(Yicai Global) May 17 -- Shares of Tencent Holdings Ltd. jumped 3.74 percent today after China's largest social network and gaming company topped market expectations with a record first-quarter profit.

The stock [HKG:0700] closed at HKD411 (USD52.4) in Hong Kong, after earlier surging as much as 7.1 percent, its biggest intraday gain in over two years.

Yesterday, the Shenzhen-based company reported a 61 percent spike in net profit to CNY23.3 billion (USD3.7 billion) in the January to March period, from a year earlier, versus an estimate of CNY17.5 billion. Revenue increased 48 percent to CNY73.5 billion, outstripping a Thomson Reuters estimate of CNY71 billion. 

The gains were driven by new mobile game releases and improvements to the mini-programs' function of Tencent's flagship lifestyle app WeChat during the quarter. This helped strengthen user engagement with its platforms, said Chairman and Chief Executive Pony Ma. The firm has also made significant progress in its New Retail model aimed at expanding its offline presence, as well as its financial and cloud services, he added.

Online games revenue rose 26 percent to CNY28.8 billion after new game releases including MU Awakening, a massively multiplayer online roleplaying game, and racing title QQ Speed Mobile.

The firm's earlier release, mobile battle game Arena of Valor, was the highest-grossing iOS game in China in the period, according to online journal Games Industry Biz, while PlayerUnknown's Battlegrounds has also proved popular with 40 million global sales in March. Tencent will also work on the highly-anticipated Chinese localization of another battle royale game Fortnite.

Tencent's value-added services revenue was CNY46.9 billion, up 34 percent annually, and online advertising revenue grew 55 percent to CNY10.7 billion.

Editors: Emmi Laine, William Clegg