more than one 10th of the company's net profit.
In 2003, 161 Mobile Chat generated 10 percent of its net profits 322.2 million yuan and 16 percent of its 220.6 yuan net profits in the first half this year, Tencent said.
Tencent's third-quarter net profits fell 4.7 percent from the second quarter, due to increased R&D spending.
(Shenzhen Daily December 24, 2004)
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