Tencent Posts Slowest Profit Growth in Two Years

Chinese gaming and social media big Tencent posted its slowest quarterly revenue progress in two years on Wednesday, harm by a gaming crackdown, and stated the outlook for the promoting sector would stay weak into subsequent yr.

Net revenue for the three months by September rose 3 % to CNY 39.5 billion (roughly Rs. 45,962 crore), the corporate stated in a press release. This beat analyst expectations who had been predicting a decline, in response to Refinitiv knowledge.

Revenue climbed 13 % to CNY 142.4 billion (roughly Rs. 1,65,715 crore), barely under expectations, and was the slowest quarterly progress because the firm went public in 2004, Refinitiv knowledge confirmed.

China’s largest firm by market worth was hit by new limits on the period of time minors can spend enjoying video video games. The authorities has not authorised any new video games since August.

Beijing’s year-long crackdown on its once-freewheeling web {industry} has punished well-known firms for partaking in what had been beforehand thought-about common market practices, wiping billions of {dollars} off their market values.

“During the third quarter, the internet industry, including the domestic games industry, and certain advertiser categories, adapted to new regulatory and macroeconomic developments,” Tencent’s chairman and CEO, Pony Ma, stated in a press release.

“We are proactively embracing the new regulatory environment which we believe should contribute to a more sustainable development path for the industry,” he stated.

Sales from cell video games rose 9 %, the proprietor of video games reminiscent of Honor of Kings and PUBG cell stated in a press release.

Tencent stated minors accounted for 0.7 % of home video games time in September this yr, down from 6.4 % in September 2020, after the federal government’s new limits got here into drive initially of that month.

The regulatory crackdown has additionally hit tutoring centres and the medical magnificence {industry} and curbed urge for food from such industries for promoting.

Tencent stated its promoting income progress charge slowed within the interval, citing such regulatory elements in addition to macro challenges. It anticipated promoting pricing industry-wide to stay delicate for a number of quarters however stated the {industry} ought to regulate subsequent yr, it stated.

Tencent has shed practically 18 % of its market worth this yr versus a 9 % decline within the broader market.

© Thomson Reuters 2021