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Summary: Tencent's 2Q12 top line growth was slightly better than expected as revenuefrom online advertising spiked. Online games, Community VAS, Online Ads and eCommerce contributed 52.9%, 21.1%, 8.4% and 8.1% of 2Q12 revenue respectively. Fee-based paying members were down 6.0% QoQ and up 2.8% YoY and the growth is slowing down as the growth of the general internet population slowed down. GPM was down to 59.0% and we expect FY12 GPM to be 58.5%.