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UPDATE 1-China's Tencent shrugs off impact of play-time limits; shares rise

* Tencent says play-time limits target small portion of user base

* Does not expect material impact on financial results

* Shares reverse early losses to rise more than 1 percent (Recasts with Tencent comment, updates shares)

HONG KONG, July 5 (Reuters) - Tencent Holdings Ltd has shrugged off concerns that a move to limit play time for some users of its top-grossing "Honour of Kings" game could hurt its bottom line, saying those targeted make up only a small portion of its overall user base.

The company said on Sunday "Honour of Kings" players below 12 years of age would be limited to one hour of play time each day, while those aged 12 to 18 years would be limited to two hours a day, responding to concerns from teachers and parents that some children were addicted to the game.

Shares of Tencent, China's biggest gaming and social media firm by revenue, fell nearly 4 percent up to the close of trade on Tuesday, wiping some $12 billion off its market value. The stock was up more than 1 percent on Wednesday, reversing earlier losses, and compared with a flat broader market.

China's communist party mouthpiece, the People's Daily, has also criticized Tencent twice this week, including one commentary that described the "Honour of Kings" game as poison and called for regulatory controls on social games, which further weighed on its shares.

"(Those) under 12 years old constitute a small proportion of our total user base and a smaller percentage of our paying user base. We do not expect these measures will have a material impact on our overall financial results," Tencent said in an email response to a Reuters request for comment.

Tencent also said it would step up the requirement of real-name registration for all users.

It was not immediately clear if Tencent can effectively impose the play-time restrictions or how easy it will be for players to skirt the measures.

Chinese gaming industry database CNG estimates "Honour of Kings" raked in revenue of more than 5.5 billion yuan ($810.47 million) in the first quarter, accounting for nearly half of Tencent's smartphone games revenue of 12.9 billion yuan in the period.

($1 = 7.8077 Hong Kong dollars) (Additional reporting by Donny Kwok, Writing by Anne Marie Roantree, Editing by Christopher Cushing)