Forex

Chinese giant reports slowest revenue growth ever

Tencent’s twin-skyscrapers at Shenzhen Bay Begin Up Plaza in Nanshan enterprise district.

Nikada | Getty Photographs

Tencent on Wednesday reported its slowest quarterly income progress on file for the fourth quarter of 2021, because the Chinese language know-how large continues to really feel the influence of Beijing’s regulatory tightening on the home know-how sector.

Nonetheless, the corporate posted a surge in revenue within the fourth quarter.

This is how Tencent did within the fourth quarter, versus Refinitiv consensus estimates: 

  • Income: 144.18 billion Chinese language yuan ($22.62 billion) vs 147.6 billion yuan, up 8% year-on-year. That is the slowest income progress for the reason that firm went public in 2004.
  • Revenue attributable to fairness holders of the corporate: 94.96 billion yuan vs. 30.7 billion yuan anticipated. That is up 60% year-on-year. This was because of a big one-time acquire in relation to a disposal of belongings.

For the complete 2021, Tencent introduced in income of 560.12 billion yuan, up 16% versus 2020. Analysts had anticipated 566.3 billion yuan. That was the slowest yearly income progress charge on file.

Tencent, which has misplaced about $470 billion in market worth since its peak in early 2021, has confronted quite a lot of headwinds ensuing from China’s crackdown in areas starting from gaming to schooling.

“2021 was a difficult yr, by which we embraced adjustments and applied sure measures that strengthened the corporate’s long-term sustainability, however had the impact of slowing our income progress,” Tencent stated in a press release.

Worldwide video games progress

On-line video games is Tencent’s largest income driver however the section has confronted headwinds.

Final yr, regulators cut the amount of time youngsters beneath 18 years previous might play on-line video games for. In the meantime, authorities have not authorised the launch of any video games since July final yr. In China, video games want regulatory approval to be launched and monetized.

Tencent stated it expects “to completely digest the influence” of the foundations on beneath 18s within the second half of 2022.

The corporate additionally stated it would profit from extra new sport launches when the federal government approves the discharge of extra titles.

Home video games income grew by 1% to 29.6 billion yuan, pushed by Tencent’s present video games akin to Honor of Kings. That was slower than than the 5% progress seen within the third quarter.

Because the Chinese language home video games market faces challenges, Tencent has been rising deal with its abroad markets. Worldwide video games income within the December quarter got here in at 13.2 billion yuan, up 34% year-on-year. That was sooner than the expansion seen within the earlier quarter.

“We’ll proceed to launch new titles, which we count on to drive extra progress, significantly for 2023 and past,” Tencent stated.

Promoting beneath stress

Final yr, Beijing additionally cracked down on after-school education companies. That has weighed on Tencent’s advert enterprise as schooling companies would purchase advertisements with Tencent.

Advert income for the fourth quarter got here in at 21.5 billion yuan, a lower of 13% year-on-year.

Tencent stated this “mirrored weak point in advertiser classes together with schooling, video games and Web providers.”

Income from its fintech and companies providers division totaled 48 billion yuan within the December quarter, up 25% year-on-year, however lacking estimates of 49.26 billion. This division homes Tencent’s WeChat Pay enterprise and its fast-growing cloud computing unit.

Source link

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button