SHANGHAI (Reuters) -Chinese social media and gaming large Tencent Holdings posted on Wednesday an 8% rise in fourth-quarter income, its slowest growth since going public in 2004 that mirrored heightened regulatory scrutiny and a slowdown in promoting.
Tencent mentioned income rose to 144.2 billion yuan ($22.63 billion) within the quarter ended Dec. 31, beneath a mean of 147.6 billion yuan from 17 analysts, Refinitiv information confirmed.
Revenue for the total 12 months rose 16%, its slowest ever tempo as nicely.
A year-and-half-long crackdown by Beijing on tech giants such as Tencent has introduced a long time of unbridled growth to an finish and positioned them beneath new guidelines governing how they work together with their customers and the way they conduct mergers and acquisitions.
Regulators have frozen recreation approvals since August final 12 months, casting a chill over the sector and placing many small gaming studios out of enterprise.
Advertising has additionally been hit as many industries affected by the regulatory crackdown reduce on spending.
Tencent mentioned in an announcement it anticipated to profit from new recreation launches when new recreation monetisation licenses are launched, including that it additionally expects its promoting enterprise to renew growth in late 2022.
Last 12 months, Chinese regulators ordered Tencent to finish unique music copyright agreements and located its messaging and funds app WeChat illegally transferred consumer information. They additionally imposed new gaming limits for younger gamers.
During an inner assembly at Tencent on the finish of 2021, chief govt Pony Ma informed employees that the corporate ought to put together itself for a “winter”, in line with two different sources.
Tencent’s inventory has misplaced greater than a 3rd of its worth prior to now 12 months.
Tencent and its peer Alibaba Group Holding – whose inventory has greater than halved prior to now 12 months – are making ready to chop tens of 1000’s of jobs mixed in considered one of their largest layoff rounds as the web companies strive to deal with the brand new regulatory local weather, Reuters reported final week citing sources.
However, shares in Tencent and its friends have rallied in current days after Chinese Vice Premier Liu He mentioned final week that Beijing would roll out assist for the financial system and hold markets secure.
Tencent mentioned on Wednesday its adjusted revenue for the December quarter fell by a fourth to 24.9 billion yuan as prices rose.
It posted a 60% bounce in quarterly web revenue, helped by one-off good points made by offers such as its disposal of most of its stake in JD.com.
($1 = 6.3729 Chinese yuan renminbi)
(Reporting by Brenda Goh; Editing by Jason Neely and Muralikumar Anantharaman)
