Shares of Tencent Holdings Ltd opened up 7 percent in Hong Kong on Thursday after it reported better-than-expected first-quarter results.

Tencent posted a 61 percent jump in net profit on a 48 percent rise in revenue for the first three months of the year, beating consensus estimates.

But Credit Suisse lowered its target price for the stock to HK$523 from HK$540 after the results, as did Jefferies to HK$515 from HK$530.

Jefferies analysts wrote in an accompanying note that Tencent's gross profit margin was higher than expected with its "strong mobile game rebound", but added a structural business mix change might continue to weigh on the firm's margins.

Jefferies revised up its 2018 revenue target by 1 percent and lowered the non-GAAP earnings forecast by 4 percent to reflect a higher revenue contribution from ad and financial services, they wrote.

Daiwa Securities raised its target price for Tencent to HK$530 from HK$490 on what it said was "a stellar set of results".

Tencent shares have fluctuated this year after surging to a record high in January to temporarily overtake Facebook Inc as the world's fifth-most valuable company, and swung back on a sell down by its largest shareholder and management's warning on margin softness.

Between its January peak price of HK$476.6 and a low this year of HK$380 on May 8, Tencent lost $117 billion in market value.

Its shares were up 3.3 percent to HK$409 as of 0200GMT, giving Tencent a market capitalisation of $496 billion.

($1 = 7.8496 Hong Kong dollars) (Reporting by Sijia Jiang and Twinnie Siu; Editing by James Pomfret and Sunil Nair)

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